SACRAMENTO — The announcement by state officials that California has enough cash to stop paying bills with IOUs did little to take the sting out of other budget news Thursday: Tens of thousands of poor children are about to lose their healthcare coverage.
A state board voted Thursday to begin terminating health insurance for more than 60,000 children Oct. 1 as a result of the budget amendments signed into law recently by Gov. Arnold Schwarzenegger.
Those children would be up for an annual review of their coverage next month, but instead they may be dropped from the California Healthy Families program under the action by the state Managed Risk Medical Insurance Board.
The board is scrambling to secure funding from other sources, including money set aside by voters for early childhood education, but so far it has come up short.
If additional funds are not found, board officials said, the program could ultimately drop 669,296 children in the current fiscal year, which ends June 30, 2010. Currently, 921,000 people age 18 and younger are enrolled in Healthy Families.
"There are not sufficient funds for the services we are providing," said board chairman Cliff Allenby. "We will work to do what we can do" to find additional money.
The budget cuts made by Schwarzenegger and the Legislature left the Healthy Families program with a $194-million shortfall.
On Thursday, the First 5 California Commission, which administers tobacco-tax funds that voters directed toward early childhood education, agreed to provide $81.4 million for Healthy Families. That is enough to cover 200,000 children through next June, but not enough to stop the vote to begin removing youngsters from the program.
Several advocates for children urged the board to put off a decision and find other ways to compensate for the budget shortfall.
"Families are extremely confused and frightened about what is going to happen to their kids," said Suzie Shupe, executive director of California Children's Health Initiatives.
Clifford Sarkin, a senior policy associate with the Children's Defense Fund California, called the board's vote "devastating. . . . During these economic times, these families rely on the Healthy Families program more than ever."
Meanwhile, a coalition of advocates for the disabled announced Thursday that it has filed a lawsuit against Schwarzenegger to force the restoration of millions of dollars he cut with line-item vetoes from programs that help the sick and disabled. A similar suit was filed this week by state Senate Leader Darrell Steinberg (D-Sacramento).
