Health Insurance Blog

California’s state sponsored health insurance program for working poor and uninsured children received a last minute contribution from First 5 California.  The $16.8 Million contribution will allow Healthy Families California to continue accepting new members through June of ‘09.  Without this last minute lifeline, an estimated 162,000 California children would have went without health insurance for at least the next six months.

The Managed Risk Medical Insurance Board, which runs the Healthy Families program, had scheduled a meeting for today December 17th  to limit new enrollments into the health care program, which currently provides California health insurance for 900,000 children who would otherwise be uninsured.

First 5 California is an organization that is tasked with improving the healthcare of young children in California.

In an attempt to close the $11 Billion budget cap this year, the state of California is considering putting a freeze on Healthy Families, California’s state sponsored health insurance plan for children.

Nearly a million California children are enrolled in Healthy Families that would not have health insurance coverage otherwise.

The Healthy Families Program is $17 Million over budget, as enrollment is growing by 27,000 new children each month, largely due to the tough economic climate and growing unemployment.

Freezing enrollment in the program is clearly not a desired action to address the budget shortfall, and although President Elect Obama is making children’s healthcare a priority, a decision will need to be made regarding this programs solvency before he takes office in January.

Some California health insurance companies, inlcuding Kaiser Permanente, Health Net, and Blue Shield of California, have warned brokers across the state that if they combine health insurance plans offered by their companies with other forms of insurance or “wraparound” plans to cover the gaps in coverage, they may be refused earned commissions or even lose their appointment with the health insurer.

One example of one of these wraparound plans is Ben-e-lect, a flexible benefits program that sells wraparound plans to businesses and has partnered with more than 30 chambers of commerce.

Health insurers do not like the practice of bundling because they claim it encourages their members to not be judicious about their health care spending and actually overuse their health coverage.

California Insurance Commissioner Steve Poizner is investigating the issue to determine whether firing health insurance brokers in this scenario would constitute a brach of legality and contractual obligation.