HHS Approves California Waiver to Expand Coverage to 300,000 Uninsured

As expected, HHS Secretary Tommy Thompson on Jan. 24 approved California's plan to extend coverage to 300,000 uninsured residents -- mostly low-income parents -- through the state's Medicaid and CHIP programs. Under the waiver, the state can offer coverage to the "custodial parents, family caregivers and legal guardians" of children who are eligible for Medi-Cal or Healthy Families, the state's Medicaid and CHIP programs, respectively. To be eligible, parents must be uninsured and earn no more than 200% of the federal poverty level, or $35,000 for a family of four. HHS estimates that 275,000 parents will be eligible for coverage under the expansion, and as a result of parental participation, an additional 25,000 children are expected to enroll in the state programs. The waiver was approved under HHS' Health Insurance Flexibility and Accountability Initiative, or HIFA, which was launched by Thompson in August to make it easier for states to extend coverage to the uninsured through CHIP and Medicaid expansions. California is the second state to receive a HIFA waiver, following last month's approval of Arizona's plan to cover roughly 25,000 uninsured parents (HHS release, 1/24). It is uncertain when California will implement the expansion, as Gov. Gray Davis (D) has proposed delaying it until July 2003 to help reduce the state's $12.4 billion budget deficit (Kaiser Daily Health Policy Report, 1/24).

Don't Delay
Davis should "find alternative budget cuts fast" and implement the expansion immediately rather than next year, because a delay, while saving the state money, will only exacerbate the state's health care problems, a Los Angeles Times editorial says. Delaying the program "just passes the costs on to the providers of last resort, the state's already beleaguered county health departments and hospital emergency rooms," the editorial adds. Noting that postponing the expansion would lead to a loss of about $435 million in federal matching funds, the Times concludes, "The state simply can't afford to turn down that kind of cash" (Los Angeles Times, 1/25).