Functioning at the Brink: The Children's Health Initiatives Have Grown But May Not Survive

Background: Since 2001, 31 California counties formed Children's Health Initiatives (CHIs) to provide health insurance coverage to otherwise uninsured low-income children in California. This program is locally funded through a mix of public and private dollars. Although Healthy Kids is the only affordable source of comprehensive coverage for these children, anticipated funding deficits threaten to close this program and disenroll thousands of children.

Objectives: This study investigated the financial stability and experiences of the CHIs as they aim to remain viable while waiting for legislative action.

Methods: Online questionnaires and telephone interviews were conducted with 26 active CHI counties that operate a Healthy Kids program. The CHI director or coordinator from each CHI county participated in an interview between March and June 2007 (response rate=100%). Healthy Kids enrollment and financial forms were also completed by CHI directors between April and June 2007. Data were reported separately for children 0-5 years and 6-18 years.

Results: 25 California counties are currently operating a Healthy Kids program and these counties account for 80% of the State's total uninsured children. Based on the reports from CHI directors, there were approximately 201,000 children eligible for the Healthy Kids program in the counties that enrolled 83,940 children (42%). However, approximately 117,107 children (58%) still remain uninsured. The main barrier for expanding coverage to all children is mostly due to financial limitations. Maintaining coverage for children ages 0-5 is supported by First 5 commissions but this is not a reliable funding source for covering children ages 6-18. The predicted $175 million deficit on premium funding for children ages 6-18 over the next three years threatening the program's survival. Although more than half (60%) of CHIs reported that funding for outreach/enrollment was generally very good, elimination of funding from the state due to its budget crisis could jeopardize such activities. An important but often overlooked problem for CHIs is funding for administration since most donors fund premiums but not administration costs because the outcomes for premium funding could be easily measured by change in enrollment but administration could not.

Conclusion: With the lack of a sustainable funding stream, many philanthropies that have been supporting this program could not provide premium support indefinitely due to their programmatic and financial limits. Successful health reform in California as well as at the national level is critical to the survival of this important program.