California Bill Saves Children’s Insurance

Gov. Arnold Schwarzenegger has signed a bill that will prevent nearly 700,000 low-income children from losing health insurance.

Schwarzenegger signed the bipartisan bill Tuesday in the state Capitol restoring funding to the state’s Healthy Families program, a government-funded health insurance plan for children from low-income families.

The governor and lawmakers slashed funding for the program in July as part of closing a projected $24 billion deficit. The state froze enrollment and would have been forced to end coverage for 670,000 children starting in October.

Under the temporary solution, California will be able to keep those children covered using a combination of a grant from First 5 California, higher premiums and extending a fee on insurers.

Under the law, health insurance companies will pay a new 2.35 percent tax. That tax income will be used to leverage nearly $100 million in federal matching funds, and those funds will be used to pay the companies back.

The governor signed the bill after threatening California lawmakers that he would sign no bills until the legislature dealt with the pressing issues of water, prisons, and renewable energy.

In a ceremony for the signing, Schwarzenegger said leaving so many children uninsured would have been disastrous, especially with the threat of an H1N1 flu epidemic threatening.