Goal to insure all kids could fall to budget ax

Eight-year-old Sarah McIntyre was set to enroll in perhaps Washington's best health-insurance deal: full medical, dental, vision and prescription-drug coverage with zero deductibles and zero co-pays — all for just 30 bucks a month.

But the Yakima girl, who suffers from bronchial asthma and needs expensive inhalers, lost her taxpayer-subsidized health coverage even before she could sign up.

Last month, Gov. Chris Gregoire suspended the Jan. 1 expansion of Washington Apple Health for Kids.

It is one of a slew of state programs facing possible cutbacks or elimination as Gregoire and the state Legislature attempt to erase a projected state budget deficit that could hit $6 billion. The Legislature opens its 2009 session on Monday.

The state budget problems threaten to halt Washington's advance toward universal health care for children by 2010 — a cornerstone of Gregoire's first run for governor in 2004 and a pledge etched in law with the landmark Cover All Kids bill that passed in 2007.

What's more, rising joblessness and the resulting loss of employer benefits are threatening to undo Washington's recent gains in reducing the ranks of the uninsured.

Gregoire also has proposed axing $252 million over the next two years from the Basic Health Plan, which sells affordable, subsidized medical coverage to lower-income families. Dismayed advocates fear that would raise the number of uninsured among both children and adults even further.

All that will pose unpleasant dilemmas in Olympia. While lawmakers don't all agree on budget priorities, there is no debate that the state simply can't afford everything.

Kids without coverage

Since the passage of the Cover All Kids law, nearly 40,000 children have become insured under Medicaid and two other state health plans. But a biennial state populations survey, released in November, found a net drop of just 5,000 uninsured children since 2006 — a sign that the economy is fast stripping coverage from children with previous insurance.

As a result, some 78,000 children, or 4.6 percent, remain uninsured in Washington, about the same level as in 2002. The true picture likely is worse; the latest insurance tally was taken during the spring, before the full force of the economic meltdown began reverberating.

Any effort to maintain health care for kids may come at the expense of coverage for adults.

"Our priorities are kids, kids, kids," said Sen. Chris Marr, D-Spokane, the main sponsor of the Cover All Kids bill. "Adults will come after that."

Marr said brute math dictates priority for children: They're cheaper to insure, and keeping them healthy now pays financial dividends later.

Children's advocates say they are frustrated that Gregoire has reneged — however temporarily — on her promise to cover all kids by 2010 and all residents by 2012.

"I think it's absolutely inexcusable" that the state would pare back health care, said Teresa Mosqueda, a lobbyist for the Children's Alliance of Seattle. Health care "is a fundamental thing that we have to protect."

Karina Shagren, a spokeswoman for Gregoire, said the governor still hopes to fulfill her pledge to children and is exploring all options to do that.

"She's certainly not giving up on that goal," Shagren said. "Given what she had to work with, the governor did the best she could to protect the state's most vulnerable."

A leader nationally

Washington historically has been a national leader in children's health. In 1994, it became one of the first states to extend Medicaid eligibility to children from families earning up to twice the poverty level.

Today, Washington is one of only three states to begin implementing universal coverage for all children, including legal and illegal immigrants, according to Liz Arjun, an analyst with Georgetown University Health Policy Institute in Washington, D.C. Massachusetts and Illinois are the other two.

In contrast, almost one of every six adults in Washington is uninsured, a 50 percent jump from 2000. Healthy adults, no matter how poor, are ineligible for Medicaid unless they are pregnant, elderly, blind or disabled. People 65 and older are the only group to enjoy near-universal coverage, thanks to Medicare.

Currently, every child in the state whose household income is less than two times the poverty level ($35,200 for a family of three) qualifies for free health coverage; there are no premiums and all bills are covered at 100 percent. Families with incomes between 201 percent and 250 percent of poverty level ($44,000 for a family of three) pay $15 a month per child.

On hold for now are plans to extend coverage to families earning up to three times the poverty level. Separately, an attempt to allow higher-income families to buy into the Medicaid program has been stymied by the difficulty of keeping it affordable without a public subsidy.

Sarah McIntyre's parents, Vicky and Dewayne, were counting on that expanded coverage. The family earns more than $40,000 a year, too much to qualify for any of the public health plans, but not enough to buy the insurance on their own.

Vicky works for a national retailer that provides affordable health plans for employees. But the benefits are skimpy. Prescription-drug coverage, for instance, is limited to $500 a year, not enough to pay for even one month of her daughter's asthma medications. Dewayne has better coverage from his job as a welder, but the premiums are too high.

Sarah's parents applied for state coverage and expected to enroll Jan. 1. She has had surgery to plug a hole in her heart and is missing a quarter of her lungs. The McIntyres have juggled her medical treatments with intermittent health insurance and credit-card debt, but sometimes they had to simply forgo care.

"We just work around it. There is nothing we can do," Vicky McIntyre, 42, said.

McIntyre said she has considered divorcing her husband as a way to qualify for Medicaid. She calls herself not very political, but feels strongly that society should guarantee health care for children.

"All I know is that my daughter needs it," McIntyre said. "All kids deserve it."

Untapped assistance

One big barrier to insuring all kids is failure by families to enroll them in programs for which they're already eligible. Those kids account for 70 percent of the 78,000 currently uninsured children.

One culprit may be the stigma of asking for government help, said MaryAnne Lindeblad, director of the division of health-care services with the state Department of Social and Health Services. Families sometimes sign up for public-health plans in the same places that issue food stamps.

Other families may not know coverage is available or that they qualify, she said.

Officials have streamlined the application process and made it easier for families to prove eligibility. They also hope to accept applications online soon.

Gregoire cut $1.2 million of the outreach funding in her budget proposal. But Marr said he, Rep. Larry Seaquist, D-Gig Harbor, and other lawmakers will work to restore it.

Lindeblad said the enormous state budget shortfall would slow, but not derail, Washington's quest for universal health care for children.

"We are as close to having all kids covered" as any state, Lindeblad said.

Marr said he and his fellow lawmakers are counting on the incoming Obama administration to release federal money to help pay for extending coverage to families like the McIntyres. The state would still have to cough up $1 for every $2 from the federal government, but Marr contends that it would be money well spent.

"We owe a higher duty to kids," Marr said.

Seattle Times news researcher David Turim contributed to this report. Kyung Song: 206-464-2423 or ksong@seattletimes.com.