California Restores Funding for CHIP Program - September 16, 2009

California has adopted legislation to restore funding for the state's Children's Health Insurance Program (CHIP), Healthy Families. Budget cuts adopted in July resulted in a freeze on new enrollments in the program and would have required California to terminate coverage for 600,000 children currently enrolled in the program. The new funds will enable the state to maintain coverage for all children currently enrolled in Healthy Families, enroll children who were placed on a waiting list after the enrollment freeze was imposed, and open the program to new children. The legislation raises funds for Healthy Families through a new 2.35 percent gross insurance premium tax that will be imposed on Medi-Cal managed care plans through January 1, 2011, as well as through a premium increase on families earning above 150 percent of the federal poverty level. The state's current 5.5 percent Medi-Cal managed care quality improvement tax expires at the end of September.