California legislators have apparently reached a bipartisan solution to prevent more than half a million children from being cut from the Healthy Families public health insurance program.

The Senate Appropriations Committee voted Thursday to send the proposal to the full Senate. All but two Republicans on the committee – one was absent – voted with Democrats to move it to the floor. Gov. Arnold Schwarzenegger also supports the measure, said spokeswoman Rachel Cameron.

The state board that manages the programs had planned to begin sending disenrollment notices next week to the first wave of children set to lose coverage but decided Thursday to delay the move for a month.

The bill, which surfaced this week, would raise money for Healthy Families by having participating families share more of the costs of coverage and extending a gross premiums tax on companies that manage Medi-Cal insurance plans.

Such insurers already pay a state tax that is due to end Oct. 1 because it doesn’t match new federal guidelines.

The bill would lower those insurance managers’ gross premiums tax to 2 percent from the current 5 percent.

“We’re hopeful that a bipartisan solution can be found so that over 700,000 low-income kids are able to keep their health coverage,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento, who is co-sponsoring Assembly Bill 1422 with Assembly Speaker Karen Bass, D-Los Angeles.

Bass credited what she said was an “unprecedented effort” on the part of the health plans, which she said essentially were willing “to impose a voluntary tax on themselves” to keep hundreds of thousands of low-income children on their insurance rolls.

“It’s going to take a little bit more work in the Assembly but … I’m confident we’ll be able to get it out of both houses,” she said.

No industry opposition to the proposal has been registered.

The California Association of Health Plans, which represents businesses that would be taxed, supports the bill. Nicole Evans, an association spokeswoman, said, “It appears there is bipartisan support. We hope the bill will move along.”

In a statement, the association also said: “The bill offers a viable solution that will not increase premiums for people who get health coverage through their employer or who individually pay for their coverage.”

Because the bill levies a tax, two-thirds of both the Senate and the Assembly must approve it, which means GOP votes are required.

Healthy Families, which provides low-cost insurance to children of low-income working families whose employers don’t provide coverage, saw its funding slashed by $178 million with April’s state budget revisions.

The bill to restore some of those losses also includes changes that will require some families to pay higher premiums and all to pay higher co-payments for services. The plan also relies on an $81 million commitment from the First Five Commission, the panel that administers voter-approved tobacco tax funds for early childhood programs.

Sen. Dave Cox, R-Fair Oaks, who serves on the Appropriations Committee, said he voted for the bill because it would prevent hundreds of thousands of children from losing their insurance at a dangerous time.

He said he isn’t sure whether to believe reports that the H1N1 virus, or swine flu, could spread through schools and the population at large this year, but added, “I’m not willing to take that chance.”

Cox voted for the bill in the Health Committee on Wednesday but said he had reservations. His support increased for it Thursday in Appropriations when amendments were added to exempt dental-insurance managers from paying the tax because it would have to be calculated differently and would be comparatively too high.

Krystal Moreno Lee, a health policy associate for Children Now, said, “We’re happy to see so many folks mobilizing to save this program. We’re happy to see leadership and effort.”