Ariz. saves KidsCare and adult Medicaid benefits

2009 04 21 13 23 16 721 Money Belt Tighten 70

The U.S. healthcare reform bill is being credited with Arizona's decision last week to restore funding for the state's Children's Health Insurance Program (CHIP) -- known as KidsCare -- and Medicaid benefits for 310,000 adults.

Facing a $2.6 billion shortfall, in March state lawmakers opted to shut down the KidsCare program and eliminate Medicaid adult services as part of the 2010 budget. The KidsCare program, which provides medical and dental coverage to 38,000 low-income children, was slated to end June 15, and Medicaid benefits for some 310,000 adults were to be discontinued starting September 30.

But on May 6 Gov. Jan Brewer signed S.B. 1043, which restores funding to the Arizona Health Care Cost Containment System (AHCCCS), the state's Medicaid program, and reauthorizes the KidsCare program. The bill directs $9 million to KidsCare and reinstates adult Medicaid services.

"Three cheers for the governor for recognizing that this is an imperative need for the state," said Liz Rogers of Oral Health America. "This is good news at a time when there is not a lot of good news."

Federal funding at risk

The change was prompted by U.S. President Barack Obama's healthcare reform legislation, which was signed into law March 26, according to Monica Coury, assistant director of intergovernmental relations at AHCCCS. Among other things, the bill requires states to continue funding healthcare programs at current levels or forfeit all future health funding aid, including Medicaid.

"The state had decided to terminate its CHIP program and Title 19 program for about 300,000 lives -- all childless adults and some parents," Coury told "But because healthcare reform passed and included a maintenance of eligibility requirement, states are no longer able to make any changes that will make this more restrictive without risk of losing all federal Medicaid funding. So the state Legislature decided that was not worth pursuing and moved ahead to restore the CHIP program."

Arizona would have lost nearly $8 billion in federal funding next year if the governor had gone ahead with plans to scale back the two Medicaid programs, according to the Arizona Daily Star. More than 1.3 million people currently receive Medicaid coverage in Arizona, according to Coury.

"The Arizona Dental Association is pleased that the Legislature has chosen to reinstate the KidsCare program," Kevin Earle, M.B.A., M.P.H., the association's executive director, told "Now families in this segment of our population won't lose important medical and dental benefits, and federal dollars supporting our safety net healthcare programs won't be at risk. We are going to have to be vigilant in the coming months and years, as we work our way out of our current economic problems, that these programs are preserved and sustained."

The money is expected to come from about $435 million in federal stimulus funds the state should receive as part of the jobs bill currently awaiting Obama's signature. But if that funding does not come through, Arizona will go ahead with its plan to drop the 310,000 Medicaid recipients from AHCCCS, according to Coury.

"If Congress passes an extension of the Recovery Act, we will be able to use that general fund savings to cover that part of the population from Title 19 that we were originally going to eliminate," she said. "But if Congress doesn't pass it, in January 2011 we will have to find $400 million to fund the program."

The KidsCare program, however, will be funded "unconditionally," although an enrollment freeze on the program will remain in place.

"We are always thrilled when states continue to do whatever they can to expand access to care for Medicaid- and CHIP-eligible children," said Mary Foley, executive director of the Medicaid/SCHIP Dental Association. "Our mission is to improve the health of these children, so anything that increases access to services delights us."

Copyright © 2010

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