Plan aims for more child-health federal funds

PHOENIX — A plan by three hospital groups to leverage more federal cash for themselves will also help provide care to more than 19,000 children of the working poor, at least temporarily.

The proposal, unveiled Monday, involves the University of Arizona's health care network, Maricopa Integrated Health System and Phoenix Children's Hospital putting up about $60 million a year in each of the next two years to pay for care for those without health insurance. That now includes people who used to qualify for the Arizona Health Care Cost Containment System (AHCCCS), the state's Medicaid program, before Gov. Jan Brewer ordered cutbacks.

In exchange, though, Medicaid would kick in an additional $114 million each year to help the hospitals pay for that care.

But Don Hughes, the governor's health care adviser, said federal Medicaid officials are willing to provide that match only if some cash also goes to the Kids Care program.

That program provides care to children of the working poor who earn too much to qualify for Medicaid. But an enrollment freeze ordered by Brewer nearly two years ago took enrollment, then close to 45,000, down to the current level of slightly more than 14,000.

And the number on waiting lists is now approaching 129,000.

So to make the deal happen, the hospitals are putting up another $10.7 million. That will leverage nearly $34 million in Medicaid funds each year, enough to provide care for 19,283 of those on that list.

Brewer, who implemented the enrollment freeze, praised this idea because it involves no state general fund dollars.

“Locally designed solutions, not federal mandates, are the best way to move forward ensuring Arizonans continue to have access to the best quality health care possible at an affordable cost,'' she said.

The deal is contingent on approval by Medical officials in Washington. But Hughes said that agency has given the go-ahead to similar plans by other states.

He expects a decision in January or February.

Brewer acknowledged the new funds go only a small and temporary way to restoring the cuts in health care that she made to balance the state's budget.

“It obviously is a bridge to provide more care to 19,000 more children and allow the hospitals to receive some funding in regards to their uncompensated care they are all providing, which is huge. And it's a bridge until we figure out, find out from the federal government what's going to happen with Obama health care.''

That federal law, if it takes effect in 2014, would greatly expand the Medicaid program. But governors of several states, including Brewer, have filed suit to block its implementation.

Gubernatorial press aide Matthew Benson said if his boss is successful in killing the federal law, then the state will start to drop those 19,000 children from the rolls in 2014. He said the state's ongoing budget problems provide no alternative.

“The governor is interested in providing as much coverage as the state can afford,'' he said.

There is another very similar option, one that actually could restore virtually all of the cuts to AHCCCS that Brewer already has made: a statewide “bed tax.'' But Brewer has so far refused to take a position one way or the other.

Peter Wertheim, the association's lobbyist, praised the three hospital groups for thinking creatively about ways to generate more federal cash for themselves. But he said it's not a long-term answer to the increasing number of uninsured.

“We're looking for a statewide fix,'' he said.

Those AHCCCS cuts, said Wertheim, have harmed hospitals statewide.

He figured hospitals lost about $100 million in just the most recent quarter in providing care to those without insurance, whether state or private, who could not pay their bills. Wertheim said that is a 31 percent increase over the same period a year earlier, before the cuts to AHCCCS funding imposed by Brewer.

The bed tax idea has so far failed to gather much support at the Capitol.