Officials: Nothing to worry about – yet – when health programs expire

Arizona’s version of the Children’s Health Insurance Program will be dropped and a program that reimburses hospitals for indigent care will be cut, after Congress failed to act on them last week. But state officials said they will continue operating for now, giving Congress time to act. (Photo by Alex Proimos/Creative Commons)

WASHINGTON – With Congress focused on the fight over an Obamacare replacement, lawmakers failed this week to take action on programs that protect 22,000 low-income kids in Arizona and help pay for uncompensated care at state hospitals.

The Children’s Health Insurance Program – which goes by the name KidsCare in Arizona – is set to expire after midnight Saturday, the same moment that an automatic $11 million cut to the Disproportionate Share Hospital Payments program is scheduled to kick in.

But officials with the state’s Medicaid office said the situation with KidsCare is “not dire” yet, noting that the state has sufficient funds to carry the programs through December, by which time Congress is expected to have renewed CHIP.

Heidi Capriotti, a spokeswoman for the Arizona Health Care Cost Containment System, said officials “expect to see some action from committees next week” in Washington on CHIP, although nothing is definite at this point.

If Congress does not act, it would fall to state lawmakers to decide how to proceed on the program, she said.

Arizona dropped KidsCare in 2014, briefly making it the only state in the nation without a version of CHIP. The program was revived last year and now covers a little more than 22,000 children.

The program aims to cover low-income children whose families make too much to qualify for Medicaid coverage. A family of four can get Medicaid coverage if its income does not exceed $32,724, according to the AHCCCS website, while the same family could earn up to $49,200 and possibly be eligible for KidsCare.

Families that qualify for the program are charged a sliding premium based on their income, but it is capped at $70 a month.

Advocates said they hope Congress can act quickly to renew the program, to keep the state from sliding backwards after recent “historic gains” in coverage. CHIP has had broad bipartisan support since 1997, they noted.

“To prevent us from going backwards, Congress should commit to reauthorize the funding of CHIP at the current levels,” said Children’s Action Alliance President Dana Wolfe Naimark, in an emailed statement.

The Disproportionate Share Hospital Payments program, or DSH, presents a different challenge.

Under DSH, states get an annual allotment to help hospitals that provide unreimbursed care to low-income patients that cannot be made up through Medicare, Medicaid, CHIP or other health insurance programs.

As part of the Affordable Care Act, automatic annual reductions to DSH were scheduled to kick in on the theory that Obamacare would begin to reduce the need for uncompensated care.

But the first reductions, set to take effect in fiscal 2014, were deferred by Congress to begin in fiscal 2018 – which begins on Sunday. Without congressional intervention again, that cut will amount to $2 billion to the DSH program nationally – Arizona would lose $11.2 million of the $111.2 million allotment it has been getting.

DSH is the “largest source of federal funding for uncompensated care” in hospitals, according to the AHCCCS website, which said payments are made to qualifying hospitals in the fall.

The Arizona Hospital and Healthcare Association did not immediately return calls seeking comment on the deadline.

But DJ Quinlan, of the Arizona Alliance for Healthcare Security, said he hopes that now that Congress is past the “imminent threat of the Graham-Cassidy bill” – the latest GOP attempt to overturn Obamacare – he hopes lawmakers will be able to find a way to fund both programs.