Arizona Medicaid changes could give health coverage to 10,000 more kids. Here's how
Arizona is expanding parameters for children to get Medicaid coverage
Arizona is expanding parameters for children to get Medicaid coverage, which health care advocates say is a positive move for a state with consistently high rates of uninsured children.
Arizona Gov. Katie Hobbs announced Tuesday that a change in state law, which got federal approval on Friday, will allow up to 10,000 more children in Arizona to qualify for Arizona's KidsCare program. Hobbs has said that expanding access to health care is one of the pillars of her administration.
In order to qualify for the state's KidsCare program, annual family income limits will be rising to 225% of the federal poverty level, which works out to an annual household income of up to $70,200 for a family of four, according to a fact sheet from the governor's office. The change will take effect April 1, and newly eligible families may begin enrolling on March 1, Hobbs' office said.
“When kids have access to affordable health care, it means more than just a healthier life," Hobbs told reporters gathered at the Mountain Park Health Center Glendale Clinic. “It means better high school and college graduation rates, it means they’re more likely to find a good paying job.”
KidsCare is a Medicaid program for children younger than 19 whose parents are earning too much to qualify for traditional Medicaid but not enough to afford commercial insurance, including what's offered on the federal Affordable Care Act marketplace, even with subsidies. The program charges families a monthly premium ranging from $10 to $50 per month per child based on their income.
The state's 2024 budget allocates $5.5 million in general fund money for KidsCare expansion, and $6.6 million for fiscal year 2025, AHCCCS officials said Tuesday.
Child advocates wanted KidsCare income limit to be higher
Medicaid in Arizona is called the Arizona Health Care Cost Containment System and KidsCare is Arizona’s version of the federal Children's Health Insurance Program, or CHIP. CHIP was created in 1997 with bipartisan support during the Clinton administration.
Advocates from the Phoenix-based Children's Action Alliance had wanted the KidsCare threshold to increase to 300% of the federal poverty level, which would work out to a household income of up to $90,000 for a family of four.
But raising the limit to 225% is a step in the right direction and a positive step for Arizona because the median income limit for children's health insurance programs across the country is 255% of the federal poverty level, Matt Jewett, health policy director for the Children's Action Alliance, said Tuesday.
"So we're getting closer to that, but we're still less than the majority of states," Jewett said. "This means that 10,000 kids are going to get the care that they need, they are going to be able to get preventive care so that their asthma doesn't keep them out of school, it keeps them out of emergency rooms and it gives parents peace of mind."
Jewett said the next step is providing outreach to families to let them know their children may now qualify for coverage through KidsCare. Anyone who needs assistance can go to CoverAZ.org or call 800-377-3536.
AHCCCS primarily provides health coverage to low-income people typically living at about 138% or less of the federal poverty level and to people with disabilities. Traditional AHCCCS thresholds vary but are generally up to 138% of the federal poverty level, or $43,056 in annual household income for a family of four.
The higher income parameters are what makes the KidsCare program different from traditional Medicaid because it opens up AHCCCS enrollment to the children of working families who have incomes that are higher than the poverty level, but still struggle to pay for essential needs like health care for their children.
Federal officials with the Centers for Medicare and Medicaid Services approved Arizona's request to raise the KidsCare income limit on Feb. 16. The change stems from a bill the Arizona Legislature passed in 2023 that was later signed into law by Hobbs.
Arizona has one of the highest levels of uninsured children in the U.S.
The latest state data show that KidsCare enrolls about 61,843 Arizona children under the age of 19. Most children covered by AHCCCS are on traditional AHCCCS. The program, including the KidsCare population, enrolls a total of nearly 790,000 children ages 0 to 17, which is 37% of the overall AHCCCS population. AHCCCS enrolls another 147,081 young people ages 18 to 21.
The AHCCCS population has declined by 12% over the past year in part because of a trend as Medicaid programs across the country drop people from their rolls because of post-pandemic policy changes. The total AHCCCS population as of this month is 2.2 million people, down from 2.5 million people in February 2023.
Whether or not all the people losing AHCCCS are getting health insurance coverage elsewhere is unclear, but the level of uninsured children in Arizona has long been a problem.
As of 2022, there were 142,000 Arizona children under the age of 19 without health insurance, according to a report from Georgetown University's Center for Children and Families. The report places Arizona's rate of uninsured children at 8.4%, which is higher than the national average of 5.1% and the fifth highest in the country behind Texas, Florida, California and Georgia.
Dr. Daniel Derksen, director of the Center for Rural Health at the University of Arizona, estimates that about 850,000 Arizonans lack health insurance, up from about 700,000 a year ago, mostly because of the Medicaid policy changes that disenrolled people from programs across the country. Having more people without health insurance puts added financial pressure on safety net health providers such as federally qualified health centers, which is why he said adding more children to KidsCare is progress, even if it's incremental.
"It's not as much as a lot of us would like to see, but this is moving us in the right direction," he said of the KidsCare expansion. "We want kids to be healthy and have access to high quality care. ... This is good news all the way around."
Arizona will now pay parents who are caregivers for minor children with disabilities, Hobbs announced
In addition to announcing the expanded KidsCare parameters, Hobbs announced that Arizona recently got approved to pay parents who are caregivers for children with disabilities through the state's AHCCCS program.
The changes apply to parents whose kids are minors and eligible for the Arizona Long Term Care System, known as ALTCS, which is for people with disabilities significant enough to need institutional level care, even though they may not be living in an institution.
Before COVID-19, Arizona parents of minor children with intellectual and developmental disabilities had never been paid for care they provided to their kids. During the pandemic, a shortage of direct care workers, combined with stay-at-home and social distancing recommendations, led the state to ask the federal government for some flexibility in reimbursing parents for the “extraordinary care” that was required of them to provide throughout the course of the pandemic.
Parents had asked the state to continue the program and have said Arizona's willingness to make that move shows it is "forward thinking," and supportive of family caregiving. The parents as paid caregivers program will be an ongoing state general fund cost of $133,100, an AHCCCS spokesperson wrote in an email.
Hobbs said Tuesday that, despite the state's dire budget forecast of a deficit of $1.7 billion, both KidsCare and parents as caregivers program would be priorities for her to continue. She will negotiate a budget with lawmakers for the fiscal year that begins July 1.
The two additions to AHCCCS "will have a direct impact on children in Arizona," Hobbs said in a written statement.
"Increasing the upper income limit on KidsCare eligibility means more children will get needed health care services through their early development, creating a healthier population overall,” she said. “And parents of children with intellectual and developmental disabilities will be compensated for delivering health care services to their children."