Policy

Arizona Reinstates Children's Health Insurance Program

Federal funds cover all costs through September 2017

Tourists from Arizona in front of the U.S. Capitol in October 2014. (Bill Clark/CQ Roll Call file photo)

An estimated 30,000 low-income children are now eligible for benefits under Arizona’s health insurance program, after nearly six years of unstable coverage.  

Arizona’s program, KidsCare, will start enrolling children who live in households with income between 133 percent and 200 percent of the federal poverty level on Tuesday. Coverage would begin Sept. 1, the federal Centers for Medicare and Medicaid Services said in an announcement Monday.  

Vikki Wachino, CMS Deputy Administrator and Director of the Center for Medicaid and CHIP Services, said in the statement that the development is a step forward for children in the state. Every state will now offer Children's Health Insurance Program coverage.  

“More children in Arizona will have access to coverage early in their lives, which helps kids grow into healthy adults and provides parents with the peace of mind that comes from their children having affordable coverage,” Wachino said.  

The announcement comes months after the Arizona legislature voted to reinstate the program at the end of the session in April. Arizona Gov. Doug Ducey, a Republican, signed the bill May 6.  

In 2010, the state froze enrollment for KidsCare, citing budget woes that made it difficult to meet the state matching rate requirements. About 46,000 children lost coverage.  

The state, responding in 2012 to public concerns about uninsured children, created KidsCare II, a more limited program which took in 37,000 kids. That program expired in 2014. About 23,000 kids under six years old then were shifted into Medicaid, while the others were forced to find coverage elsewhere. A Georgetown University Center for Children and Families report found that the confusion over who was and was not eligible for benefits likely led to children losing coverage.  

The uncertainty led to a growing uninsured rate for children. In 2014, Arizona had the third-highest rate of uninsured children among all the states and the District of Columbia for the fifth year in a row, according to a Georgetown center study.  

However, when the state expanded Medicaid coverage, those losses were mitigated. Between 2013 and 2014, the rate of uninsured Arizona children went down from 11.9 percent to 10 percent, with about 30,000 fewer children uninsured.  

Kelly Whitener, associate professor of the practice for Georgetown University’s Center for Children and Families, said in an interview that Arizona advocates for children ramped up their efforts within the last year when the opportunity for additional federal dollars to states for CHIP became available.  

Arizona lawmakers, aware of the state's dismal rankings for children's coverage, became interested in resurrecting the program. They were further encouraged to revive it when they realized that federal funds would cover all the costs through Sept. 30, 2017.  

Whitener said, “Not having any state money in the mix is the only thing, really, that allowed [CHIP] to move forward this year.”  

Maureen Hensley-Quinn, senior program director for the National Academy for State Health Policy, said in an interview that as the state began to move past the most labor-intensive parts of implementing the health law, it’s unsurprising that Arizona decided to reinstate the program, particularly when federal funding pays the costs.  

“There were a lot of implementation steps that fell on states’ shoulders,” Hensley-Quinn said. “There’s sort of a moment [when] they could reassess and look at insurance groups across the states and reconsider.”

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