With the wallet empty for KidsCare, Ducey quietly pushes for funding for children's health

Gov. Doug Ducey was not shy in making clear his position on repeal and replacement of the Affordable Care Act. 

But he's been quiet on another federally funded health-care program: the Children's Health Insurance Program, known in Arizona as KidsCare. It provides health coverage to kids whose families make too much to qualify for Medicaid, but not enough to buy insurance on their own. 

Unlike "Obamacare," as the ACA is known, CHIP has lost its funding, because Congress failed to reauthorize the legislation that pays for the program by the Sept. 30 deadline.

Funding may run out in weeks

Arizona's KidsCare account is running on fumes. Boosted by an extra $22 million in leftover federal money, the program is still on track to run out of money by late November. That would force the state to kick more than 23,000 kids off the program. 

That move could cost Arizona even more, as reliable health care is often seen as one safety net to keep children out of the state's foster-care system. 

Ducey earlier this week told The Arizona Republic he supports KidsCare, and said he is working with Arizona's congressional delegation as well as the Trump administration. But, he added, he needed clarity on what Congress is working on.

SEE ALSO:How many Arizonans would lose health coverage with 'Obamacare' repeal?

"There are some changes in Washington, D.C., so I want to see what the details are and then we'll make some decisions," Ducey said. 

However, he wants to see the funding restored, spokesman Patrick Ptak said Thursday. Arizona planned on $112 million from the feds to pay for KidsCare in the current budget year. But without reauthorization, the money won't come. And Ducey wants Congress to act quickly, Ptak added.

That was clear in the governor's remarks to reporters this week, when he complained that Congress is not getting anything done. 

“I’ve heard a lot out of Washington, D.C.; I don’t see a lot of action,” the governor said.

A critical time for Arizona kids

The situation is particularly worrisome in Arizona, which just a year ago lifted a six-year freeze on enrollment in KidsCare. As a result, enrollment swelled nearly three-fold, to the current 23,199, state data show. State officials said it was a sign of the clear need  in a state with one of the highest rates of uninsured children in the nation.

Depending on what Congress does next, two things could happen:

• All 23,000 would all lose coverage if Congress fails to restore funding.
• If Congress restores funding at anything less than the full cost of the program, Arizona law requires the state to halt enrollment in the program. (The program has grown every month since last year, with 810 kids signing up in September.)

The enrollment freeze is a provision lawmakers, wary of any federal responsibilities being transferred to the state, tucked into the fiscal 2018 budget earlier this year. 

Ducey's office downplayed the likelihood of either scenario, noting both the U.S. Senate and the House have proposed bipartisan bills that would continue funding at the previous levels.

If that doesn't happen, officials could look for state funding to fill in the gap. But at $112 million, and a state budget shortfall already reported, that's unlikely.

"If it gets to that point, we'll take a look and make some decisions," Ptak said. But he said state officials remain optimistic there will be a solution, and quickly.

Time is running short

The Arizona Health Care Cost Containment System, which runs the program, wants to give families at least a 30-day notice if the program is going to end, spokeswoman Heidi Caprioti said.

But they're holding out, hoping for news from Washington D.C.

"We certainly don't want 23,000 children to lose their health insurance," Caprioti said.

Nor do at least five members of Arizona's congressional delegation. In a Sept. 14 letter to House and Senate leaders, the Arizona delegates urged continuation of the program.

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They noted the increase in enrollment once Arizona's self-imposed freeze lifted, and said a funding reduction would push the state backwards.

"Instead of undermining the important gains Arizona is continuing to make, we must collectively build on that progress," they wrote.

It was signed by the four Democrats in the delegation: Rep. Tom O'Halleran, Kyrsten Sinema, Raúl Grijalva and Ruben Gallego. Republican Rep. Martha McSally also signed the letter.

Ensuring reliable health care is an important part of keeping kids and families from some of the stresses that can push them into the child-welfare system, advocates say.

“It (health coverage) generally helps families be more stable and strong, which means they’re less likely to suffer from abuse and neglect," said Dana Naimark, president and CEO of the Arizona Children's Action Alliance.

Rep. Heather Carter, chairwoman of the House Health Committee at the Arizona Legislature, said a cut in enrollment, or an end to the program, would reverse what she called the great improvements happening at the state Department of Child Safety.

"KidsCare is as important now as it was in 2016," Carter, R-Cave Creek, said.

Revisiting a hard-fought battle

Last year, she and other advocates pushed for months to get the state to accept the federal funding and end the enrollment freeze that was imposed in 2010 during the recession.

It was a hard-fought battle, with Ducey on the sidelines. He never spoke publicly about where he stood on the issue, leaving lawmakers guessing. However, as soon as the bill hit his desk, he signed it. 

Likewise, the governor has not spoken publicly this year about the loss of KidsCare dollars. Ptak said that's because, with bipartisan support in Congress, the governor is confident the widely popular program will be continued.

That wasn't the case with Obamacare, where support for a repeal-and-replace measure was tenuous. Ducey spoke out to lend support to a last-ditch proposal floated by several U.S. senators, but the measure failed in a dramatic vote with Sen. John McCain casting the deciding "no" vote.

About this report

In 2016, when the number of children removed from their families peaked at more than 18,000, the Arizona Community Foundation gave The Arizona Republic and azcentral.com a three-year grant to support in-depth research on the topic. As part of that effort, reporter Mary Jo Pitzl and our other staff experts investigate the reasons behind the surge in foster children and the systems meant to support and protect them.

Are you part of the system? We want to understand your story. Go to childwelfare.azcentral.com.

Reach the reporter at maryjo.pitzl@arizonarepublic.com and follow her on Twitter @maryjpitzl.