Changes to the government health insurance plan for children in low-income families mean thousands of Arizona kids may be without insurance starting this weekend, and those children may not be able to get insurance through the Affordable Care Act’s insurance exchanges.
Arizona has two insurance programs for children in low-income families. The older one is called KidsCare, and it’s essentially the Medicaid program for kids.
In a budget-saving measure, the state stopped allowing new enrollment in the program in late 2009. That’s why a second insurance program was created in 2013, called KidsCare II. Combined, the two programs insure about 42,000 Arizona children, according to state numbers.
Almost 90 percent of those children are in the KidsCare II insurance program, which is ending Saturday. It was extended, with federal permission, an extra month into 2014, said Monica Coury, spokeswoman for the state's Medicaid system, known by the acronym AHCCCS.
The elimination of KidsCare II leaves children with two options for future health insurance coverage: their families can enroll them in the state's regular Medicaid program, which takes people with an income of up to 133 percent of the federal poverty level, or those who earn between 133 percent and 200 percent of the federal poverty level may look for coverage on the Affordable Care Act insurance exchange. Some of those people would be eligible for federal subsidies to pay for the care.
But there is a group of people who may not be able to get insurance on the exchanges, and the situation could leave 10,000 to 15,000 children uninsured Saturday, said Tucson Dr. Daniel Derksen, director of the Center for Rural Health at the University of Arizona.
"I think it’s not, from a policy perspective and even from a health outcomes perspective, a good idea to leave thousands of children uninsured," Derksen said.
And state lawmakers are confused about the situation, said State Sen. David Bradley, D-Tucson.
Last legislative session, lawmakers thought the above scenario was simple: most low-income families could either keep their kids on state Medicaid coverage, or would be able to shop for new federally-subsidized policies on the health insurance exchange, Bradley said.
A loophole in the ACA is to blame for the thousands of Arizona children who could lose coverage because their families can’t get a subsidy to buy new insurance and can't afford it without the subsidy. Dirksen and Bradley discovered it happens when a parent has insurance coverage through work.
“When a parent has an employer coverage, and the issue is affordability, and affordability is defined that if the addition of a child to the policy is 9.5 percent of a parents’ income, or lower, than they are not eligible for the exchange tax credits, they can still go to the exchange but they can’t get the tax credits if that’s the case," Bradley said.
It isn't clear how many children could be affected, but Derksen's estimate falls in line with state guesses, Bradley said.
“No one knows exactly how many kids are going to fall through this crack. There’s an estimate of something like 14,000, maybe. But realistically it’s probably going to take almost a year to find out who’s in this gap and getting to a real number," Bradley said.
Arizona is already among the five worst states in the country for uninsured children, Derksen said.
The problem would be easy to solve, and inexpensive for the state, he said. Lawmakers just have to decide to allow children whose families earn between 133 percent and 200 percent of the federal poverty level to enroll in KidsCare again.
"The estimate is that the state would have to come up with between $10 and $15 million in general fund to basically get these kids covered again and the benefit to the state was that it would draw $40 million in federal funds, so every dollar we put in, the match would draw $3," Derksen said.
Bradley is trying to find out whether a bill introduced in the state House this session could be amended to cover those children who can't get coverage starting in February.
“In the meantime there is no short-term remedy unless the state were to reinstate KidsCare," he said.
Otherwise, he and Dirksen said, the only other remedy is changing the ACA to remove the loophole for families in which one member is covered by insurance through work. That would require Congress approval.