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Arizona Legislature buckling to feds on health care spending

The Arizona Legislature has taken the first step to repeal cuts to health care programs in order to comply with the federal health care law and avoid losing nearly $8 billion in federal funding.

The House Health and Human Services Committee approved a strike-everything amendment to S1043 in a special hearing this morning that restores a children’s health insurance program and undoes a rollback in eligibility for the Arizona Health Care Cost Containment System, the state’s Medicaid program.

The bill would authorize the state to accept additional federal stimulus money to pay for the programs, which would allow 310,000 people to continue coverage under AHCCCS and another 47,000 children to receive coverage under KidsCare.

The AHCCCS eligibility reduction and the elimination of KidsCare were both part of the budget for the upcoming year, which lawmakers approved last month.

Lawmakers are trying to reverse both decisions because the cuts ran afoul of the federal health care law that was signed into law earlier in March. Under that law, changes to state programs would disqualify states from receiving federal health care money. That meant Arizona would forfeit $7.8 billion.

Republicans said they had no choice but to restore the health care spending, even though the state can’t sustain the spending long term.

“The federal government has created a scenario where we are obligated to restore KidsCare,” said Rep. Nancy Barto, a Phoenix Republican and chairman of the committee.

Democrats, meanwhile, were ecstatic that the KidsCare program was being reinstated.

“I have never been more excited, more enthusiastic to vote yes on a bill in this committee,” said Rep. Ed Ableser, a Tempe Democrat.

The committee approved the bill unanimously by an 8-0 vote. After a constitutional check by the Rules Committee, it will be cleared for a vote on the House floor.

The bill would restore the state programs, but only if Congress approves an extension of federal stimulus aid that helps states pay for health care costs. Arizona is expected to receive about $400 million from that extension, which will pay for both KidsCare and the expanded AHCCCS enrollment until the end of fiscal 2011.

The U.S. Senate has approved the extension of the funding for an additional six months, beginning in January 2011, but the U.S. House of Representatives has yet to take up the matter.

That chamber is expected to extend the state aid in May, and President Obama has said he will sign it.

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