Advocates of the state’s health care program for children plan to offset expected cuts at the state level by turning to the private sector to raise resources needed to keep up with rising health care costs and to pay for comprehensive outreach and application-assistance programs.
Arizona’s budget crisis continues to threaten many social programs, and the federally subsidized, state-operated KidsCare program is no different. Lawmakers will have to trim as much as $1.2 billion from this year’s state budget and perhaps twice that amount in fiscal year 2010. Agency cuts are expected across the board.
And while advocates hold out hope for private donations, the future of the program is clouded by a looming sunset date at the federal level.
The 1998 implementation of KidsCare — also known as the State Children’s Health Insurance Program (SCHIP) — was a result of grants provided by the federal government to states opting to provide health care coverage to children exceeding what Medicaid provides.
KidsCare, which receives $3 from the federal government for every $1 provided by the state, extends qualification beyond Medicaid to children of households earning up to twice the federal poverty limit, or approximately $46,000 annually for a family of four.
In exchange for a $35 monthly premium, KidsCare members receive coverage for wellness care, vaccinations and vision. 
The qualification limits of KidsCare are routinely challenged by lawmakers. But the question of how much the state should advertise the federally co-funded program has developed into a particularly heated topic during the last decade.
“We have some legislators who don’t believe the goal is to get all kids who are qualified covered,” said Dana Wolfe Naimark, president and CEO of Children’s Action Alliance. “They think we shouldn’t be in the business of telling families that they are eligible or helping them to apply. The conflict has really driven a lot of policy practices and budget issues since KidsCare was created.”
An example of the conflict over advertising is found in the original law creating KidsCare, which included a gag order banning health care companies operating within the Arizona Health Care Cost Containment System (AHCCCS) from contracting with schools and community and faith-based organizations to promote the program and provide application assistance.
The ban was lifted in 2007 following appeals from Gov. Janet Napolitano. The new legislation (A.R.S 36-38) allowed health care companies operating within the AHCCCS managed-care system to promote health care coverage on school grounds, participate in school events and distribute applications and materials to pupils and their families.
The statute removing the gag order requires all schools contracting with AHCCCS providers to receive written permission from their school boards. Providers also are banned from screening, registering or providing services to children on school grounds.
But the contracts with schools are not the main concerns among advocates. Instead, Naimark and other KidsCare supporters are focusing their efforts on maintaining the contracts AHCCCS has formed with community and faith-based organizations.
These contracts are essential, Naimark said, to the success of KidsCare. Yet the costs associated with them are not included in the budget plan provided by AHCCCS for fiscal year 2010, which begins next July 1.
“Because there are so many families that don’t know their kids are eligible for KidsCare, it is a basic necessity that we have ongoing outreach efforts,” Naimark said.
According to an analysis by the Children’s Action Alliance, an estimated 100,000 qualified children in Arizona remain uncovered by the program, due primarily to a lack of public awareness.
And Naimark worries the cancellation of contracts with community organizations would result in even more qualified children being uninsured.
“It (community outreach) is amazingly effective, it works and it gets kids into coverage. But we can’t afford to be starting and stopping it because you lose ground every time you stop.”
Approximately $480,000 would be needed to maintain existing contracts between AHCCCS and community organizations throughout the state, according to the Children’s Action Alliance.
But key Republicans in the House and Senate have a very different plan for those funds. With the state facing a potential $3 billion deficit in fiscal year 2010, Rep. Russell Pearce and Senate President-elect Bob Burns have their eyes on reducing the amount of resources the state spends on advertising KidsCare.
“We have no business marketing free stuff, taxpayer stuff,” Pearce said. “Taxpayers should be able to keep that money.”
So KidsCare advocates have turned to the private sector to generate the funds needed to maintain the contracts. Children’s Action Alliance has drafted a letter to several Arizona-based philanthropic foundations requesting $116,000 for fiscal year 2010. The funds would be directed to AHCCCS, triggering a federal grant of the approximately $366,000 needed to fund the contracts between KidsCare and community organizations.
But even if the children’s health care program manages to offset the state’s budget scalpel by turning to private foundations, the Alliance’s plan still faces a threat at the national level: the possible reconfiguration of the federal-to-state-dollar formula.
Congress will decide in April whether to reauthorize KidsCare and other states’ SCHIP programs. Few in the health care field anticipate a reauthorization bill to fail, but children’s health care advocates in Arizona are keeping a close eye on possible funding reductions.
“Even if they (Congress) keep it level funding, which sounds like they’re keeping it and not cutting it, there really is a cut because it is not enough to keep up with the growing numbers of kids,” Naimark said. “That is the big issue; what will the amount be?”