One in every five Pima County residents is now enrolled in a state health-insurance program for Arizona’s poorest residents.
As the economic downturn persisted in 2009, the state’s version of Medicaid added more than 200,000 people, including nearly 30,000 in Pima County.
It’s a significant, historic jump, state officials say. No state program in Arizona has grown faster than AHCCCS, the governor’s office says.
Between 2004 and 2008, the number of Pima County residents enrolled in the Arizona Health Care Cost Containment System jumped by 27 percent.
During that same period, the local population increased by about 13 percent.
AHCCCS is for extremely low-income individuals and families in Arizona – in general, for people living at or below the federal poverty level. That would mean an annual income of less than $10,830 for an individual, or less than $22,050 for a family of four.
The income caps are so low that many people existing solely on unemployment insurance are earning too much to qualify for AHCCCS, program officials say.
As of Dec. 1, there were 213,876 Pima County residents enrolled in AHCCCS – 21 percent of the population.
Statewide, enrollment jumped 19 percent between Dec. 1, 2008, and Dec. 1, 2009. It’s now at 1.4 million.
“Programs like Medicaid are countercyclical and are linked to the unemployment rate,” said Monica Coury, assistant director of intergovernmental affairs for AHCCCS. “In June of 2007 we were somewhere at about 3.5 unemployment, and as we went from 3.5 to 9 percent our enrollment figures have increased in a similar fashion.”
Though there was a modest decrease in enrollment from December to January, Coury said it’s not significant enough to indicate a downward trend.
“Think about the fact that our state’s economy is heavily focused on real estate and construction, and those industries are disproportionately affected and not expected to bounce back anytime soon,” she said. “A lot of people are struggling right now.”
Longtime Tucson resident Lorie-Anne Peltz enrolled in AHCCCS in September after becoming ill with kidney stones.
Peltz lost her job as an administrative assistant for a brokerage firm in January 2009. The single mother of one also lost her health insurance, and eventually her home and vehicle, too.
She applied for jobs constantly, all the time working toward an associate’s degree in criminal justice. She’ll graduate this June.
But all she has ever been able to find are temporary jobs, most of them paying less than $10 per hour.
Except for a brief two-month period of unemployment in 2004, Peltz had always been able to find work, she said. Her first job was in a doughnut shop when she was 14.
But this past year has been different.
She’s not sure when she’ll get steady work again. Until that time, both she and her son will remain on AHCCCS.
“I want a job. I need to pay my bills,” Peltz said. “It’s very frustrating. I’m busting my butt, always putting out applications.”
What’s also frustrating is that a lot of doctors don’t take AHCCCS patients, she said, so there’s a lot of phoning and waiting.
“We’ll only be on it until I can find a permanent job,” she said. “I just thought I would have had one by now.”
The growing AHCCCS population is affecting hospitals, which say reimbursement rates for the program are so low that it hurts revenue.
“It’s our worst payer, worse than Medicare,” said Steve Bush, chief financial officer at Tucson Medical Center, Tucson’s largest hospital. “The payers that provide the highest reimbursements are HMOs and commercial insurance, so a shift to AHCCCS creates a significant problem.”
About 27 percent of TMC’s revenue in 2009 came from AHCCCS – up from 25 percent in 2008, Bush said. That represents a loss of about $1.5 million to the hospital, he said.
And as the AHCCCS rolls continued to swell in 2009, the state budget was faltering.
Enrollment in KidsCare, a state-federal insurance program for children 18 and younger, has been frozen because of a budget shortfall. KidsCare allows for higher income limits than AHCCCS. It’s for families earning less than 200 percent of the federal poverty level, which is about $44,000 for a family of four.
And Gov. Jan Brewer has proposed further cuts to AHCCCS, including eliminating coverage for 310,000 people and capping coverage for other groups.
Hospitals are objecting to those proposals. Reducing the number of people eligible for AHCCCS would have a devastating impact on hospitals’ bad-debt and charity-care costs, they say.
At TMC, bad-debt and charity-care costs in 2009 were already up a little more than 25 percent from the previous year, Bush said.
“A lot of people who are unemployed don’t qualify for AHCCCS and are uninsured. The other impact is that those with insurance have higher co-pays and deductibles,” he said.
TMC officials would not release the specific amount of bad debt and charity care from 2009, but the amount in 2008 was $28 million. A 25 percent increase amounts to $35 million.
“The proposal to cut more than 300,000 people from AHCCCS would devastate us. Our bad debt and charity would go through the roof,” Bush said. “In general, AHCCCS is an important part of the health-care system.”
On StarNet: Find more coverage of the politics of health care at azstarnet.com/news/ local/govt-and-politics
In general, families and individuals with incomes at or below 100 percent of the federal poverty level are eligible for AHCCCS.
AHCCCS is funded with a blend of state and federal money. For fiscal year 2010, the agency budget is $7.1 billion, $1.2 billion of which comes from the state of Arizona.
HEALTH REFORM AND AHCCCS
AHCCCS officials say federal health-care reform could further jeopardize their ability to function. Arizona Gov. Jan Brewer has sent a letter objecting to the Senate’s health-care reform bill.
The legislation mandates an expansion of state Medicaid programs – an expansion AHCCCS can’t afford, state officials say.
Brewer says the Senate bill creates a new $4 billion unfunded mandate for Arizona taxpayers over its first seven years.
“Our country cannot manage the entitlements of Medicare and Medicaid programs as they currently exist. This legislation only exacerbates the problem,” Brewer said in a prepared statement. “If Senate Democrats wish to expand coverage, they should be honest and pay for it – not push the cost responsibilities to the state.”
As one of six states that have already expanded Medicaid coverage, Arizona will be further punished, Brewer says, by not receiving the same level of support as states that did not expand their coverage. She estimates that inequity will cost the state $15 billion.