ARIZONA STATE SENATE
Phoenix, Arizona
Purpose
Continues, beginning September 30, 2001, the Arizona Health Care Cost Containment System (AHCCCS) premium sharing demonstration project as a permanent, statewide program and appropriates $28 million annually from the medically needy account in the tobacco tax and health care fund for the program.
Background
Laws 1996, Chapter 368 created a three-year premium sharing program to provide uninsured individuals access to health care insurance. The legislation also established the AHCCCS Premium Sharing Demonstration Project Implementation Committee to make recommendations regarding eligibility, cost sharing and a services package for the program.
The Legislature adopted the Committee’s recommendations (Laws 1997, Chapter 186), enabling the AHCCCS administration to establish the program in four counties for low income families who do not qualify for AHCCCS, but who have a household income of less than 200 percent of the federal poverty level (FPL), to obtain low cost health insurance. The program is also authorized to enroll 200 chronically ill individuals who have been enrolled in the Medically Needy/Medically Indigent (MN/MI) program for 12 consecutive months preceding enrollment and whose incomes do not exceed 400 percent FPL. (The MN/MI program is being phased out due to Proposition 204.)
The program was implemented on February 1, 1998 in Cochise, Maricopa, Pima and Pinal counties and is supported by $20 million of tobacco tax revenue in each of the program’s three years. As of March 3, 2001, 7,596 individuals from almost 5,650 households were enrolled with the program, including 169 chronically ill persons under 200 percent FPL and 14 between 200 and 400 percent FPL. The administration estimates the program could serve between 5,000 and 7,000 individuals based on current capitation rates, and receives a high level of interest in the program from constituents in counties other than the four selected for the program, such as Coconino, Yavapai and Yuma. H.B. 2585 continues and expands the demonstration project as the premium sharing program (PSP) on a permanent, statewide basis. In addition, the bill requires AHCCCS to seek a waiver from the U.S. Health Care Financing Administration (HCFA) to provide coverage to parents of children who are eligible for the children’s health insurance program (CHIP). If approved, the administration estimates – at an 80 percent presentation rate – 25,000 to 26,000 parents could receive coverage under the waiver.
Provisions
1. Continues and expands, beginning September 30, 2001, the premium sharing demonstration project as the PSP on a permanent, statewide basis.
2. Increases, from 200 percent FPL to 250 percent FPL, the income eligibility threshold for persons who do not have a specific chronic disease.
3. Increases the cap on the premium from four percent to six percent of the enrollee’s household gross income.
4. Eliminates the requirement of PSP to use Healthcare Group (HCG) health plans.
5. Appropriates, beginning on July 1, 2001, $28 million annually from the medically needy account to AHCCCS for PSP.
6. Expands the source of monies for the premium sharing program fund to include tobacco litigation settlement monies that are designated for the program.
7. Requires the administration to use up to one-half of one percent ($140,000) of the annual appropriation on marketing and outreach.
8. Requires the administration to request a waiver from HCFA to provide coverage to parents of children who are eligible for CHIP.
9. Requires AHCCCS to use PSP monies to pay for the state’s share of coverage for CHIP parents.
10. Requires the AHCCCS Director to establish a uniform application and eligibility process and coordinate screening for PSP, HCG and CHIP.
11. Requires the administration to establish copayments for services. Maintains current enrollee copayments until November 15, 2001.
12. Requires the administration to define “chronic disease”. Maintains the current definition for “chronic disease” until the administration adopts a definition.
13. Continues the Premium Sharing Program Oversight Committee and the semiannual reporting requirement regarding the implementation and operation of PSP.
14. Exempts the administration from the rule making process for one year to implement PSP.
15. Requires the administration to report to the Premium Sharing Program Oversight Committee and conduct at least two public hearings before adopting the rules.
16. Requires the administration to publish adopted rules.
17. Terminates PSP on July 1, 2010.
18. Repeals the definition of “chronic disease” on November 15, 2001.
19. Makes numerous conforming and technical changes.
20. Provides for a general effective date, except as noted.
House Action
Health 2/19/01 DPA 10-0
Approp 2/27/01 DPA 12-3-0-1
3rd Read 3/14/01 47-7-6
Prepared by Senate Staff
March 30, 2001