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The Associated Press April 21, 2010, 3:32PM ET

Ariz. lawmakers weigh reversing health budget cuts

A program providing health care to thousands of children would be saved from elimination and 310,000 low-income people would remain eligible for Medicaid coverage for at least six more months under new legislation endorsed Wednesday by an Arizona House committee.

The House Human and Health Services Committee unanimously approved the bill as lawmakers winding up the legislative session take up unfinished business related to the state budget and the federal health care overhaul.

The bill conditionally appropriates nearly $400 million to prevent the June 15 repeal of the KidsCare health care program for children and to reverse the planned Dec. 31 cut of roughly a quarter of the enrollment in Arizona's Medicaid program, the Arizona Health Cost Containment System.

At the urging of Gov. Jan Brewer, the Legislature in March included both cuts in the new state budget to help close a projected $2.6 billion deficit.

However, state officials swiftly concluded that Arizona needs to undo both cuts to remain eligible for its entire Medicaid funding under terms of the federal health care overhaul.

Under the new bill, KidsCare would be reauthorized outright at a state cost of $9 million. However, reversal of the AHCCCS eligibility reduction, at a cost $385 million, would require the state to getting additional federal funding expected under a proposed congressional extension of part of the federal stimulus program.

"This is a temporary fix," said Rep. Ted Vogt, R-Tucson. "We still need to keep addressing the structural deficit in our budget."

Gilbert resident Susan Stewart praised the KidsCare extension, saying the program provides vital medical monitoring for her 13-year-old son's potentially deadly heart condition.

Stewart said her employer can't afford to provide her with health coverage, her income is too much for AHCCCS eligibility, and she cannot a private health-insurance policy.

"I'm paying taxes. I'm working. I'm doing the best that I can do, but KidsCare is my only option," she said. "I'm pleading with you to restore KidsCare."

The bill now goes to the full House following a legal review and party caucus discussions.

While praising the reinstatement of KidsCare, program supporters said the Legislature should also lift an enrollment freeze that has kept children from being added since Jan. 1.

Rep. Nancy Barto, a Phoenix Republican who is the health committee's chairman, the state's budget troubles won't permit lifting the cap before lawmakers re-evaluate the state's finances in 2010.

But for the time being, Arizona has no choice but to keep KidsCare to remain eligible for $7.8 billion of Medicaid funding, Barto said.

"The federal government has created the scenario where we are obligated to restore kids at this time," she said.

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