Arizona Health Care Cost Containment System (AHCCCS) CARE Program

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Governor Doug Ducey announced the AHCCCS CARE program, his plan to modernize AHCCCS, Arizona’s Medicaid program. Eligible members would make contributions to an account, similar to a health savings account, that could be used for services not currently covered by Medicaid. AHCCCS Director Tom Betlach will talk about the program.

JOSE CARDENAS: Good evening. I'm Jose Cardenas. We'll talk to the director of Arizona's Medicaid program about Governor Ducey's plan to modernize Arizona's AHCCCS program. And a discussion about a film and art exhibition exploring the work of international photographer Pedro E. Guerrero. All this coming up on "Horizonte."

VIDEO: Funding for "Horizonte" is made possible by contributions by the Friends of Eight, members of your Arizona PBS station.

JOSE CARDENAS: Thank you for joining us. Governor Doug Ducey announced a new program as part of the Arizona Healthcare Cost Containment System known as AHCCS. The new program is called AHCCS Care. Eligible members would make contributions to an account, similar to a health savings account, that could be used for services not currently covered by Medicaid, including vision and dental. Joining me now to talk about the program and other Medicaid related topics is Tom Betlach, director of AHCCS. Tom, welcome to "Horizonte."

TOM BETLACH: Good evening.

JOSE CARDENAS: Give us just a thumb nail sketch of the history of AHCCS. I know Arizona was the pioneer with AHCCS, a lot of other states now have it, but tell us how it got started and what it covers.

TOM BETLACH: So the AHCCS program was established in 1982, Arizona was the last state into the Medicaid system so 17 years after the establishment of the Medicaid program. Currently, we provide coverage for--

JOSE CARDENAS: But we decided to do it different than it had been done.

TOM BETLACH: Yes, without a doubt. So at that point in time there were leaders that wanted to have a mandatory managed care program, meaning we would in essence contract with insurance companies who would work with providers and members and provide the services. And so we leveraged at that point in time a creative way to do that through what's known as an 11:15 waiver and it just simply references a federal section of law that provides the secretary of health and human services with some flexibility to allow states to do things different than what's required within regulation.

JOSE CARDENAS: And we're taking advantage of that again with AHCCS care. This is another creative attempt to deal with this issue.

TOM BETLACH: It is. So AHCCS has evolved over time. We now provide coverage to 1.8 million Arizonans. It's the largest insurance program in the state of Arizona, about $11 billion a year. We provide coverage for 50% of the nurses, two thirds of the nursing facility days and a lot of healthcare in between. One of the changes we've seen in Medicaid has been the growth of the program where historically, it provided coverage for children, pregnant women, elderly and the disabled, and now 50% of the AHCCS population, because of program changes is between the ages of 19 and 64. So we've got a lot of adults in the program that historically, were not covered by the AHCCS program.

JOSE CARDENAS: And one of those big program changes occurred a couple of years ago when the governor proposed an expansion to take advantage of some provisions in federal law that allowed us to do that?

TOM BETLACH: Yeah, back in 2013, then-governor Brewer went to the legislature and said she wanted to restore coverage and then also expand coverage for the adult population. And so that started on January 1st, 2014. There's been some ongoing litigation around the legislation that created that restoration and expansion, but since that point in time, since January 1st, 2014, we've had about 450,000 individuals come on to the AHCCS program. So we are now at that 1.8 million park.

JOSE CARDENAS: And AHCCS cares is designed to help people take advantage of some of those additional benefits?

TOM BETLACH: AHCCS cares, I think the evolution of the Medicaid program here in Arizona, I mentioned 50% of the population is between the ages of 19 and 64, and AHCCS and Medicaid in general has done a good job in terms of creating programs for newborns where we try to reduce low birth weight babies and help moms with prenatal care and we've done a lot in terms of the elderly and providing home and community based services so people don't have to go into nursing facilities. We need to look at opportunities to create programs for the adults in the 19 to 64-year-old range and create some incentives. So one of the opportunities we're pursuing through the 1115 is to create the health savings account so that individuals that are contributing an amount, a small amount, 3% of their income for a premium, can use that funding for things like dental services and vision, other services that are not covered by the AHCCS program.

JOSE CARDENAS: Now, this is a proposal, right? You're working on it right now, asking for comments?

TOM BETLACH: We are. We've had a number of public forums. We have a website, www.azahccs.gov in which we're taking public comments from members, family members, providers, interested stakeholders in the community. We really want to see some public input on the proposal. We'll be submitting a formal package to the federal government, centers for Medicare and Medicaid services on October 1st of 2015. And then we'll be negotiating that project over the next year. The waiver that we currently have, the waiver expires on September 30th of 2016, so we need to get a new waiver in place on October 1st of 2016, and that will include pieces of the governor's package along with other items that we have before the public at this point in time.

JOSE CARDENAS: So you said you've been holding hearings, you've been getting comments and stuff. What are you hearing? Are there things that are of particular concern to the people that you've been hearing from?

TOM BETLACH: We've heard a lot of people that support this package, really when you look at some of the other states that have expanded their Medicaid system, they've made the acknowledgment that we need to do more in terms of engaging the adult population so many stakeholders have identified support of that. As it relates to concerns, we've had some folks express concerns about some of the nominal copays and the premium dollars and whether or not individuals that are low-income can afford that but again, we're trying to create positive incentives where we want individuals to get preventative treatment, we want individuals to be able to connect to some of the infrastructure that's out there for job support and things like that. And then at the end of the day we want to create these health savings accounts that individuals can use to cover services and help reduce copay costs in the future.

JOSE CARDENAS: And part of the money they'll have for that is because they're saving on premium costs?

TOM BETLACH: That's their savings that they're putting into the program, exactly.

JOSE CARDENAS: So if we see this it will be a year from you? Your predictions on whether it's going to happen?

TOM BETLACH: We'll have a lot of discussions with the federal government but I think the vast majority of what the governor has proposed will be in a final package.

JOSE CARDENAS: Tom Betlach, director of AHCCS, thank you for joining us on "Horizonte" to talk about this. Good to have you.

Tom Betlach: AHCCCS Director

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