Arizona Budget Eliminates Children’s Health Insurance Program - March 31, 2010

On March 18, Arizona Governor Jan Brewer signed a budget that terminates the state’s Children’s Health Insurance Program (“CHIP”), KidsCare, effective June 15, eliminating coverage for the 38,000 children currently enrolled in the program. In a recent letter to the governor, however, Thomas Betlach, director of the Arizona Health Care Cost Containment System, which oversees KidsCare, states that the decision will violate the recently-enacted federal health care reform law's “maintenance of effort” (“MOE”) requirement. Under MOE requirements, as a condition of receiving federal Medicaid matching funds, states must maintain CHIP eligibility levels in effect as of March 23, 2010, the date of the bill's enactment, through 2019. As a result, Arizona may be at risk of losing federal Medicaid funds unless the program is restored to its current level.