State Capitol News
4:08 pm
Mon March 22, 2010

Provisions in new budget may endanger federal aid

Phoenix, AZ – The new state budget saves money by eliminating the Kids Care
program which provides nearly free health insurance to the
children of the working poor. It's funded with a 3-1 match of
federal Medicaid dollars. But lawmakers said the state couldn't
afford its $22 million share. It now turns out a provision in the
new federal health care legislation says states must maintain
their Medicaid programs at current levels or forfeit all future
federal health care aid. Rep. Kyrsten Sinema said she and other
Democrats want the Republicans who control the Legislature to
reopen the budget to restore the program, known by its federal
name of S-CHIP.

(The failure to restore the funding for Kids Care and the failure
to restore the authority for Kids Care will jeopardize all $7
billion of our annual Medicaid dollars. So I want to be clear: It
doesn't mean that we're just going to lose our 3-1 match for
CHIP. We will forfeit all federal Medicaid dollars for everything
and we will still be obligated to provide care for those
federally mandated populations under Medicaid.)

The Democrats say the state can generate enough simply by
imposing the state sales tax on extended warranties for
everything from cars to appliances. But that move will take a
two-thirds vote. There is no response yet from Republican
leaders. For Arizona Public Radio this is Howard Fischer.