Follow-up questions and answers to the Interim Committee on Statutory Funding Formulas: health and welfare funding formulas

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Follow- Up Questions and Answers
to the Interim Committee on
Statutory Funding Formulas
Health and Welfare Funding Formulas
Prepared by
The Staff of the
Joint Legislative Budget Committee
-
August 25, 1993
Joint Legislative Budget Committee
Staff Memorandum
DATE: August 25, 1993
TO: Members of the Interim Committee on Statutory Funding Formulas
FROM: Staff of the Joint Legislative Budget Committee
SUBJECT: HEALTH AND WELFARE FUNDING FORMULA OPTIONS
At the request of the Chairmen, the JLBC Staff has prepared a list of possible options for
revising health and welfare statutory funding formulas. The list is not intended to be
exhaustive, but it does present a range of options for modifying the statutory funding
formulas.
We would note several caveats:
1) Savingslcosts are General Fund estimates based on FY 1994
appropriation levels. Caseload and federal participation
assumptions are still being developed for FY 1995.
2) Savingslcosts are based on full- year savings. These amounts
may need to be revised based on implementation delays, which
may include the time required to receive a federal waiver.
3) Savings/ costs of the various options are not necessarily additive,
may affect the savings of other programs, or may be mutually
exclusive.
Due to the above caveats, additional analysis would be required if one or more of these
options are to be pursued during the 1994 legislative session. Background on
benefitslservices and population can be found in the " Health and Welfare Funding Formulas"
report of July 21, 1993.
If there are questions, please call us at 542- 5491.
MS: ss
Attachment
xc: Ted Ferris, Director
OPTIONS TO REVISE HEALTH AND WELFARE FUNDING FORMULAS
for those already enrolled.
Calculate benefits based on no more Assumes a 35 % turnover rate within the current
than 2 children, for new recipients
te inflation indexing of AFDC
AGENCY/
PROGRAM
AFDC
AFDC
General
Assistance
General
Assistance
General
Assistance
Adoption Services
SAVINGS/
( COST) 1'
$ 15.3 million
$ 1.2 million
$ 7.3 million
$ 1.5 million
$ 15.4 million
Undetermined
OPTION
Adjust payment to standard in effect
prior to 619 1.
Establish a flat AFDC grant of $ 347
per month regardless of family size.
I . I--=-
To conform with SSI, increase from
30 days to one year the period that a
disability must be expected to persist
in order to qualify for benefits.
Eliminate alcohol/ drug abuse as a
qualifying disability.
Eliminate the program.
Cap medical payments, or use a means
test to determine the amount of the
payment.
COMMENTS
Changes maximum benefit for a family of 3 from $ 347
to $ 293. Would reduce caseload by 1,400 recipients as
financial eligibility would be lower.
Based on a family of 3, approximately 30% of the
caseload would have their grants reduced and 40%
would have their benefits increased.
Would reduce caseload by 45 %, or 4,050 recipients.
To avoid possible legal issues of " grandfathering", the
state may need to eliminate the existing program and
establish a new benefit program.
Would reduce caseload by 9 % , or 8 10 recipients.
Would eliminate estimated caseload of 9,000 recipients.
DES covers the medical cost once it is established that
the child has a pre- existing condition which will need
treatment or surgery.
i
FEDERAL
WAIVER
REQUIRED
No
Yes
I ._
No
No
No
No
AHCCCS
Acute Care
Acute Care
No
No
Limit the scope of MNIMI services
and the length of eligibility, require a
sliding fee scale/ deductibles, or
increase assets standards and
copayments .
Parallel federal eligibility standards by
limiting coverage in state- only
programs to pregnant women and
children.
Unknown
Unknown
Could shift costs to counties and private hospitals.
Savings estimates would require actuarial assistance
given the interactive effect of various programmatic
changes on capitation rates.
Policy change would follow federal eligibility standards
which focus on coverage for women and children. A
similar proposal was made for the FY 1993 budget by
the Governor at a savings of $ 80 million. Would be
cost shifting to counties and private hospitals as those
no longer covered incur uncompensated care.
' PROGRAM
Acute Care
Behavioral Health
Department of Health Services
OPTION
Change SOBRA Women and Infants
income eligibility level from 140% of
FPL to 133 % , the minimum required
by Medicaid.
Conform to current AHCCCS policy
by limiting behavioral health services
for undocumented aliens to emergency
care.
Undetermined No data available on current number of undocumented
aliens in the behavioral health system.
Behavioral Health
REQUIRED
No
Cap family income at $ 25,000 for
subvention ( 100 % state- funded) I No
-
d d ren ' s
..
Eliminates approximately 4 % of subvention costs.
Rehabilitative
This policy has been added to the current CRS rules but
is not currently in statute. Therefore, it is reinforcing
existing savings and actual marginal savings cannot be
determined.
( COST)
$ 2.4 million
eligibility.
Require 6 months residency.
r 2 j ; j 0 . / " - 7
COMMENTS
Would affect approximately 1,500 women and infants,
or 5% of the SOBRA population.
No
Actual savings
will vary based
on specific
Children's
Rehabilitative
Services
- 11 FY 1994 Estimates only. Estimates do not reflect annualization or phased- in implementation. Exact savings may also vary, if more than one option is chosen.
Require an income- based deductible
for subvention clients; require copays
for services; base services on
AHCCCS health plan treatment
modality rather than more expansive
CRS multi- disciplinary approach; limit
list of covered conditions.
No
Follow- Up Questions and Answers
to the Interim Committee on
Statutory Funding Formulas
Health and Welfare Funding Formulas
Prepared by
The Staff of the
Joint Legislative Budget Committee
August 25, 1993
Joint Legislative Budget Committee
Staff Memorandum
DATE: August 25, 1993
TO: Members of the Interim Committee on Statutory Funding Formulas
FROM: JLBC Staff
SUBJECT: FOLLOW- UP INFORMATION TO QUESTIONS ASKED AT THE JULY
21ST MEETING
The attached material provides answers to questions from the last meeting of the Interim
Committee on Statutory Funding Formulas. The following list provides those questions and
the corresponding page number of the Staff response.
Ouestion Page
1. What is the growth history of the Health and Welfare programs? . . . . . . . . . . 1
De~ artment of Economic Securitv ( DES)
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Figure 5:
Figure 6:
Figure 7:
Figure 8:
Figure 9:
Figure 10:
Aid to Families with Dependent Children . . . . . . . . . . . . . . . . . 1
General Assistance 1
Day Care 2
JOBS 2
Foster Care . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Comprehensive Medical & Dental Program 3
Adoption Services 4
Institutional Support Payments . . . . . . . . . . . . . . . . . . . . . . . 4
Supplemental Payments 5
Developmental Disabilities Long Term Care 5
Arizona Health Care Cost Containment Svstem ( AHCCCS)
Figure 11: Acute Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Department of Health Services ( DHS)
Figure 12: Behavioral Health 6
Figure 13: Children's Rehabilitative Services . . . . . . . . . . . . . . . . . . . . . 7
Figure 14: Health and Welfare Programs . . . . . . . . . . . . . . . . . . . . . . . . 7
( Continued)
Members of the Interim Committee
on Statutory Financing Formulas
August 25, 1993
Question Pace
2. Has the growth in AFDC caseload been greater in years when we have
increased benefits compared to years in which we have not? . . . . . . . . . . . 8
Figure 15: AFDC Growth
Figure 16: AFDC Caseload Rate of Growth
3. Have we ever attempted to adjust the 50 state ranking of AFDC benefits
for cost of living? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 1: Adjusted AFDC Benefit Ranking as Percentages of Average Monthly
State Pay 10
4. Do we have historical data on the average length of time a person
receives AFDC? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5. What are the federal guidelines in terms of the type of food that
can be purchased with Food Stamps?
6. Will all General Assistance recipients eventually qualify for SSI? 12
7. Who determines the child care co- payment? . . . . . . . . . . . . . . . . . . . . . . 12
Attachment A: Transitional Child Care Fee Schedule 13
8. What types of day care can be reimbursed? . . . . . . . . . . . . . . . . . . . . . . 14
9. What is the number of voluntary foster care placements? 14
10. What is the difference in monthly rates between Coolidge and a developmental
disabilities group home? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11. Can AFDC households receive WIC benefits? 15
12. Can Institutional Support payment recipients also receive ALTCS? . . . . . . . . 15
13. How does Arizona rank nationally in terms of per capita health care costs? 16
14. What is the average cost per enrollee in the AHCCCS program compared to. what
the same individual might cost in another state? Or, in other words, is the
( Continued)
Members of the Interim Committee .
on Statutory Financing Formulas
August 25, 1993
Page
AHCCCS program more or less expensive than a traditional Medicaid fee for
service program? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Attachment B: Kirschner memo dated March 10, 1993 17
15. What is the hypothetical impact of the undocumented alien proposal on county property
tax rates? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Table 2: Hypothetical Impact of AHCCCS FY 1994 Budget on County Property
Tax Rates 20
Table 3: County Impact Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1 What is the growth history of the Health and Welfare programs?
DES
AFDC
GENERAL FUND BUDGET FY 1984 TO N 1994
s ill hiilliona
Interim Committee on Statutory Funding Formulas - 1-
100.0
80.0
60.0
40.0
20.0
0.0
GENERAL ASSISTANCE
GENERAL mJND BUDGET M 1984 TO FY 1994
S in Milliona
--
--
--
-- -
I
20.0
105.500 .~ i
0.0
1984 1986 1988 1990 1992 1994
$ 1235 123.2 125.2 131.8 135.5 140.8 148.7 158.8 181.4 188.5 195.
% Chg* ( - 1 1.6 ( 7.2 135.1 151.1 173.3 1107. C( 149. t$ 246.11276.0( 304.
* Cumulative changa since FY 1984.
Figure 1
i
1984 1986 1988 1990 1992 1994
$ 1 5.9 1 5.1 1 5.7 1 7.6 1 8.9 110.0 111.7 114.0 116.7 1 17.3 115.4
% Chg* I - 1- 1261 - 3.4 129.7 151.7 1 70.8 199.4 1138.81184.81196.41163.9
Cumulative change since FY 1984.
Note: Includes savings from transfening recipients to the SSI program.
Figure 2
JOBS
GENERAL FUND BUDGET FY 1984 TO FY 1994
$ in Milliom
1984 1986 1988 1990 1992 1994
/
Cumulative change ainca FY 1991.
Figure 4
DAY CARE
GENERAL FUND BUDGET FY 1984 TO FY 1994
S in w o n #
20.0
1505.0* ~---- I
Interim Committee on Statutory Funding Fonnulas - 2-
0.0 '
1984 1986 1988 1990 1992 1994
$ ( 7.0 1 10.3 1 11.4 ( 11.7 ( 12.7 ( 15.5 1 175 ( 17.1 ( 14.9 1 14.2 1 14.0
% Chg* I - 1 485 1 63.3 1 68.0 1 83.0 ~ 122.4~ 150.6~ 145.0~ 113.9~ 103.6~ 101.1
Cumulative clungc since FV 1984.
NOW. JOBS Child CPre began in FY 1990 and Bimaitional Child Cpre ia PY 1991.
( Both programs arc fedexally mandated.)
Figure 3
FOSTER CARE
TOTAL EXPENDITURES FY 1984 TO FY 1994
S in Millions
14.0 --
6.0 1 4.0
2.0
0.0
1984 1986 1988 1990 1992 1994
$ 1 6.1 1 4.2 1 8.9 1 9.7 1 8.3 1 9.6 1 9.5 1 9.7 1 9.7 111.1 112.2
% Chg* 1 - 130.91 44.2 1 57.6 1 35.7 1 55.8 1 55.2 1 575 1 58.4 ( 80.4 1 98.4
Cnmulative change since FY 1984.
Figure 5
Interim Committee on Statutory Funding Formulas - 3-
COMPREHENSIVE MEDICAL & DENTAL PROGRAM ( CMDP)
GENEW FUND BUDGET FY 1984 TO N 1994
$ in Milliom
8.0
6.0
4.0
2.0
0.0
--
--
--
:
1984 1986 1988 1990 1992 1994
* Cumulative change since FW 1984.
Note: General Fund han been o- t by incrs~ sedfe deral funding.
Figure 6
ADOPTION SERVICES
GENERAC FUND BUDGET FY 1984 TO N 1994
$ in Millions
1984 1986 1988 1990 1992 1994
$ ( 2.4 1 3.1 1 3.6 ( 4.8 ( 7.1 1 9.2 ( 9.6 ( 10.7 1 13.0 \ 12.5 ( 12.5
% Qg* I - 1 28.6 1 49.4 ~ 101.4~ 199.0~ 283.6~ 3020~ 349.4~ 445.3~ 424.7~ 424.7
Cllmulativo change sitroe FY 1M.
Figure 7
;
Interim Committee on Statutory Funding Formulas - 4-
INSTITUTIONAL SUPPORT PAYMENTS
GENERAL FUND BUDGET FY 1984 TO FY 1994
s In Millions
1.4
1.2
1.0
0.8
0.6
0.4
<&
' i
1984 1986 1988 1990 1992 1994
$ 1 1.2 1 1.2 1 1.3 1 1.3 1 1.1 1 0.9 1 0.4 1 0.4 1 0.4 1 0.4 1 0.4
% Chg* I - 1 0.9 1 11.5 1 5.0 1 - 8.2 1- 22.51- 64.3 1- 66.21- 67.41- 64.3 1- 64.3
* Cumulattve change dnce FY 1984.
Nota: Beginning FY 1989, ALTCS dpionts did not qua14 for these payments.
Figure 8
SUPPLEMENTAL PAYMENTS
GENERAL FUND BUDGET FY 1984 TO FY 1994
$ in Millions
5.0 ::$ $
2.0 g
Interim Committee on Statutory Funding Fomtulas - 5-
1.0
DEVELOPMENTAL DISABILITIES LONG TERM CARE
GENERAL FUND BUDGET FY 1984 TO FY 1994
S in Millions
60.0
50.0
40.0
1;
30.0
20.0
10.0
0.0
1984 1986 1988 1990 1992 1994
$ 1 1.4 1 1.8 1 20 1 2.6 1 3.3 1 3.4 1 3.1 1 3.8 1 4.1 1 4.4 1 4.4
% Chg* I - 124.0 142.1 1 82.6 ) 132.0~ 139.1~ 118.6~ 167.0~ 188.6~ 212.1~ 2121
Cumulative change since FY 1984.
Note: Includea Housekeeping, Visiting Nurse, and Home Health Aide payments.
Figure 9
: r
: r
1:
0.0 '- 1
1984 1986 1988 1990 1992 1994
Cumulative change since FY 1990. the first full yuu of operation
Note: Increaaed federal reimbursement o i k t Gm4 Fund in FY 1994.
Figure 10
AHCCCS
AHCCCS - ACUTE CARE
GENERAL FUND BUDGET M 1984 TO FY 1994
S in Millions
500.0 ,
400.0 ;:
1984 1986 1988 1990 1992 1994
$ 1 93.8 ~ 118.~ 122.1) 117.~ 170.3~ 6.~ 228.~ 292.~ 380. o[ 439.4432
% Chg* I - 1 26.2 130.2 1 25.2 1 81.5 1130. d143.4211.~ 304.9( 368.4361.
* Cumulative change ainw FY 1984.
Figure 11
DHS
BEHAVIORAL HEALTH
GENERAL FVND BUDGET FY 1984 TO FY 1994
S in Millions
160.0
120.0
80.0
60.0
420.0 1 I
1984 1986 1988 1990 1992 1994
Cumulative chnnge since FY. 1984.
Note: FY 1994 will probably require supplemental funding.
Figure 12
$ 1 37.0 135.8 149.3 / 57.5 1 60.9 178.4 1 98.8 ~ 1043] 133.~ 146.81141.
% Chg* / - 1 - 3.4 / 33.2 155.3 164.4 1111.~ 167.0/ 181.8j259.91296.5~ 283.
Interim Commiffee on Statutory Funding Formulas - 6-
SUMMARY
CHILDREN'S REHABILITATIVE SERVICES
GENERAL FUND BUDGET FY 1984 TO FY 1994
S in Millions
HEALTH AND WELFARE PROGRAMS
GENERAL FUND BUDGET N 1984 TO N 1994
$ in Millions
1, ooo -
800 --
600 --
400 --
0 I I I I I I I I
1984 1986 1988 1990 1992 1994
Figure 14
20.0
15.0
10.0
5.0 ;:
0.0
Interim Committee on Statutory Funding Formulas - 7-
--
--
-- <
I
1984 1986 1988 1990 1992 1994
$ / 2.4 1 2.6 1 3.9 / 3.8 1 5.3 1 5.9 / 5.3 1 5.8 / 15.3 117.3 116.7
% Chg* I - 1 5.8 160.6 156.6 ~ 117.7~ 139.0~ 116.1/ 138.3/ 525.1~ 606.3~ 581.8
Cumulative change since FY 1984.
Figure 13
2. Has the growth in AFDC caseload been greater in years when we have increased
benefits compared to years in which we have not?
AFDC GROWTH
FY 1989 TO FY 1993
Recipients ( Thousands)
200 __
Vertical linrs
180 1: represent
benefit
160 --: increases
I I I - - I I I ! I I I i I I I I I I I M
7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7
19881 1989 1 1990 1 1991 1 1992 11993
Monthpear
Note: Dates of benefit increases are 6/ 91, 7/ 91, and 7/ 92.
Figure 15
AFDC CASELOAD RATE OF GROWTH
ANNUALIZED MONTHLY CHANGES FROM
AUGUST 1989 TO JUNE 1993
Percentage Change
120.0
100.0 represent
80.0
incrorses
60.0
40.0
20.0
0.0
- 20.0
- 40.0
7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7
19881 1989 1 1990 1 1991 1 1992 11993
Monthryear
Note: Dates of benefit increases are 6191,7/ 91, and 7/ 92.
Figure 16
Interim Committee on Stdutory Funding Formulas - 8-
3. Have we ever attempted to adjust the 50 state ranking of AFDC benefits for cost of
living?
We have not been able to adjust this ranking by cost of living, nor have we been able to
locate any such adjustment. Cost of living indices are typically calculated for selected,
major metropolitan areas, whereas AFDC rankings are often tabulated as state averages.
In attempting to compare apples to apples, we have adjusted state AFDC benefits as
percentages of average monthly state pay. In doing so, we have made the assumption
that a state's cost of living is reflected in its average monthly pay.
For FY 1993, Arizona ranked 31st nationally in unadjusted, maximum AFDC benefits
for a three- person family. However, when calculating this AFDC benefit as a percentage
of average monthly state pay, Arizona ranks 28th ( see Table 1).
Interim Committee on Statutory Funding Formulas - 9-
Table 1
ADJUSTED AFDC BENFTIT RANKING AS
PERCENTAGES OF AVERAGE MON'IRLY STATE PAY
Alaska
Hawaii
Rhode Island
Wisconsin
South Dakota
Washington
California
Minnesota
C O M ~ C ~ ~ C U ~
Stnte
North Dakota
New Hnmpsh~ re
Maine
Iowa
Montnna
Massnchusettv
Oregon
Kunhuh
Utllh
Nebraska
Mlchigan ( Ann Arbor)
Wyoming
Penn.. y lvunia
New York ( New York City)
Okluholnn
Iduho
Vermont 37.03% 1 $ 1.780 32 $ 659 4
AFDC Benefit Adjusted
As Percentage of Average
Monthly Stnte Pay RANK
New Mexico 19.18% 27 $ 1,690 42 $ 324 35
Arizona 18.75% 28 $ 1,851 26 $ 347 31
Nevndn 18.09% 29 $ 1.924 21 $ 348 30
Virginia
Colomdo
Ohio
New Jersey
Mary land
Florida
Deluwure
Missouri
North Carolina
Indiunu
Illinois
tirorgia
West Virginia
Kentucky
Arksnsus
Soutll C: urolina
Louis~ ana
'~'~ MCSSC~:
Texw
Alnbruna
Mississ~ pp~
1991 Average
Monthly Stnte
Pny RANK
FY 1993
Unadjusted AFDC
Monthly Benefit RANK
4. Do we have historical data on the average length of time a person receives AFDC?
The only available data are national averages from the 1992 Green Book, Committee on
Ways and Means, U. S. House of Representatives. The following data, however, may
understate long- term welfare dependence since it measures only the current period of
AFDC eligibility. About one- third of all recipients will leave the program and then re-enter
at a later date.
Median
Months23.0 27.0 31.0 29.0 26.0 27.0 26.3 24.9 23.0
The only historical data for Arizona is that recipients on the program for more than 1
year increased from 59% in 1984 to 65% in 1990. More discrete time periods from
these two DES studies are not comparable. Based on active cases as of May 1993, DES
indicates that the number is currently 58 % .
5. What are the federal guidelines in terms of the type of food that can be purchased
with Food Stamps?
Federal guidelines define what foods are eligible to be purchased with Food Stamps. All
food or food products that are for human consumption are eligible items. Food products
that can be purchased include:
vegetable seeds, food- producing plants, roots, and trees;
" health foods" such as wheat germ, brewers yeast, sunflower seeds, rose hips powder,
and enriched or fortified foods;
infant formula, diabetic or dietetic foods;
deposits on returnable bottles or containers;
distilled water and ice;
items used in the preparation and preservation of food such as spices, herbs,
shortening; and
snack foods such as candy, potato chips, chewing gum and soft drinks.
Items not eligible are alcoholic beverages. tobacco, and hot foods and hot foods prepared
for immediate consumption.
Food stamps may be used as payment to authorized organizations that prepare and serve
meals to:
- elderly or disabled food stamps recipients;
- eligible recipients in a substance abuse treatment and rehabilitation center;
- eligible recipients in a shelter for battered women and children;
Interim Committee on Statutory Funding Formulas
- eligible homeless food stamp households in a facility that feeds homeless clients; and
- blind or disabled recipients who receive benefits under either Title I, 11, X, XIV, or
XVI of the Social Security Act who are in a group living facility.
6. Will all General Assistance recipients eventually qualify for SSI?
No, not all General Assistance ( GA) recipients are eligible for SSI. Only GA recipients
with a long- term disability may be SSI- eligible. To be SSI- eligible, a disability must be
expected to result in death, or be expected to last for a continuous period of 12 months
or more. The physical or mental disability must make the person unable to perform his
previous work or any other substantial gainful employment. General Assistance requires
only 30 days of continuous disability.
7. Who determines the child care co- payment?
The DES Child Care Administration staff determines co- payment amounts for those
federal programs requiring parental co- payments. Of the 5 federal child care programs,
3 require co- payments: Transitional, At- Risk and CCDBG. For these programs, the
amount of the co- payment is determined by family size and gross income. DES has
attempted to limit the co- payment to approximately 5 % to 10% of a family's monthly
gross income for a typical family consisting of 2 children and 1 parent.
The State Child Care Subsidy does not require a co- payment. However, the state subsidy
does not completely cover day care expenses. Parents pay the difference between the full
cost and the subsidy amount to their provider.
Transitional Child Care CCC) - All clients are required to make a co- payment.
Federal regulations allow states to establish fee schedules and while encouraging
" meaningful contributions" the regulations recognize that families with the lowest income
levels might contribute " no more than a token amount. " While the TCC fee schedule has
5 levels, the vast majority of families have incomes in the lowest bracket ( see the TCC
Fee Schedule, Attachment A). The maximum monthly co- payment range for full day
child care services for one child would be $ 21.67 to $ 108.35 depending upon the family
size and gross monthly income.
At- Risk and CCDBG - Federal regulations require a sliding fee schedule and allow states
to establish co- payment amounts. An exception is allowed under CCDBG. If families
fall below the federal poverty level ( includes all CCDBG eligible families in Arizona),
the co- payment may be waived. DES does not waive the co- payment. Due to federal
requirements to aid the poorest families and limited resources, the upper income
eligibility for both At- Risk and CCDBG correspond to the first income bracket and
associated co- payment levels of the TCC Fee Schedule. The maximum monthly co-payment
required for one child receiving full day child care services would be $ 21.67.
Interim Committee on Stalutory Funding Formulas - 12-
Attachment A
8. What types of day care can be reimbursed?
DES through the State Day Care subsidy program may provide reimbursement to DHS
licensed child care centers, public school child care programs, and certified homes. The
federal child care programs allow payments to non- certified relatives as well as to the
licensed and certified entities, and public schools. For the Transitional, JOBS, and At-
Risk programs all providers, even relatives, must meet applicable standards of state and
local law. For these 3 programs, the provider may not be a member of the Eligible
Family's AFDC Assistance Unit or a member of the Eligible Family Unit. The CCDBG
requirements exempt relative providers from meeting health and safety requirements.
Non- certified relative providers may include an adult who is an aunt or uncle ( natural,
adoptive, or in- law), grandparent ( natural, step, adoptive) or an adult sibling ( natural,
step, or adoptive) of the child needing care. Non- certified relative providers are paid
rates up to 90 % of the certified family child care market based rates for each geographic
area.
Non- certified relative providers are required to:
1. Be at least 18 years of age.
2. Be fingerprinted and registered in accordance with A. R. S . 5 46- 171. The provider
is responsible for payment of current FBI search fee at time fingerprinting is
accomplished.
3. Provide child care that is in accordance with state statutes ( no more than 4 children
for whom the provider receives compensation without being regulated by the DHS)
or tribal standards.
4. Maintain current emergency information on the family.
5. Maintain billing, payment, and attendance records for five years.
6. Collect the appropriate co- payments from the family.
7. Have a signed registration agreement with the DES which requires information
necessary to make payment to the provider, such as name, address, social security
number, and provider number.
9. What is the number of voluntary foster care placements?
The estimated monthly average of voluntary foster care placements in FY 1993 is 122
out of 2,804 estimated monthly average foster care placements. For FY 1993, voluntary
placements were 4.4 % of all placements.
Voluntary foster care placement is an agreement between DES and written consent of a
parent, guardian or custodian, and the child, if over 12 years of age and not
developmentally disabled, to place a child in foster care. Placement is limited to 90 days
with no more than 2 non- consecutive 90- day periods allowed within a 2 year time frame.
Interim Committee on Statutory Funding Formulas - 14-
A voluntary placement is based upon the parent( s)' willingness and ability to make
sufficient progress within the voluntary placement timeframe and placement is necessary
for the protection of the child.
10. What is the difference in monthly rates between Coolidge and a developmental
disabilities group home?
The Arizona Training Program at Coolidge ( ATPC) has 2 levels of placement. The table
below contrasts the costs of ATPC with the average cost for a group home operated by
a private vendor.
Group Home
Coolidge Private Vendor
$ 2,833,91 $ 2,499.43
Intermediate Care Facility $ 8,270.41 NIA
The Group Home rates do not include the cost of Day Programs or individual therapies.
Non- employment related Day Programs average $ 510.44 per month and employment
related Day Programs average $ 349.62 per month. The Intermediate Care Facility rate
includes the cost of all services.
11. Can AFDC households receive WIC benefits?
Yes, pregnant, postpartum, and breast- feeding women, infants, and young children who
are members of an AFDC- eligible household are eligible for WIC benefits. WIC
payments or benefits are disregarded as income in determining AFDC eligibility and
payments.
At this time, neither DES nor DHS can estimate the number of WIC clients who also
receive AFDC benefits. However, DHS is currently enhancing its existing management
information system which should enable it to access this information in the future.
12. Can Institutional Support payment recipients also receive ALTCS?
Institutional Support recipients are not eligible for ALTCS. It was assumed with the
implementation of the federal long term care program ( ALTCS) that all elderly and
disabled clients in private and public nursing homes would qualify for the ALTCS. Laws
1988, Chapter 302, disqualified any nursing home resident who receives Title XIX long
term care services from receiving Institutional Support payments.
Recent data show that there are no public nursing home clients. However, there are still
4 clients who receive private nursing home payments, because they do not meet the
ALTCS's programmatic criteria. Clients in Supervisory Care Homes are not ALTCS
Interim ~ ommifieeo n Stafutory Funding Formulas - 15-
eligible because this level of care is not reimbursed by ALTCS.
13. How does Arizona rank nationally in terms of per capita health care costs?
The Staff contacted the federal Congressional Budget Office and obtained information
that is somewhat dated but is all that is currently available. The latest national data on
health care expenditures by state was collected in 1982 by the federal Health Care
Financing Administration. In 1990, a consulting fm used that data and made
projections for what those expenditures might be in 1990. Based on these projections,
Arizona ranked 33rd in the nation in per capita health care expenditures, with
annual expenditures of $ 2,211 per person. The highest ranked state was Massachusetts
with per capita expenditures of $ 3,031, while the lowest ranked state, South Carolina,
had per capita expenditures of $ 1,689.
14. What is the average cost per enrollee in the AHCCCS program compared to what
the same individual might , cost in another state? Or, in other words, is the
AHCCCS program more or less expensive than a traditional Medicaid fee for service
program?
According to a memorandum transmitted to the Legislature in March 1993 by Dr.
Leonard Kirschner, Director of AHCCCS, the AHCCCS program has proven to be less
costly than a traditional fee for service Medicaid program, based on a federal study that
compared Arizona to 20 other states. The memo ( Attachment B) indicates that for FY
1990, the AHCCCS program saved the state 10.2% over what would have been spent
had Arizona had a fee for service system and not managed care. Further, Dr.
Kirschner states that the AHCCCS program has been more successful than other states
in controlling the rate of growth in medical care costs, holding the rate of growth over
the period of FY 1983 to FY 1990 to 69.2 % , compared to the 113.3 % increase in other
states for the same period.
Based on this federal study and earlier similar studies, it appears that at least for the
federal eligibility groups analyzed, AHCCCS delivers care at a lower cost. These
analyses did not, however, examine the state- only populations, such as the MNIMI. The
Staff is unaware of any studies on the average medical care cost of groups like the
MNIMI in other states, so we are unable to offer any comparison data. Federal
standards imposed on states' regarding care for federally eligible members have
established some continuity among the states and make comparisons more useful.
However, from our past research, it appears that state funded indigent health care
programs vary dramatically by the types of people served and the scope of services,
making comparisons somewhat difficult.
Interim Committee on Statutory Funding Fomulas - 1 6-
Attachment B
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
FIFE SYMINGTON
Governor
LEONARD J. KIRSCHNER. M. D. ,. M. P. H
M E M O R A N D U M
TO: Members of the Arizona Legislature
. . , FROM: Leonard J. Kirschner, M. D., M. P. H., Director - 7k
SUBJECF AHCCCS ACUTE CARE PROGRAM COSTS COMPARED TO
TRADITIONAL MEDICAID PROGRAMS
DATE: March 10, 1993
There are 56 Medicaid programs operational in the 50 states, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Marianas and American
Samoa. AHCCCS is unique among these programs because it is the only one functioning
as a statewide, managed care demonstration project under waiver authority approved by the
Secretary of Health and Human Services. Because of this status the AHCCCS program has
been monitored continually by the Health Care Financing Administration ( HCFA). I
recently received the latest evaluation of our program from HCFA in a draft report dated
January 1993. With the concurrence of HCFA, I would like to share some of the cost
evaluations in this report.
Health care is an expensive enterprise in modern America. That fact is the main
reason for the raging debate about health care reform. As AHCCCS' covered population
has increased over the past six years from 175,000 to almost 500,000 Arizona residents, the
aggregate costs have increased dramatically and understandably have caused policy makers
to question the fiscal impact of this program. Aggregate costs are driven by population
increase, but the key to evaluating the AHCCCS program is to compare changes in per
capita costs. The current draft report does just that.
The HCFA evaluators have used the Medicaid experiences of 20 states as a bench
mark to compare the AHCCCS results. Those states are Alabama, Arkansas, California,
Florida, Georgia, Iowa, Louisiana, Maine, Michigan, Mississippi, Montana, New Jersey, New
Mexico, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, West Virginia and
Wisconsin. The report states that: " AHCCCS continued to experience lower costs than the
801 East Jefferson . Phoenix. Arizona 85034 . ( 602) 234- 3655
P. O. Box 25520 . Phoenix. Arlzona 85002
Atrachment B ( Cont.)
Memo to Members of the Arizona Legislature
March 10, 1993
Page 2
estimated cost for a traditional Medicaid program in Arizona. From the program
perspective, AHCCCS' costs were lower than traditional program costs for both FY 90 and
FY 91. In addition to the generally favorable cost experience, AHCCCS was successful in
containing cost increases below those experienced in the comparison states."
For FY 90 the cost of medical senices for the categorically eligible members of the
AHCCCS program would have been $ 27 million more if a traditional fee- for- service system
were in place in Arizona. This is an estimated savings of 10.2 percent. For FY 91 the
estimated savings are $ 70.7 million, or 18.9 percent of the cost of a traditional program.
Both the Federal government and Arizona share in the cost savings. For N 90, HCFA
savings were $ 19 million while Arizona's savings were $ 8 million. For FY 91, HCFA savings
were $ 43.6 million while Arizona's savings were $ 27.1 million.
It must be pointed out that the administrative cost of the AHCCCS program is higher
than the average administrative cost in the 20 comparison states. That is understandable
because a managed care system by its very nature uses administrative services to control
program expenditures, while a state that simply processes claims has lower overhead. When
you look at total expenditures, both program and administrative, the total savings for the
two fiscal years evaluated in this report are $ 67.5 million.
To quote from the report, " Since the beginning of the program, FY 83 to FY 91,
AHCCCS' average per capita costs increased 69.2% while the average per capita cost in the
comparison states increased 113.3%, a reduction of 44.1% in the rate of increase. For the
period from N 83 to N 91, the average annual increase in AHCCCS per capita cost was
6.8%, compared to 9.9% for a traditional Medicaid program in Arizona."
The bottom line is that AHCCCS is providing quality health care at a substantial
savings to the taxpayer. If you would like further information on this report please feel free
to contact me.
What is the hypothetical impact of the undocumented alien proposal on county
property tax rates?
For a county by county assessment of the impact of the recent AHCCCS Acute Care
budget changes, please refer to the attached Table 2 labeled " Hypothetical Impact of
AHCCCS FY 1994 Budget on County Property Tax Rates." The estimated change in
county property tax rates assumes that all of the AHCCCS impact will be absorbed
by property taxes instead of through reductions in county budgets or funded from other
sources of revenue, such as state sales tax distributions. The Staff has not surveyed
county budget officials to determine if adjustments have in fact been made to
property tax rates to accommodate the impact of the AHCCCS Acute Care budget
changes, hence our reference to the new rates as hypothetical.
The net impact of the AHCCCS FY 1994 budget agreement is displayed on Table 3
labeled " County Impact Estimate." This table was developed during negotiations on the
AHCCCS budget and reflects the net impact of the increased Acute Care contribution,
increased uncompensated care resulting from the change to provide only emergency
services coverage for undocumented aliens, and the gain to counties from additional
disproportionate share revenue.
To illustrate how the Staff developed the new hypothetical tax rates, we will use
Maricopa County as an example. From the 1993 Arizona Tax Research Association
( ATRA) publication of county assessed valuation and tax rates, we calculated the amount
of property tax generated by the county property tax rate, applied to the county's total
primary assessed value. Then, adding to that result the impact of the AHCCCS budget
changes on Maricopa County ( estimated $ 2.8 million loss), we calculated the new total
property tax Maricopa County would need to generate to cover that loss. Based on the
new total property tax needed, we then determined the new property tax rate. For
Maricopa County, the new hypothetical rate would be $ 1.6242, or an increase of $ 0.0203
( 2 cents/$ 100 of assessed value). To contrast counties falling at both ends of the range
of hypothetical changes in property tax rates, rates in Cochise County could increase
$ 0.1192 to cover the impact of the AHCCCS budget changes, while in La Paz County,
a net increase in revenue due to additional disproportionate share revenue could result
in a property tax rate reduction of $ 0.03 12.
Interim Committee on Statutory Funding Fonnulas - 1 9-
Hypothetical Impact of AHCCCS FY 1994 Budget on County Property Tax Rates
1992 Primary 1992 County Property Tax Impact of New Property Potential Rate Percent
Assessed Value \ 1 Tax Rate \ I Generated AHCCCS Chgs \ 2 Tax Required \ 3 New Rate \ 4 Change Change
Apache $ 397,282,439 $ 0.7446 $ 2,958,165 $ 108,199 $ 2,849,966 $ 0.7 174 ($ 0.0272) - 3.66%
Cochise 388,328,011 3.5909 13,944,471 ($ 462,739) $ 14,407,210 3.7101 0.1192 3.32%
Coconino 657,3 14,382 0.9785 6,431,821 ($ 78,368) $ 6,510,189 0.9904 0.01 19 1.22%
Gila 275,957,985 3.9300 10,845,149 ($ 208,770) $ 1 1,053,918 4.0057 0.0757 1.93%
Graham 59,681,813 2.4447 1,459,041 ($ 26,019) $ 1,485,060 2.4883 0.0436 1.78%
Greenlee 181,656,513 0.7080 1,286,128 $ 34,555 $ 1,25 1,573 0.6890 ( 0.0190) - 2.69%
La Paz 97,653,250 3.0020 2,93 135 1 $ 30,456 $ 2,901,094 2.9708 ( 0.0312) - 1.04%
~ Maricopa 13,605,514,589 1.6039 218,218,848 ($ 2,759,287) $ 220,978,136 1.6242 0.0203 1.26%
Moha ve 647,885,806 2.2791 14,765,965 ($ 66,458) $ 14,832,424 2.2894 0.0103 0.45 %
Navajo 499,969,710 0.9546 4,772,7 1 1 $ 20,455 $ 4,752,256 0.9505 ( 0.0041) - 0.43 %
Pima 2,951,177,433 4.2249 124,684,295 ($ 1,346,447) $ 126,030,742 4.2705 0.0456 1.08 %
Pinal 559,036,278 4.8816 27,289,9 15 ($ 485,954) $ 27,775,869 4.9685 0.0869 1.78%
Santa Cruz 142,417,027 2.5200 3,588,909 ($ 57,139) $ 3,646,048 2.5601 0.0401 1.59%
Yavapai 68 1,677,858 2.5720 17,532,755 ($ 94,409) $ 17,627,164 2.5858 0.0138 0.54%
Yunta 386,997,309 2.4642 9,536,388 ($ 218,905) $ 9,755,293 2.5208 0.0566 2.30%
Total 21,532,550,403 460,246,112 ( 5,610,830) 465,856,942
11 1992 Arizona Tax Research Association
21 Represents the net impact of the increased Acute Care contribution ($ 12.8 million), increased uncompensated care resulting from the undocumented alien policy
change ($ 3.6 million loss for Maricopa and Pima counties only), and additional disproportionate share funding ($ 10.8 million). See attached table for county by
county impact.
31 Represents the hypothetical level of total property tax collections necessary to cover the impact of the AHCCCS budget changes.
41 Represents the hypothetical new property tax rate necessary to cover the impact of the AHCCCS budget changes.
JLBC Staff
August 5, 1993
COUNTY IMPACT ESTIMATE
* Increased Acute Care Contribution Allocated By Current Statutory Formula*
JLBC Staff
August 5, 1993
Impact of Increased Uncomp Total Acute
FY 94 Acute Care From Increase &
Care Increase Undoc Alien Prop Uncomp Care
Apache ($ 5 1,617) $ 0 ($ 51,617)
Cochise ( 425,357) 0 ($ 425,357)
Coconino ( 142,682) 0 ($ 142,682)
Gila ( 27 1,404) 0 ($ 27 1,404)
Graham ( 102,977) 0 ($ 102,977)
Greenlee ( 36,631) 0 ($ 36,631)
La Paz ( 40,730) 0 ($ 40,730)
Maricopa ( 7,424,727) ( 2,900,000) ($ 10,324,727)
Mohave ( 237,718) 0 ($ 237,7 18)
Na vajo ( 59,686) 0 ($ 59,686)
Pima ( 2,87 1,576) ( 700,000) ($ 337 1,576)
Pinal ( 52 1,546) 0 ($ 52 1 ,546)
Santa Cruz ( 92,73 1) 0 ($ 92,731)
Yavapai ( 274,221) 0 ($ 274,221)
Yuma ( 254,497) 0 ($ 254,497)
Total ($ 12,808,100) ($ 3,600,000) ($ 16,408,100) 1
County Savings
From FY 93/ 94
Dispro Share Gain
$ 159,816
( 37,382)
64,314
62,634
76,958
71,186
71,186
7,565,440
171,260
80,141
2,225,129
35,592
35,592
179,812
35,592
1 $ 10,797,270 (
Net County
$ Impact
$ 108,199
($ 462,739)
($ 78,368)
($ 208,770)
($ 26,019)
$ 34,555
$ 30,456
($ 2,759,287)
($ 66,458)
$ 20,455
($ 1,346,447)
($ 485,954)
($ 57,139)
($ 94,409)
($ 218,905)
1 ($ 5,610,830)

Description

Rating
TITLE	Follow-up questions and answers to the Interim Committee on Statutory Funding Formulas: health and welfare funding formulas
CREATOR	Arizona. Legislature. Joint Legislative Budget Committee.
SUBJECT	Legislative Study Committee. Arizona; Health and Welfare Planning--Arizona;
Browse Topic	Government and politics
DESCRIPTION	30 pages (PDF version). File size: 1321.625 KB. From title page: "Prepared by The Staff of the Joint Legislative Budget Committee".
Language	English
Publisher	Arizona. Legislature. Joint Legislative Budget Committee.
TYPE	Text
Acquisition Note	Publication or link to publication sent to reports@lib.az.us
RIGHTS MANAGEMENT	Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.
DATE ORIGINAL	1993-08-25
Time Period	1990s (1990-1999)
ORIGINAL FORMAT	Paper
Source Identifier	LG 1.2:F 85/4
Location	247462746
DIGITAL IDENTIFIER	RMDHOUSE_JLBC_FQA_HWFF_AUG_25_1993.pdf
DIGITAL FORMAT	PDF (Portable Document Format)
DIGITIZATION SPECIFICATIONS	Digitized into PDF form through scanning at the Records Management Division, Arizona State Library.
REPOSITORY	Arizona State Library. Archives and Public Records--Law and Research Library.
File Size	1321.625 KB
Full Text	Follow- Up Questions and Answers to the Interim Committee on Statutory Funding Formulas Health and Welfare Funding Formulas Prepared by The Staff of the Joint Legislative Budget Committee - August 25, 1993 Joint Legislative Budget Committee Staff Memorandum DATE: August 25, 1993 TO: Members of the Interim Committee on Statutory Funding Formulas FROM: Staff of the Joint Legislative Budget Committee SUBJECT: HEALTH AND WELFARE FUNDING FORMULA OPTIONS At the request of the Chairmen, the JLBC Staff has prepared a list of possible options for revising health and welfare statutory funding formulas. The list is not intended to be exhaustive, but it does present a range of options for modifying the statutory funding formulas. We would note several caveats: 1) Savingslcosts are General Fund estimates based on FY 1994 appropriation levels. Caseload and federal participation assumptions are still being developed for FY 1995. 2) Savingslcosts are based on full- year savings. These amounts may need to be revised based on implementation delays, which may include the time required to receive a federal waiver. 3) Savings/ costs of the various options are not necessarily additive, may affect the savings of other programs, or may be mutually exclusive. Due to the above caveats, additional analysis would be required if one or more of these options are to be pursued during the 1994 legislative session. Background on benefitslservices and population can be found in the " Health and Welfare Funding Formulas" report of July 21, 1993. If there are questions, please call us at 542- 5491. MS: ss Attachment xc: Ted Ferris, Director OPTIONS TO REVISE HEALTH AND WELFARE FUNDING FORMULAS for those already enrolled. Calculate benefits based on no more Assumes a 35 % turnover rate within the current than 2 children, for new recipients te inflation indexing of AFDC AGENCY/ PROGRAM AFDC AFDC General Assistance General Assistance General Assistance Adoption Services SAVINGS/ ( COST) 1' $ 15.3 million $ 1.2 million $ 7.3 million $ 1.5 million $ 15.4 million Undetermined OPTION Adjust payment to standard in effect prior to 619 1. Establish a flat AFDC grant of $ 347 per month regardless of family size. I . I--=- To conform with SSI, increase from 30 days to one year the period that a disability must be expected to persist in order to qualify for benefits. Eliminate alcohol/ drug abuse as a qualifying disability. Eliminate the program. Cap medical payments, or use a means test to determine the amount of the payment. COMMENTS Changes maximum benefit for a family of 3 from $ 347 to $ 293. Would reduce caseload by 1,400 recipients as financial eligibility would be lower. Based on a family of 3, approximately 30% of the caseload would have their grants reduced and 40% would have their benefits increased. Would reduce caseload by 45 %, or 4,050 recipients. To avoid possible legal issues of " grandfathering", the state may need to eliminate the existing program and establish a new benefit program. Would reduce caseload by 9 % , or 8 10 recipients. Would eliminate estimated caseload of 9,000 recipients. DES covers the medical cost once it is established that the child has a pre- existing condition which will need treatment or surgery. i FEDERAL WAIVER REQUIRED No Yes I ._ No No No No AHCCCS Acute Care Acute Care No No Limit the scope of MNIMI services and the length of eligibility, require a sliding fee scale/ deductibles, or increase assets standards and copayments . Parallel federal eligibility standards by limiting coverage in state- only programs to pregnant women and children. Unknown Unknown Could shift costs to counties and private hospitals. Savings estimates would require actuarial assistance given the interactive effect of various programmatic changes on capitation rates. Policy change would follow federal eligibility standards which focus on coverage for women and children. A similar proposal was made for the FY 1993 budget by the Governor at a savings of $ 80 million. Would be cost shifting to counties and private hospitals as those no longer covered incur uncompensated care. ' PROGRAM Acute Care Behavioral Health Department of Health Services OPTION Change SOBRA Women and Infants income eligibility level from 140% of FPL to 133 % , the minimum required by Medicaid. Conform to current AHCCCS policy by limiting behavioral health services for undocumented aliens to emergency care. Undetermined No data available on current number of undocumented aliens in the behavioral health system. Behavioral Health REQUIRED No Cap family income at $ 25,000 for subvention ( 100 % state- funded) I No - d d ren ' s .. Eliminates approximately 4 % of subvention costs. Rehabilitative This policy has been added to the current CRS rules but is not currently in statute. Therefore, it is reinforcing existing savings and actual marginal savings cannot be determined. ( COST) $ 2.4 million eligibility. Require 6 months residency. r 2 j ; j 0 . / " - 7 COMMENTS Would affect approximately 1,500 women and infants, or 5% of the SOBRA population. No Actual savings will vary based on specific Children's Rehabilitative Services - 11 FY 1994 Estimates only. Estimates do not reflect annualization or phased- in implementation. Exact savings may also vary, if more than one option is chosen. Require an income- based deductible for subvention clients; require copays for services; base services on AHCCCS health plan treatment modality rather than more expansive CRS multi- disciplinary approach; limit list of covered conditions. No Follow- Up Questions and Answers to the Interim Committee on Statutory Funding Formulas Health and Welfare Funding Formulas Prepared by The Staff of the Joint Legislative Budget Committee August 25, 1993 Joint Legislative Budget Committee Staff Memorandum DATE: August 25, 1993 TO: Members of the Interim Committee on Statutory Funding Formulas FROM: JLBC Staff SUBJECT: FOLLOW- UP INFORMATION TO QUESTIONS ASKED AT THE JULY 21ST MEETING The attached material provides answers to questions from the last meeting of the Interim Committee on Statutory Funding Formulas. The following list provides those questions and the corresponding page number of the Staff response. Ouestion Page 1. What is the growth history of the Health and Welfare programs? . . . . . . . . . . 1 De~ artment of Economic Securitv ( DES) Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Aid to Families with Dependent Children . . . . . . . . . . . . . . . . . 1 General Assistance 1 Day Care 2 JOBS 2 Foster Care . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Comprehensive Medical & Dental Program 3 Adoption Services 4 Institutional Support Payments . . . . . . . . . . . . . . . . . . . . . . . 4 Supplemental Payments 5 Developmental Disabilities Long Term Care 5 Arizona Health Care Cost Containment Svstem ( AHCCCS) Figure 11: Acute Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Department of Health Services ( DHS) Figure 12: Behavioral Health 6 Figure 13: Children's Rehabilitative Services . . . . . . . . . . . . . . . . . . . . . 7 Figure 14: Health and Welfare Programs . . . . . . . . . . . . . . . . . . . . . . . . 7 ( Continued) Members of the Interim Committee on Statutory Financing Formulas August 25, 1993 Question Pace 2. Has the growth in AFDC caseload been greater in years when we have increased benefits compared to years in which we have not? . . . . . . . . . . . 8 Figure 15: AFDC Growth Figure 16: AFDC Caseload Rate of Growth 3. Have we ever attempted to adjust the 50 state ranking of AFDC benefits for cost of living? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Table 1: Adjusted AFDC Benefit Ranking as Percentages of Average Monthly State Pay 10 4. Do we have historical data on the average length of time a person receives AFDC? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5. What are the federal guidelines in terms of the type of food that can be purchased with Food Stamps? 6. Will all General Assistance recipients eventually qualify for SSI? 12 7. Who determines the child care co- payment? . . . . . . . . . . . . . . . . . . . . . . 12 Attachment A: Transitional Child Care Fee Schedule 13 8. What types of day care can be reimbursed? . . . . . . . . . . . . . . . . . . . . . . 14 9. What is the number of voluntary foster care placements? 14 10. What is the difference in monthly rates between Coolidge and a developmental disabilities group home? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 11. Can AFDC households receive WIC benefits? 15 12. Can Institutional Support payment recipients also receive ALTCS? . . . . . . . . 15 13. How does Arizona rank nationally in terms of per capita health care costs? 16 14. What is the average cost per enrollee in the AHCCCS program compared to. what the same individual might cost in another state? Or, in other words, is the ( Continued) Members of the Interim Committee . on Statutory Financing Formulas August 25, 1993 Page AHCCCS program more or less expensive than a traditional Medicaid fee for service program? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Attachment B: Kirschner memo dated March 10, 1993 17 15. What is the hypothetical impact of the undocumented alien proposal on county property tax rates? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Table 2: Hypothetical Impact of AHCCCS FY 1994 Budget on County Property Tax Rates 20 Table 3: County Impact Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1 What is the growth history of the Health and Welfare programs? DES AFDC GENERAL FUND BUDGET FY 1984 TO N 1994 s ill hiilliona Interim Committee on Statutory Funding Formulas - 1- 100.0 80.0 60.0 40.0 20.0 0.0 GENERAL ASSISTANCE GENERAL mJND BUDGET M 1984 TO FY 1994 S in Milliona -- -- -- -- - I 20.0 105.500 .~ i 0.0 1984 1986 1988 1990 1992 1994 $ 1235 123.2 125.2 131.8 135.5 140.8 148.7 158.8 181.4 188.5 195. % Chg* ( - 1 1.6 ( 7.2 135.1 151.1 173.3 1107. C( 149. t$ 246.11276.0( 304. * Cumulative changa since FY 1984. Figure 1 i 1984 1986 1988 1990 1992 1994 $ 1 5.9 1 5.1 1 5.7 1 7.6 1 8.9 110.0 111.7 114.0 116.7 1 17.3 115.4 % Chg* I - 1- 1261 - 3.4 129.7 151.7 1 70.8 199.4 1138.81184.81196.41163.9 Cumulative change since FY 1984. Note: Includes savings from transfening recipients to the SSI program. Figure 2 JOBS GENERAL FUND BUDGET FY 1984 TO FY 1994 $ in Milliom 1984 1986 1988 1990 1992 1994 / Cumulative change ainca FY 1991. Figure 4 DAY CARE GENERAL FUND BUDGET FY 1984 TO FY 1994 S in w o n # 20.0 1505.0* ~---- I Interim Committee on Statutory Funding Fonnulas - 2- 0.0 ' 1984 1986 1988 1990 1992 1994 $ ( 7.0 1 10.3 1 11.4 ( 11.7 ( 12.7 ( 15.5 1 175 ( 17.1 ( 14.9 1 14.2 1 14.0 % Chg* I - 1 485 1 63.3 1 68.0 1 83.0 ~ 122.4~ 150.6~ 145.0~ 113.9~ 103.6~ 101.1 Cumulative clungc since FV 1984. NOW. JOBS Child CPre began in FY 1990 and Bimaitional Child Cpre ia PY 1991. ( Both programs arc fedexally mandated.) Figure 3 FOSTER CARE TOTAL EXPENDITURES FY 1984 TO FY 1994 S in Millions 14.0 -- 6.0 1 4.0 2.0 0.0 1984 1986 1988 1990 1992 1994 $ 1 6.1 1 4.2 1 8.9 1 9.7 1 8.3 1 9.6 1 9.5 1 9.7 1 9.7 111.1 112.2 % Chg* 1 - 130.91 44.2 1 57.6 1 35.7 1 55.8 1 55.2 1 575 1 58.4 ( 80.4 1 98.4 Cnmulative change since FY 1984. Figure 5 Interim Committee on Statutory Funding Formulas - 3- COMPREHENSIVE MEDICAL & DENTAL PROGRAM ( CMDP) GENEW FUND BUDGET FY 1984 TO N 1994 $ in Milliom 8.0 6.0 4.0 2.0 0.0 -- -- -- : 1984 1986 1988 1990 1992 1994 * Cumulative change since FW 1984. Note: General Fund han been o- t by incrs~ sedfe deral funding. Figure 6 ADOPTION SERVICES GENERAC FUND BUDGET FY 1984 TO N 1994 $ in Millions 1984 1986 1988 1990 1992 1994 $ ( 2.4 1 3.1 1 3.6 ( 4.8 ( 7.1 1 9.2 ( 9.6 ( 10.7 1 13.0 \ 12.5 ( 12.5 % Qg* I - 1 28.6 1 49.4 ~ 101.4~ 199.0~ 283.6~ 3020~ 349.4~ 445.3~ 424.7~ 424.7 Cllmulativo change sitroe FY 1M. Figure 7 ; Interim Committee on Statutory Funding Formulas - 4- INSTITUTIONAL SUPPORT PAYMENTS GENERAL FUND BUDGET FY 1984 TO FY 1994 s In Millions 1.4 1.2 1.0 0.8 0.6 0.4 <& ' i 1984 1986 1988 1990 1992 1994 $ 1 1.2 1 1.2 1 1.3 1 1.3 1 1.1 1 0.9 1 0.4 1 0.4 1 0.4 1 0.4 1 0.4 % Chg* I - 1 0.9 1 11.5 1 5.0 1 - 8.2 1- 22.51- 64.3 1- 66.21- 67.41- 64.3 1- 64.3 * Cumulattve change dnce FY 1984. Nota: Beginning FY 1989, ALTCS dpionts did not qua14 for these payments. Figure 8 SUPPLEMENTAL PAYMENTS GENERAL FUND BUDGET FY 1984 TO FY 1994 $ in Millions 5.0 ::$ $ 2.0 g Interim Committee on Statutory Funding Fomtulas - 5- 1.0 DEVELOPMENTAL DISABILITIES LONG TERM CARE GENERAL FUND BUDGET FY 1984 TO FY 1994 S in Millions 60.0 50.0 40.0 1; 30.0 20.0 10.0 0.0 1984 1986 1988 1990 1992 1994 $ 1 1.4 1 1.8 1 20 1 2.6 1 3.3 1 3.4 1 3.1 1 3.8 1 4.1 1 4.4 1 4.4 % Chg* I - 124.0 142.1 1 82.6 ) 132.0~ 139.1~ 118.6~ 167.0~ 188.6~ 212.1~ 2121 Cumulative change since FY 1984. Note: Includea Housekeeping, Visiting Nurse, and Home Health Aide payments. Figure 9 : r : r 1: 0.0 '- 1 1984 1986 1988 1990 1992 1994 Cumulative change since FY 1990. the first full yuu of operation Note: Increaaed federal reimbursement o i k t Gm4 Fund in FY 1994. Figure 10 AHCCCS AHCCCS - ACUTE CARE GENERAL FUND BUDGET M 1984 TO FY 1994 S in Millions 500.0 , 400.0 ;: 1984 1986 1988 1990 1992 1994 $ 1 93.8 ~ 118.~ 122.1) 117.~ 170.3~ 6.~ 228.~ 292.~ 380. o[ 439.4432 % Chg* I - 1 26.2 130.2 1 25.2 1 81.5 1130. d143.4211.~ 304.9( 368.4361. * Cumulative change ainw FY 1984. Figure 11 DHS BEHAVIORAL HEALTH GENERAL FVND BUDGET FY 1984 TO FY 1994 S in Millions 160.0 120.0 80.0 60.0 420.0 1 I 1984 1986 1988 1990 1992 1994 Cumulative chnnge since FY. 1984. Note: FY 1994 will probably require supplemental funding. Figure 12 $ 1 37.0 135.8 149.3 / 57.5 1 60.9 178.4 1 98.8 ~ 1043] 133.~ 146.81141. % Chg* / - 1 - 3.4 / 33.2 155.3 164.4 1111.~ 167.0/ 181.8j259.91296.5~ 283. Interim Commiffee on Statutory Funding Formulas - 6- SUMMARY CHILDREN'S REHABILITATIVE SERVICES GENERAL FUND BUDGET FY 1984 TO FY 1994 S in Millions HEALTH AND WELFARE PROGRAMS GENERAL FUND BUDGET N 1984 TO N 1994 $ in Millions 1, ooo - 800 -- 600 -- 400 -- 0 I I I I I I I I 1984 1986 1988 1990 1992 1994 Figure 14 20.0 15.0 10.0 5.0 ;: 0.0 Interim Committee on Statutory Funding Formulas - 7- -- -- -- < I 1984 1986 1988 1990 1992 1994 $ / 2.4 1 2.6 1 3.9 / 3.8 1 5.3 1 5.9 / 5.3 1 5.8 / 15.3 117.3 116.7 % Chg* I - 1 5.8 160.6 156.6 ~ 117.7~ 139.0~ 116.1/ 138.3/ 525.1~ 606.3~ 581.8 Cumulative change since FY 1984. Figure 13 2. Has the growth in AFDC caseload been greater in years when we have increased benefits compared to years in which we have not? AFDC GROWTH FY 1989 TO FY 1993 Recipients ( Thousands) 200 __ Vertical linrs 180 1: represent benefit 160 --: increases I I I - - I I I ! I I I i I I I I I I I M 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 19881 1989 1 1990 1 1991 1 1992 11993 Monthpear Note: Dates of benefit increases are 6/ 91, 7/ 91, and 7/ 92. Figure 15 AFDC CASELOAD RATE OF GROWTH ANNUALIZED MONTHLY CHANGES FROM AUGUST 1989 TO JUNE 1993 Percentage Change 120.0 100.0 represent 80.0 incrorses 60.0 40.0 20.0 0.0 - 20.0 - 40.0 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 9 1 1 1 3 5 7 19881 1989 1 1990 1 1991 1 1992 11993 Monthryear Note: Dates of benefit increases are 6191,7/ 91, and 7/ 92. Figure 16 Interim Committee on Stdutory Funding Formulas - 8- 3. Have we ever attempted to adjust the 50 state ranking of AFDC benefits for cost of living? We have not been able to adjust this ranking by cost of living, nor have we been able to locate any such adjustment. Cost of living indices are typically calculated for selected, major metropolitan areas, whereas AFDC rankings are often tabulated as state averages. In attempting to compare apples to apples, we have adjusted state AFDC benefits as percentages of average monthly state pay. In doing so, we have made the assumption that a state's cost of living is reflected in its average monthly pay. For FY 1993, Arizona ranked 31st nationally in unadjusted, maximum AFDC benefits for a three- person family. However, when calculating this AFDC benefit as a percentage of average monthly state pay, Arizona ranks 28th ( see Table 1). Interim Committee on Statutory Funding Formulas - 9- Table 1 ADJUSTED AFDC BENFTIT RANKING AS PERCENTAGES OF AVERAGE MON'IRLY STATE PAY Alaska Hawaii Rhode Island Wisconsin South Dakota Washington California Minnesota C O M ~ C ~ ~ C U ~ Stnte North Dakota New Hnmpsh~ re Maine Iowa Montnna Massnchusettv Oregon Kunhuh Utllh Nebraska Mlchigan ( Ann Arbor) Wyoming Penn.. y lvunia New York ( New York City) Okluholnn Iduho Vermont 37.03% 1 $ 1.780 32 $ 659 4 AFDC Benefit Adjusted As Percentage of Average Monthly Stnte Pay RANK New Mexico 19.18% 27 $ 1,690 42 $ 324 35 Arizona 18.75% 28 $ 1,851 26 $ 347 31 Nevndn 18.09% 29 $ 1.924 21 $ 348 30 Virginia Colomdo Ohio New Jersey Mary land Florida Deluwure Missouri North Carolina Indiunu Illinois tirorgia West Virginia Kentucky Arksnsus Soutll C: urolina Louis~ ana '~'~ MCSSC~: Texw Alnbruna Mississ~ pp~ 1991 Average Monthly Stnte Pny RANK FY 1993 Unadjusted AFDC Monthly Benefit RANK 4. Do we have historical data on the average length of time a person receives AFDC? The only available data are national averages from the 1992 Green Book, Committee on Ways and Means, U. S. House of Representatives. The following data, however, may understate long- term welfare dependence since it measures only the current period of AFDC eligibility. About one- third of all recipients will leave the program and then re-enter at a later date. Median Months23.0 27.0 31.0 29.0 26.0 27.0 26.3 24.9 23.0 The only historical data for Arizona is that recipients on the program for more than 1 year increased from 59% in 1984 to 65% in 1990. More discrete time periods from these two DES studies are not comparable. Based on active cases as of May 1993, DES indicates that the number is currently 58 % . 5. What are the federal guidelines in terms of the type of food that can be purchased with Food Stamps? Federal guidelines define what foods are eligible to be purchased with Food Stamps. All food or food products that are for human consumption are eligible items. Food products that can be purchased include: vegetable seeds, food- producing plants, roots, and trees; " health foods" such as wheat germ, brewers yeast, sunflower seeds, rose hips powder, and enriched or fortified foods; infant formula, diabetic or dietetic foods; deposits on returnable bottles or containers; distilled water and ice; items used in the preparation and preservation of food such as spices, herbs, shortening; and snack foods such as candy, potato chips, chewing gum and soft drinks. Items not eligible are alcoholic beverages. tobacco, and hot foods and hot foods prepared for immediate consumption. Food stamps may be used as payment to authorized organizations that prepare and serve meals to: - elderly or disabled food stamps recipients; - eligible recipients in a substance abuse treatment and rehabilitation center; - eligible recipients in a shelter for battered women and children; Interim Committee on Statutory Funding Formulas - eligible homeless food stamp households in a facility that feeds homeless clients; and - blind or disabled recipients who receive benefits under either Title I, 11, X, XIV, or XVI of the Social Security Act who are in a group living facility. 6. Will all General Assistance recipients eventually qualify for SSI? No, not all General Assistance ( GA) recipients are eligible for SSI. Only GA recipients with a long- term disability may be SSI- eligible. To be SSI- eligible, a disability must be expected to result in death, or be expected to last for a continuous period of 12 months or more. The physical or mental disability must make the person unable to perform his previous work or any other substantial gainful employment. General Assistance requires only 30 days of continuous disability. 7. Who determines the child care co- payment? The DES Child Care Administration staff determines co- payment amounts for those federal programs requiring parental co- payments. Of the 5 federal child care programs, 3 require co- payments: Transitional, At- Risk and CCDBG. For these programs, the amount of the co- payment is determined by family size and gross income. DES has attempted to limit the co- payment to approximately 5 % to 10% of a family's monthly gross income for a typical family consisting of 2 children and 1 parent. The State Child Care Subsidy does not require a co- payment. However, the state subsidy does not completely cover day care expenses. Parents pay the difference between the full cost and the subsidy amount to their provider. Transitional Child Care CCC) - All clients are required to make a co- payment. Federal regulations allow states to establish fee schedules and while encouraging " meaningful contributions" the regulations recognize that families with the lowest income levels might contribute " no more than a token amount. " While the TCC fee schedule has 5 levels, the vast majority of families have incomes in the lowest bracket ( see the TCC Fee Schedule, Attachment A). The maximum monthly co- payment range for full day child care services for one child would be $ 21.67 to $ 108.35 depending upon the family size and gross monthly income. At- Risk and CCDBG - Federal regulations require a sliding fee schedule and allow states to establish co- payment amounts. An exception is allowed under CCDBG. If families fall below the federal poverty level ( includes all CCDBG eligible families in Arizona), the co- payment may be waived. DES does not waive the co- payment. Due to federal requirements to aid the poorest families and limited resources, the upper income eligibility for both At- Risk and CCDBG correspond to the first income bracket and associated co- payment levels of the TCC Fee Schedule. The maximum monthly co-payment required for one child receiving full day child care services would be $ 21.67. Interim Committee on Stalutory Funding Formulas - 12- Attachment A 8. What types of day care can be reimbursed? DES through the State Day Care subsidy program may provide reimbursement to DHS licensed child care centers, public school child care programs, and certified homes. The federal child care programs allow payments to non- certified relatives as well as to the licensed and certified entities, and public schools. For the Transitional, JOBS, and At- Risk programs all providers, even relatives, must meet applicable standards of state and local law. For these 3 programs, the provider may not be a member of the Eligible Family's AFDC Assistance Unit or a member of the Eligible Family Unit. The CCDBG requirements exempt relative providers from meeting health and safety requirements. Non- certified relative providers may include an adult who is an aunt or uncle ( natural, adoptive, or in- law), grandparent ( natural, step, adoptive) or an adult sibling ( natural, step, or adoptive) of the child needing care. Non- certified relative providers are paid rates up to 90 % of the certified family child care market based rates for each geographic area. Non- certified relative providers are required to: 1. Be at least 18 years of age. 2. Be fingerprinted and registered in accordance with A. R. S . 5 46- 171. The provider is responsible for payment of current FBI search fee at time fingerprinting is accomplished. 3. Provide child care that is in accordance with state statutes ( no more than 4 children for whom the provider receives compensation without being regulated by the DHS) or tribal standards. 4. Maintain current emergency information on the family. 5. Maintain billing, payment, and attendance records for five years. 6. Collect the appropriate co- payments from the family. 7. Have a signed registration agreement with the DES which requires information necessary to make payment to the provider, such as name, address, social security number, and provider number. 9. What is the number of voluntary foster care placements? The estimated monthly average of voluntary foster care placements in FY 1993 is 122 out of 2,804 estimated monthly average foster care placements. For FY 1993, voluntary placements were 4.4 % of all placements. Voluntary foster care placement is an agreement between DES and written consent of a parent, guardian or custodian, and the child, if over 12 years of age and not developmentally disabled, to place a child in foster care. Placement is limited to 90 days with no more than 2 non- consecutive 90- day periods allowed within a 2 year time frame. Interim Committee on Statutory Funding Formulas - 14- A voluntary placement is based upon the parent( s)' willingness and ability to make sufficient progress within the voluntary placement timeframe and placement is necessary for the protection of the child. 10. What is the difference in monthly rates between Coolidge and a developmental disabilities group home? The Arizona Training Program at Coolidge ( ATPC) has 2 levels of placement. The table below contrasts the costs of ATPC with the average cost for a group home operated by a private vendor. Group Home Coolidge Private Vendor $ 2,833,91 $ 2,499.43 Intermediate Care Facility $ 8,270.41 NIA The Group Home rates do not include the cost of Day Programs or individual therapies. Non- employment related Day Programs average $ 510.44 per month and employment related Day Programs average $ 349.62 per month. The Intermediate Care Facility rate includes the cost of all services. 11. Can AFDC households receive WIC benefits? Yes, pregnant, postpartum, and breast- feeding women, infants, and young children who are members of an AFDC- eligible household are eligible for WIC benefits. WIC payments or benefits are disregarded as income in determining AFDC eligibility and payments. At this time, neither DES nor DHS can estimate the number of WIC clients who also receive AFDC benefits. However, DHS is currently enhancing its existing management information system which should enable it to access this information in the future. 12. Can Institutional Support payment recipients also receive ALTCS? Institutional Support recipients are not eligible for ALTCS. It was assumed with the implementation of the federal long term care program ( ALTCS) that all elderly and disabled clients in private and public nursing homes would qualify for the ALTCS. Laws 1988, Chapter 302, disqualified any nursing home resident who receives Title XIX long term care services from receiving Institutional Support payments. Recent data show that there are no public nursing home clients. However, there are still 4 clients who receive private nursing home payments, because they do not meet the ALTCS's programmatic criteria. Clients in Supervisory Care Homes are not ALTCS Interim ~ ommifieeo n Stafutory Funding Formulas - 15- eligible because this level of care is not reimbursed by ALTCS. 13. How does Arizona rank nationally in terms of per capita health care costs? The Staff contacted the federal Congressional Budget Office and obtained information that is somewhat dated but is all that is currently available. The latest national data on health care expenditures by state was collected in 1982 by the federal Health Care Financing Administration. In 1990, a consulting fm used that data and made projections for what those expenditures might be in 1990. Based on these projections, Arizona ranked 33rd in the nation in per capita health care expenditures, with annual expenditures of $ 2,211 per person. The highest ranked state was Massachusetts with per capita expenditures of $ 3,031, while the lowest ranked state, South Carolina, had per capita expenditures of $ 1,689. 14. What is the average cost per enrollee in the AHCCCS program compared to what the same individual might , cost in another state? Or, in other words, is the AHCCCS program more or less expensive than a traditional Medicaid fee for service program? According to a memorandum transmitted to the Legislature in March 1993 by Dr. Leonard Kirschner, Director of AHCCCS, the AHCCCS program has proven to be less costly than a traditional fee for service Medicaid program, based on a federal study that compared Arizona to 20 other states. The memo ( Attachment B) indicates that for FY 1990, the AHCCCS program saved the state 10.2% over what would have been spent had Arizona had a fee for service system and not managed care. Further, Dr. Kirschner states that the AHCCCS program has been more successful than other states in controlling the rate of growth in medical care costs, holding the rate of growth over the period of FY 1983 to FY 1990 to 69.2 % , compared to the 113.3 % increase in other states for the same period. Based on this federal study and earlier similar studies, it appears that at least for the federal eligibility groups analyzed, AHCCCS delivers care at a lower cost. These analyses did not, however, examine the state- only populations, such as the MNIMI. The Staff is unaware of any studies on the average medical care cost of groups like the MNIMI in other states, so we are unable to offer any comparison data. Federal standards imposed on states' regarding care for federally eligible members have established some continuity among the states and make comparisons more useful. However, from our past research, it appears that state funded indigent health care programs vary dramatically by the types of people served and the scope of services, making comparisons somewhat difficult. Interim Committee on Statutory Funding Fomulas - 1 6- Attachment B ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM FIFE SYMINGTON Governor LEONARD J. KIRSCHNER. M. D. ,. M. P. H M E M O R A N D U M TO: Members of the Arizona Legislature . . , FROM: Leonard J. Kirschner, M. D., M. P. H., Director - 7k SUBJECF AHCCCS ACUTE CARE PROGRAM COSTS COMPARED TO TRADITIONAL MEDICAID PROGRAMS DATE: March 10, 1993 There are 56 Medicaid programs operational in the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Marianas and American Samoa. AHCCCS is unique among these programs because it is the only one functioning as a statewide, managed care demonstration project under waiver authority approved by the Secretary of Health and Human Services. Because of this status the AHCCCS program has been monitored continually by the Health Care Financing Administration ( HCFA). I recently received the latest evaluation of our program from HCFA in a draft report dated January 1993. With the concurrence of HCFA, I would like to share some of the cost evaluations in this report. Health care is an expensive enterprise in modern America. That fact is the main reason for the raging debate about health care reform. As AHCCCS' covered population has increased over the past six years from 175,000 to almost 500,000 Arizona residents, the aggregate costs have increased dramatically and understandably have caused policy makers to question the fiscal impact of this program. Aggregate costs are driven by population increase, but the key to evaluating the AHCCCS program is to compare changes in per capita costs. The current draft report does just that. The HCFA evaluators have used the Medicaid experiences of 20 states as a bench mark to compare the AHCCCS results. Those states are Alabama, Arkansas, California, Florida, Georgia, Iowa, Louisiana, Maine, Michigan, Mississippi, Montana, New Jersey, New Mexico, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, West Virginia and Wisconsin. The report states that: " AHCCCS continued to experience lower costs than the 801 East Jefferson . Phoenix. Arizona 85034 . ( 602) 234- 3655 P. O. Box 25520 . Phoenix. Arlzona 85002 Atrachment B ( Cont.) Memo to Members of the Arizona Legislature March 10, 1993 Page 2 estimated cost for a traditional Medicaid program in Arizona. From the program perspective, AHCCCS' costs were lower than traditional program costs for both FY 90 and FY 91. In addition to the generally favorable cost experience, AHCCCS was successful in containing cost increases below those experienced in the comparison states." For FY 90 the cost of medical senices for the categorically eligible members of the AHCCCS program would have been $ 27 million more if a traditional fee- for- service system were in place in Arizona. This is an estimated savings of 10.2 percent. For FY 91 the estimated savings are $ 70.7 million, or 18.9 percent of the cost of a traditional program. Both the Federal government and Arizona share in the cost savings. For N 90, HCFA savings were $ 19 million while Arizona's savings were $ 8 million. For FY 91, HCFA savings were $ 43.6 million while Arizona's savings were $ 27.1 million. It must be pointed out that the administrative cost of the AHCCCS program is higher than the average administrative cost in the 20 comparison states. That is understandable because a managed care system by its very nature uses administrative services to control program expenditures, while a state that simply processes claims has lower overhead. When you look at total expenditures, both program and administrative, the total savings for the two fiscal years evaluated in this report are $ 67.5 million. To quote from the report, " Since the beginning of the program, FY 83 to FY 91, AHCCCS' average per capita costs increased 69.2% while the average per capita cost in the comparison states increased 113.3%, a reduction of 44.1% in the rate of increase. For the period from N 83 to N 91, the average annual increase in AHCCCS per capita cost was 6.8%, compared to 9.9% for a traditional Medicaid program in Arizona." The bottom line is that AHCCCS is providing quality health care at a substantial savings to the taxpayer. If you would like further information on this report please feel free to contact me. What is the hypothetical impact of the undocumented alien proposal on county property tax rates? For a county by county assessment of the impact of the recent AHCCCS Acute Care budget changes, please refer to the attached Table 2 labeled " Hypothetical Impact of AHCCCS FY 1994 Budget on County Property Tax Rates." The estimated change in county property tax rates assumes that all of the AHCCCS impact will be absorbed by property taxes instead of through reductions in county budgets or funded from other sources of revenue, such as state sales tax distributions. The Staff has not surveyed county budget officials to determine if adjustments have in fact been made to property tax rates to accommodate the impact of the AHCCCS Acute Care budget changes, hence our reference to the new rates as hypothetical. The net impact of the AHCCCS FY 1994 budget agreement is displayed on Table 3 labeled " County Impact Estimate." This table was developed during negotiations on the AHCCCS budget and reflects the net impact of the increased Acute Care contribution, increased uncompensated care resulting from the change to provide only emergency services coverage for undocumented aliens, and the gain to counties from additional disproportionate share revenue. To illustrate how the Staff developed the new hypothetical tax rates, we will use Maricopa County as an example. From the 1993 Arizona Tax Research Association ( ATRA) publication of county assessed valuation and tax rates, we calculated the amount of property tax generated by the county property tax rate, applied to the county's total primary assessed value. Then, adding to that result the impact of the AHCCCS budget changes on Maricopa County ( estimated $ 2.8 million loss), we calculated the new total property tax Maricopa County would need to generate to cover that loss. Based on the new total property tax needed, we then determined the new property tax rate. For Maricopa County, the new hypothetical rate would be $ 1.6242, or an increase of $ 0.0203 ( 2 cents/$ 100 of assessed value). To contrast counties falling at both ends of the range of hypothetical changes in property tax rates, rates in Cochise County could increase $ 0.1192 to cover the impact of the AHCCCS budget changes, while in La Paz County, a net increase in revenue due to additional disproportionate share revenue could result in a property tax rate reduction of $ 0.03 12. Interim Committee on Statutory Funding Fonnulas - 1 9- Hypothetical Impact of AHCCCS FY 1994 Budget on County Property Tax Rates 1992 Primary 1992 County Property Tax Impact of New Property Potential Rate Percent Assessed Value \ 1 Tax Rate \ I Generated AHCCCS Chgs \ 2 Tax Required \ 3 New Rate \ 4 Change Change Apache $ 397,282,439 $ 0.7446 $ 2,958,165 $ 108,199 $ 2,849,966 $ 0.7 174 ($ 0.0272) - 3.66% Cochise 388,328,011 3.5909 13,944,471 ($ 462,739) $ 14,407,210 3.7101 0.1192 3.32% Coconino 657,3 14,382 0.9785 6,431,821 ($ 78,368) $ 6,510,189 0.9904 0.01 19 1.22% Gila 275,957,985 3.9300 10,845,149 ($ 208,770) $ 1 1,053,918 4.0057 0.0757 1.93% Graham 59,681,813 2.4447 1,459,041 ($ 26,019) $ 1,485,060 2.4883 0.0436 1.78% Greenlee 181,656,513 0.7080 1,286,128 $ 34,555 $ 1,25 1,573 0.6890 ( 0.0190) - 2.69% La Paz 97,653,250 3.0020 2,93 135 1 $ 30,456 $ 2,901,094 2.9708 ( 0.0312) - 1.04% ~ Maricopa 13,605,514,589 1.6039 218,218,848 ($ 2,759,287) $ 220,978,136 1.6242 0.0203 1.26% Moha ve 647,885,806 2.2791 14,765,965 ($ 66,458) $ 14,832,424 2.2894 0.0103 0.45 % Navajo 499,969,710 0.9546 4,772,7 1 1 $ 20,455 $ 4,752,256 0.9505 ( 0.0041) - 0.43 % Pima 2,951,177,433 4.2249 124,684,295 ($ 1,346,447) $ 126,030,742 4.2705 0.0456 1.08 % Pinal 559,036,278 4.8816 27,289,9 15 ($ 485,954) $ 27,775,869 4.9685 0.0869 1.78% Santa Cruz 142,417,027 2.5200 3,588,909 ($ 57,139) $ 3,646,048 2.5601 0.0401 1.59% Yavapai 68 1,677,858 2.5720 17,532,755 ($ 94,409) $ 17,627,164 2.5858 0.0138 0.54% Yunta 386,997,309 2.4642 9,536,388 ($ 218,905) $ 9,755,293 2.5208 0.0566 2.30% Total 21,532,550,403 460,246,112 ( 5,610,830) 465,856,942 11 1992 Arizona Tax Research Association 21 Represents the net impact of the increased Acute Care contribution ($ 12.8 million), increased uncompensated care resulting from the undocumented alien policy change ($ 3.6 million loss for Maricopa and Pima counties only), and additional disproportionate share funding ($ 10.8 million). See attached table for county by county impact. 31 Represents the hypothetical level of total property tax collections necessary to cover the impact of the AHCCCS budget changes. 41 Represents the hypothetical new property tax rate necessary to cover the impact of the AHCCCS budget changes. JLBC Staff August 5, 1993 COUNTY IMPACT ESTIMATE * Increased Acute Care Contribution Allocated By Current Statutory Formula* JLBC Staff August 5, 1993 Impact of Increased Uncomp Total Acute FY 94 Acute Care From Increase & Care Increase Undoc Alien Prop Uncomp Care Apache ($ 5 1,617) $ 0 ($ 51,617) Cochise ( 425,357) 0 ($ 425,357) Coconino ( 142,682) 0 ($ 142,682) Gila ( 27 1,404) 0 ($ 27 1,404) Graham ( 102,977) 0 ($ 102,977) Greenlee ( 36,631) 0 ($ 36,631) La Paz ( 40,730) 0 ($ 40,730) Maricopa ( 7,424,727) ( 2,900,000) ($ 10,324,727) Mohave ( 237,718) 0 ($ 237,7 18) Na vajo ( 59,686) 0 ($ 59,686) Pima ( 2,87 1,576) ( 700,000) ($ 337 1,576) Pinal ( 52 1,546) 0 ($ 52 1 ,546) Santa Cruz ( 92,73 1) 0 ($ 92,731) Yavapai ( 274,221) 0 ($ 274,221) Yuma ( 254,497) 0 ($ 254,497) Total ($ 12,808,100) ($ 3,600,000) ($ 16,408,100) 1 County Savings From FY 93/ 94 Dispro Share Gain $ 159,816 ( 37,382) 64,314 62,634 76,958 71,186 71,186 7,565,440 171,260 80,141 2,225,129 35,592 35,592 179,812 35,592 1 $ 10,797,270 ( Net County $ Impact $ 108,199 ($ 462,739) ($ 78,368) ($ 208,770) ($ 26,019) $ 34,555 $ 30,456 ($ 2,759,287) ($ 66,458) $ 20,455 ($ 1,346,447) ($ 485,954) ($ 57,139) ($ 94,409) ($ 218,905) 1 ($ 5,610,830)

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Home Follow-up questions and answers to the Interim Committee on Statutory Funding Formulas: health and...

Follow-up questions and answers to the Interim Committee on Statutory Funding Formulas: health and welfare funding formulas

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