Written Comments

AHCCCS     
Office of Intergovernmental Relations
Attn: Theresa Gonzales
801 E. Jefferson St., MD 4200
Phoenix, AZ  85034

Dear Ms. Gonzales,

The Arizona Consortium for Children with Chronic Illness is very concerned about the approval and implementation of the “Cost Sharing/ALTCS Premium” which was included in the 1115 waiver renewal submitted to CMS.

We have several serious concerns for our families:

1. The Waiver Fact Sheet distributed by AHCCCS concerning the ALTCS cost sharing defines this effort as a premium.  In A.R.S. 36-2939 (G), the statutory authority for the premium, the cost sharing mechanism is defined and explained as a deductible.  There are fundamental differences between premiums and deductibles, the most important of which is that deductibles are based on the value of services provided, whereas premiums are set compensation for access to services, other than case management. There are many chronically ill children covered by ALTCS who do not receive services. Many families remain with ALTCS while waiting (for many months) to obtain services which are in short supply.  Others stay in case they lose primary care insurance. If the premium is approved, these families may not get the services their children desperately need in order to thrive and reach their full potential.

2. For those families who are receiving services, the premium will not accurately reflect the level of usage or share of cost.  Some families on equal income levels, and therefore equal premium levels, will use very different levels of service, based on the severity of their child’s disability. Families that must pay the premium may also be incentivized to use more services than they would otherwise.

3. The premium does not take into account the families who pay for private health insurance.  This can be very expensive - $6,500 per year or more.  These are families that remain with ALTCS because a service or product needed by the family is not covered by their primary coverage.  These families will pay the same as other families which receive all services through ALTCS.

4. The premium does not take into account that there are more out-of-pocket costs for children with chronic illness. These non-covered costs can be very significant, and can include:

• Therapies not covered by ALTCS.

• Therapies covered by ALTCS, but not available due to a shortage of providers.

• Equipment sterilization supplies.

• Additional dental costs due to the effect of some prescription medications on children’s teeth.

• Doctor, hospital and other co-payments not covered by ALTCS (this has occurred with families who have private insurance coverage as well as ALTCS).

• Over-the-counter medications prescribed by doctors (this can be a substantial cost).

• Diapers.

• Wheelchair lifts.

• Cost associated with purchasing a larger vehicle to accommodate a wheelchair and/or medical equipment.

• Pedialyte® for children susceptible to dehydration.

• Air duct cleaning, special air filters, etc. for children with breathing problems.

• Research materials on child’s illness.

• Gasoline and wear and tear on automobiles for excessive travel to doctors, hospitals, labs, etc. (especially for families with chronically ill children living in rural areas who require medical care at specialty clinics).

• Assistive learning devices not covered by ALTCS.

• Wheelchair modifications for the home.

• Home repairs for damage caused by children with behavioral problems.

In addition, the mother of the child is often unable to work, thus lowering the family’s income potential.

5. The premium is set up so that a family of four earning adjusted gross income of $99,980 per year pays a premium of $166.63 per month.  However, a family of four with income of $100,000 will pay a premium of $333.33 per month.

6. Adjusted gross income (AGI), per a family’s IRS 1040 form, is a poor measure of a family’s ability to pay. AGI does not take medical and dental expense deductions into account.  Most families are not able to meet the minimum threshold to deduct these expenses on their 1040. Arizona allows deductions for these expenses in some cases, but basing the premium on allowing a reduction to AGI for the amounts deducted for medical and dental expense per the Arizona 140 form is not appropriate because not all medical expenses are allowed to be deducted, and because those families who do not itemize federal deduction are not allowed to make the deduction on their Arizona form.

7. The premium may not prove to be a significant source of income.  The figures used to determine the income that the premium would generate when the enabling legislation was passed are suspect.  Financial information was not collected from families whose children were approved for ALTCS, because it was not required, so no one knows how many families would be affected.  This also makes it impossible to determine the revenue from the premium. Any assumptions made would have had to compensate for the fact that few of these families have two wage earners. Also, we have not seen any estimates on the cost of collecting the premiums.

8. The original intention of ALTCS was to help “equalize” families who had such seriously ill and disabled children that they were at risk of institutionalization. This premium is not in keeping with the spirit of this intent, or even the spirit of the legislation passed.  Chronically ill and disabled children will be hurt by this premium.

If you have any questions concerning our comments, please let me know.  We will appreciate being included in any follow-up communications or meeting concerning this subject.

Sincerely,

Monica Attridge
Assistant Director