Arizona taxpayers foot the bill for the delivery of more than half of all babies born here, a growing trend with a $200 million-plus annual price tag that has caught state leaders off guard -- even though the numbers have been rising for more than a decade.

The share of births paid for by Medicaid has been rising steadily since 1990. That growth hit a significant milestone in 2003 as it passed 50 percent, meaning that state-funded births outnumbered for the first time the number paid for by parents or their insurance companies.

The share has since continued to inch higher. In 2011, the Arizona Health Care Cost Containment System, Arizona's Medicaid program, paid for 53 percent of the state's 84,979 births, while private insurance paid for 42 percent, according to state statistics. The remainder were paid for by individuals.

In 2000, the numbers were reversed: AHCCCS paid for 42 percent of the 84,985 births.

"I had no idea that the number had grown to that ridiculous level," said Rep. John Kavanagh, R-Fountain Hills, chairman of the House Appropriations Committee. "That's shocking and depressing."

Indeed, as Gov. Jan Brewer and state lawmakers struggled over the past few years to balance the state budget and rein in spending on public services, there was no budget proposal to trim this program. Officials would not have had dollar figures readily available on which to base a discussion. The state doesn't compile the precise full annual cost of Medicaid-funded births, though it does track the number of births.

The Arizona Republic compiled cost estimates using data from a variety of sources.

The rise in Medicaid-covered births is not unique to Arizona. Nationally, state Medicaid programs on average cover about 40 percent of births, according to Families USA Deputy Executive Director Kathleen Stoll. Only about a dozen states' public-health programs have seen the share of publicly funded births pass 50 percent, but many more are getting close.

While no single factor is fueling the trend, there does appear to be a correlation between the rise in publicly financed births and the decline in Arizonans covered by private health insurance. Some experts blame companies cutting back on employee insurance coverage, rising private health-insurance costs and the spike in unemployment.

"(Medicaid) is a safety-net program," said Alina Salganicoff, vice president for women's health policy at the Henry J. Kaiser Family Foundation.

Absent scrutiny from a state agency or public officials, there's no way to know exactly why the trend continues or what -- if anything -- should be done to address it.

Issue never came up

Over the past four years, Arizona lawmakers have aggressively cut the state's budget, slashing $3 billion in programs and services, even selling Capitol buildings, to save money.

Every department and agency was tasked with scrutinizing its books, looking for areas where expenses may be rising and costs could be trimmed. The state cut education funding, froze Medicaid enrollment for tens of thousands of childless adults and capped AHCCCS payment for hospital stays at 25 days, among other things.

The rising costs of Medicaid-funded births, which do not appear as a line-item in the state budget and are paid for with a combination of state and federal money, never came up.

AHCCCS spokeswoman Monica Coury said the state maintains "extensive data in a data warehouse" on the costs associated with births covered through AHCCCS, but did not have the figures readily available. "There are multiple codes involved in prenatal care and labor and delivery and complications associated and when the cost of the birth becomes the cost of care to the child, etc.," she said in an e-mail. "Costs of 'births' are incredibly complicated."

Other states do closely monitor and report on Medicaid birth costs. For example, according to a Texas Health and Human Services Commission presentation in January, Medicaid funded 57 percent of Texas births, a total of 220,899, at a cost of $2.2 billion. Illinois Gov. Pat Quinn noted in his February budget address that more than half of his state's births are funded by Medicaid.

Maricopa Medical Center in Phoenix delivers many of the babies covered by AHCCCS. Michael Murphy, a spokesman for Maricopa Integrated Health System, which runs the hospital, said the program reimburses the hospital based on the number of days mom and baby stay. The average is 21/2 days for mothers and two days for newborns, he said.

Based on those averages, the AHCCCS-covered fees for delivery and care at all hospitals immediately after the birth for mom and baby are $4,386 each, and add up to $198 million for all of the 2011 covered births in Arizona. The state's Joint Legislative Budget Committee puts the 2011 costs at $262 million.

But neither of these totals includes other care that's covered, such as pre- or postnatal doctor visits, pregnancy tests, ultrasounds or treatment for any problems that may arise before, during or shortly after delivery. Women in the program are covered during pregnancy and for 60 days after. Babies are covered for a year, and then can stay on AHCCCS if they qualify under the separate program for children.

Sen. Sylvia Allen, R-Snowflake, estimated that including pre- and postnatal care, it costs Arizona about $7,500 per birth for a delivery with no complications. Using those estimates, the 2011 deliveries would have cost Arizona taxpayers nearly $338 million.

One piece of the trend that has been debated is coverage of illegal immigrants. Some state lawmakers have criticized the fact that Arizona continues to pay for illegal-immigrant mothers to give birth, but federal law requires that the state cover labor and delivery costs as part of emergency care. Arizona is not among the 14 states that cover more extended prenatal care for illegal-immigrant women, according to Stoll. AHCCCS also does not track the number of or how much Arizona pays for labor and delivery services for illegal-immigrant mothers through the emergency-services program.

Behind the numbers

The demographics of Arizona women seeking assistance from AHCCCS for care during pregnancy has changed over the past decade, reflecting broad societal birth trends. A lower percentage of teen mothers and a higher percentage of mothers age 30 and older are enrolled in the program.

During that same period, there's been an increase in the percentage of White mothers giving birth on AHCCCS and a decrease in the percentage of Hispanic mothers. For example, 54 percent of the mothers in 2010 were Hispanic, compared with 59 percent in 2000.

An Arizona Department of Health Services report says key factors determining whether a woman seeks payment for a birth through AHCCCS include her education level and marital status. In 2010, most of the pregnant women in the program had no college education and 65 percent were unmarried.

Those statistics support experts' theory that the economy's effect on health insurance is pushing the number of Medicaid-funded births up.

Arizona covers pregnant women with incomes at or below 150 percent of the federal poverty level, or $28,635 annually for a family of three. Most states cover women whose family's annual income is higher.

According to the U.S. Census Bureau, 68.5 percent of Arizonans had private insurance and 10 percent were covered under Medicaid in 2000. In 2010, 58 percent had private insurance and 18 percent were on Medicaid.

More people are unemployed with no access to private insurance, more companies are electing to not offer insurance and more employees are choosing not to pay the rising costs of private insurance when it is offered, experts say.

And Stoll said women of childbearing age tend to fall into the category of those most likely to be hurt by an economic downturn. "Generally, they are young women, maybe starting out in a new career who may or may not be married," she said. "Their income is low."

Also, if they are unmarried, a job loss or pay cut affects their overall household income more than it would if they were in a two-income family. If they have no college education, they likely have lower-wage jobs that may not offer insurance.

Judith Solomon, vice president of health policy with the Washington, D.C.-based non-profit Center on Budget and Policy Priorities, said statistics show that pregnant women in these situations are turning to public health-care options.

Help from AHCCCS

Julian Vargas was born May 8 at Maricopa Medical Center, a month early and weighing just over 5 pounds, but in perfect health. His parents, Brenda and Alejandro Vargas, used AHCCCS to pay pregnancy and delivery costs. They also used AHCCCS for the births of their 4-year-old son and 2-year-old daughter.

"For a person not having AHCCCS, I can't imagine how hard it would be to even go see a doctor," said Brenda, 21.

Alejandro, 27, works full time as a carpet installer making $350 a week. Brenda, 21, is in school, training to become a medical assistant.

"We manage to pay for everything," Alejandro said, adding that they need help with health care.

Brenda said Julian wasn't planned, but they would have had him even without help from AHCCCS. She said that without state assistance, she would have been forced to drop out of school, go back to work and ask the hospital to allow them to go on a payment plan.

"I want to get a good education and better myself and my kids," she said. "And when I graduate I can get a job and help somebody else on AHCCCS."

Nada Gismelsiad, 26, who was expecting a girl, was sent to the hospital when she was 24 weeks pregnant because she was at risk of going into labor early. She stayed for more than two weeks. She continued to seek needed care for her condition until she gave birth.

Gismelsiad is unemployed, and her husband works at the airport. She said she doesn't know what she would do without AHCCCS. "I wouldn't know how to cover the bills for keeping me here," she said.

State response

While states including Arizona have cut some Medicaid services, they have generally maintained and even increased aid to pregnant women. Over the past 20 years, the Arizona Legislature has several times raised the income level required to qualify, and the state is above the federal minimum.

Studies over the past couple of decades show that mothers who receive early prenatal care have lower maternal-mortality rates, lower infant-mortality rates and give birth to healthier babies who grow into healthier kids and adults.

"There has been a lot of research that shows that an investment in prenatal care is extremely cost-effective," Salganicoff said. "For each dollar of prenatal care, you save $4."

But in Arizona, the reason for protecting the AHCCCS birth program may be as much about politics and a lack of awareness as any far-sighted plan to save the state money.

State lawmakers in key positions on legislative budget and health committees said they knew nothing of the trend, despite the information being at their fingertips. The Arizona Department of Health Services each fall releases a 500-page annual report documenting these and other state health trends. The 2010 report, available online, includes a graphic showing the rise in AHCCCS-funded births from 2000 to 2010.

Kavanagh, who was unaware of the trend until speaking with The Republic, said he'd like to find out more.

"There clearly is a serious cultural problem in this state and this nation if the numbers have risen," he said. "It's a yellow flag about the economy and society, and something that not only politicians but people from diverse disciplines need to look at and find out what's going wrong and how we can fix it."

Kavanagh wondered if Arizona was being too generous with the benefits, but said he'd need to look into it further. "If we compared these figures to 20 years ago or 10 years ago and we corrected benefit levels, do we have a difference?" he asked. "If the difference is truly caused by giving more people access to AHCCCS, then it could be a political question."

Most states cover women whose family income is higher than Arizona's $28,635 limit. Arkansas, for example, covers women with an income of less than $30,925 for a family of three; Iowa and Wisconsin cover women with an income of less than $57,270 for a family of three. Nine states, including Utah, Colorado and Nevada, cover women whose family's annual income is less than $25,390 for a family of three. That is the minimum allowed by federal law.

Sen. Linda Gray, R-Glendale, who for years has led the Senate human-services committee, also was unaware of the numbers. "Wow," she said when told of the increase in Medicaid-covered births.

But she said she believes this is more of an issue for the state's religious community to address than the Legislature. It's a matter of values, she said.

"It's a sad commentary that women are choosing through circumstance or whatever reason to go ahead and have sex prior to marriage or to not have a commitment to the other person to get married and take care of this child," she said. "I think it's more up to parents and the churches to encourage couples to become married and not up to government to do that."

Allen is the only state lawmaker to have broached the subject in recent years, and her effort got little attention. In 2011, she proposed a bill that would have required women on AHCCCS to contribute some co-payments for obstetric services, including delivery. Mothers would have paid a total of $300 to $2,000, depending on their income.

"I want us to have families, but what I'm concerned about is the state is struggling to pay these bills, and the federal government is struggling to pay these bills," Allen said. "Individuals have to be responsible. These are their children."

When Allen proposed her legislation early last year, AHCCCS chief legislative liaison Jennifer Carusetta told lawmakers that federal law precludes the state from requiring co-pays for AHCCCS services, and the bill died. No lawmaker proposed legislation this session addressing the issue.

Allen said with nine months' notice, families should be able to come up with money for some sort of co-pay or to pay at least some of the expenses.

"This is a situation where you have nine months to plan that child," she said. "You are making a choice to have a child."

Dana Wolfe Naimark, president of the Children's Action Alliance, said she finds that stance ironic coming from a Legislature that this session cut women's access to contraception services. The Republican-led Legislature also refused to hear bills proposing to expand sex education in schools and further limited abortion access. Naimark said several years ago there had been some discussion among children's advocacy groups to try to seek more federal funds for family planning. But she said in Arizona's current political climate, it's no longer discussed.

"It is a very, very sensitive question," Naimark said. "We have a lot of families in this state that earn very low incomes and it would be completely un-American to say those families don't deserve children."

AHCCCS pregnancy program

Arizona's Medicaid program, called Arizona Health Care Cost Containment System or AHCCCS, is funded by a combination of state and federal money.

Participating women do not pay anything toward their care.

Here are some of the covered services for U.S. citizens and legal residents:

Pregnancy test.

"Medically necessary" prenatal services, including regular pregnancy checkups and ultrasounds.

Treatment of pregnancy-related conditions, such as gestational diabetes.

Labor and delivery services, including up to a 48-hour hospital stay for vaginal delivery and a 96-hour stay for a Caesarean section.

Full health-care coverage for the mother for 60 days after delivery.

Full health-care coverage for the baby until he or she is 1 year old, including immunizations. Once the child reaches age 1, he or she may then qualify based on family income to remain on AHCCCS under the state programs for children. It does not cover circumcisions for newborn boys.