A TALE OF TWO STATES

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Charlene and Todd Weber, for instance, could never have handled caring for their daughter at home without the safety net provided by the Arizona system's long-term-care program, which guarantees aid to severely disabled children. In 1992 Charlene had twin girls, one of whom, Ariel, was born seriously disabled, with no genital body openings and many of her internal organs in the wrong place. Charlene, a part-time flight attendant for America West, and Todd, a supervisor in a waste-disposal company, have a combined income of about $45,000. Todd's employee health insurance, Intergroup, paid for all of Ariel's reconstructive surgery and hospital costs, but after the little girl left the hospital at the age of 14 months, Intergroup's coverage became much more limited. Yet Ariel's medical needs remained daunting: an array of physical and emotional therapies, a future cataract operation (both Ariel and her sister Aleah were born legally blind) and special schools. Ariel is the only Weber covered by Arizona's state program, which tries whenever possible to help families care for patients--both disabled and elderly--at home. "If they took away funding for this,'' says Charlene, "we'd be at the point where some parents consider giving up their kids to homes for the disabled. You can only take so much."

This long-term-care program also serves about 11,000 elderly people, either in their homes or in nursing care. Many of these people, like Medicaid recipients around the country, may have saved for their retirement, but their care remains either unaffordable or unmanageable. Lois Horn neglected her now bankrupt lamp business to care for her aging mother until the burden became too much. The 89-year-old mother currently lives, wheelchair bound and dementia-stricken, in the Carondelet Holy Family Center in Tucson, which costs more than $3,000 a month. "We don't have the money to pay for her care. She has to have assistance. I've given up taking her home for holidays, like I used to do, because you can't control her wandering," says Horn.

Arizona's big surprise is the effect the program has had on the state's doctors. The reimbursement rates are kept high enough so that they actually want to join. And health-care groups are raking in so much money--they took in $54 million in net profits last year, a 25% increase from 1993--that experts suggest that members of Arizona's "notch" population--the uninsured working poor--be added to the plan as well. But that is an unlikely outcome now. Even states like Arizona, which have created a lean Medicaid machine with very tight eligibility requirements, are facing the same federal budget cuts as states locked into traditional Medicaid programs.

If Arizona's plan is the wizened grandfather of them all, then Tennessee's is the cranky infant. In January 1994, less than two months after the Federal Government approved the state for a 1115 waiver, TennCare was under way. Perhaps the most ambitious state-waiver program in the nation, this managed-care system provides coverage to about 1.2 million people, or nearly one-quarter of the entire state. The breakdown: 750,000 Medicaid patients and an additional 400,000 people who were previously uninsured--a generous move that means funds are especially tight.