State-Federal Standoff Costly For Uninsured

Arizona unlikely to expand AHCCCS, leaving large number of Gila County families without medical coverage

Governor Jan Brewer

Governor Jan Brewer Photo by Andy Towle. |

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The standoff between Arizona Gov. Jan Brewer and the federal government over health care will likely deny thousands of Gila County residents health coverage.

Brewer recently notified the federal government that despite spending millions in federal grants so far, Arizona won’t set up an insurance exchange to help people buy health coverage and likely won’t fully expand coverage required by the Affordable Care Act.

Brewer concluded that the state couldn’t afford the extra costs of setting up an exchange, which she said would be so tightly controlled by the federal government that the state wouldn’t have much autonomy in running the system anyway.

The federal government responded by saying it would set up the exchange in Arizona and 16 other states that have refused to participate. And if Arizona doesn’t fully expand AHCCCS coverage to people making less than 133 percent of the poverty level, it won’t get the almost 100 percent coverage for any groups it does add.

As a result, leaders in the Legislature have said they will likely leave the coverage limit at the poverty line for only women and their children, dooming hopes the state would restore coverage that knocked 100,000 people off AHCCCS two years ago.

The decision will likely hit hard in Gila County, where 30 percent of the population relies on AHCCCS for coverage — most of them women, children and impoverished nursing home residents.

Recent cutbacks have already knocked thousands of Gila County residents off the AHCCCS rolls.

The state Legislature shut down a voter-approved expansion of the program to cover impoverished, childless adults and children without health insurance in families making up to 133 percent of the federal poverty level — which is about $31,000 for a family of four. The poverty line stands at about $22,000 annually for a family of four.

Eliminating some 100,000 from the program saved the state about $1 billion, but at the cost of about $2 billion in matching federal funding. Normally, the federal government covers about two-thirds of the cost of the program. The federal government will pay 100 percent of the cost of people added to the health care rolls for the first couple of years after the Affordable Care Act takes place.

That earlier state decision in Gila County reduced the number of children covered by about 500 and the number of childless adults covered by several thousand, according to state estimates.

Brewer had hoped that the federal government would agree to pay 100 percent of the cost of restoring the people cut in the past few years — including impoverished, childless adults and children in families with incomes up to 133 percent of the poverty level.

However, the federal government instead said it would provide the 100 percent payment only if the state provided AHCCCS coverage for anyone without insurance making up to 133 percent of a poverty wage.

With the more generous federal match, it would cost the state about $135 million to restore the people cut during the budget crisis. Without the standard federal match, it would cost the state closer to $500 million, say state officials.

Top state Republican legislative leaders have said that without the 100 percent federal match, they will not support restoring the health coverage cuts.

The federal government can’t force any state to expand its Medicaid program, thanks to the U.S. Supreme Court decision that upheld most of the provisions of the Affordable Care Act. That decision said that the federal government couldn’t threaten to cut existing Medicaid funding if states refused to expand eligibility.

The deadlock will likely cost lives, according to the results of a New England Journal of Medicine study.

That study examined death rates in Arizona and other states that had expanded eligibility. The study found a 6 percent drop in the death rate, which the researchers attributed to the expanded health coverage. The Legislature subsequently eliminated the expanded coverage.

Other national studies attribute about 45,000 premature deaths annually to the lack of medical insurance. That’s about three times as many Americans who die as a result of murder each year.

Arizona has one of the highest uninsured rates in the country —and Gila County among the highest in the state.

About 51 million Americans lack health insurance. Estimates suggest the Affordable Care Act would reduce that total by about 32 million. However, many of those gains rely on the expansion of state Medicaid programs.

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