Debate Looming

Lawmakers dubious about governor’s AHCCCS plan

Governor Jan Brewer

Governor Jan Brewer Photo by Andy Towle. |

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Rim Country residents without health insurance could reap big benefits from Gov. Jan Brewer’s decision this week to buy into the federal Affordable Care Act — providing Republicans in the state Legislature go along with her plan.

In her State of the State address this week, Republican Gov. Brewer broke with many House and Senate Republicans by calling for the state to spend $154 million in the upcoming budget year to attract some $1.6 billion in federal money.

The increase would provide coverage for nearly 300,000 Arizona residents, including both families and childless adults earning up to 133 percent of a federal poverty level wage who don’t have health insurance.

Brewer stressed that the expansion of the Arizona Health Care Cost Containment System (AHCCCS) would boost the economy more than retaining Luke Air Force Base — while providing life-saving care to residents, mostly at federal expense.

In Gila County, 30 percent of the residents already rely on AHCCCS for their health care — including women and children living below the poverty line and impoverished nursing home residents. That percentage remains well above the state average.

Gov. Brewer has consistently opposed the implementation of the federal Affordable Care Act, but concluded that the state can’t afford to pass up the huge federal subsidies for states that expand their medical programs for the poor.

She proposed a tax on hospitals to raise the roughly $154 million needed to pay for the state match of 85-100 percent for childless adults and children living near the poverty line added to the program. However, she advocated including a provision that would pull out of the expanded program if the federal match ever falls below 80 percent. The federal government currently provides about 67 percent of the money for people now covered by AHCCCS.

State lawmakers reacted cautiously to the governor’s appeal for full participation in the Affordable Care Act.

State Sen. Chester Crandell (R-Heber) said he opposes the proposed expansion of AHCCCS. “I know that she’s got people who have run all the numbers and she paints a good picture for the expansion. But in the long term, the states are going to end up picking up $100 to $200 million for this. I’m not sure we can find that money down the road. And they start dictating what you can do and what you can’t do. My experience with the federal government is they change the rules on a whim.”

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State Sen. Chester Crandell and House Rep. Brenda Barton both are skeptical of the governor’s proposed expansion of health coverage for the working poor through AHCCCS.

State Rep. Brenda Barton (R-Payson) said, “I applaud the governor’s desire to do the right thing, however, it is unclear what her plans might be should the state be unable to retract Arizona’s full expansion of Medicaid if national funding falls below the 85 percent threshold she is proposing. My concern is that the Affordable Health Care Act provides 100 percent funding for the first several years, thereafter the national funding is reduced, leaving the state responsible for a minimum of 10 percent of future funding. And there’s the rub. Once we begin increasing funding for education this year, as I hope to do, will we be able to maintain both our educational funding as well as picking up the increased Medicaid costs simultaneously come 2016?”

Gov. Brewer’s office released a report making the case for the AHCCCS expansion.

The state has cut some $1.8 billion from health care programs for poor and working class residents in the past few years — most of it federal money lost when the state cut matching funds to balance its budget while cutting taxes in the recession. The cuts overrode a voter-approved initiative and dropped some 141,000 impoverished, childless adults from the AHCCCS rolls. The Legislature also cut about 50,000 children in families making up to 133 percent of a poverty level wage from the AHCCCS rolls. That included at least 500 children in Gila County who lost their medical coverage.

The state had hoped to restore the impoverished, childless adults and take advantage of the promised 100 percent federal subsidy. However, the federal Department of Health Services said the state could get the enhanced Affordable Care Act subsidy if it boosted coverage all the way to 133 percent of the federal poverty line for both families and individuals.

The federal poverty line in 2012 was $11,170 for a single person and $23,050 for a family of four.

If the state opts out of the expansion, another 50,000 people would lose their coverage. If it participates, not only will the 50,000 people keep coverage — but another 240,000 will gain coverage.

Studies have demonstrated that when Arizona had initially expanded its insurance coverage for impoverished, childless adults, death rates dropped about 6 percent. The federal Centers for Disease Control estimates that a lack of medical insurance causes about 45,000 premature deaths annually.

Gov. Brewer maintained that expanding AHCCCS with the federal match would boost the economy, which from 2007 to 2009 lost 300,000 jobs. The state’s economy has since gained back only a third of the lost jobs.

The downturn drove so many people into poverty that the cost of AHCCCS has risen steadily, despite the cuts in state budget and AHCCCS eligibility. In 2007, AHCCCS accounted for 17 percent of state general fund spending. In 2013, it has grown to 25 percent of state spending. Education held steady at 41 percent, prisons rose from 8 percent to 11 percent and universities declined from 10 percent to 8 percent in that same period. All “other” programs declined from 23 percent to 11 percent — while debt service rose from 1 percent to 4 percent.

Gov. Brewer wants to tax hospitals to raise the money for the state’s share. Most hospitals should gain a substantial benefit from providing insurance for 300,000 residents. For instance, Payson Regional Medical Center writes off about $1 million annually in uncompensated care.

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