Battle Looms On Adding 300,000 To Ahcccs

Lawmakers dubious about governor’s plan to expand medical care

“...  I urge legislators to take a step back and reflect upon the real, human impact of refusing to pass this critical legislation.”

Jan Brewer
Arizona Governor

“... I urge legislators to take a step back and reflect upon the real, human impact of refusing to pass this critical legislation.” Jan Brewer Arizona Governor Photo by Andy Towle. |

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Gov. Jan Brewer this week urged the state Legislature to accept federal subsidies to expand the Arizona Health Care Cost Containment System (AHCCCS) to cover about 300,000 additional residents — including many in Gila County, which has one of the highest premature death rates in the state.

Gov. Brewer maintains that the expansion of AHCCCS will inject an extra $8 billion into the state’s economy. The Arizona Hospital Association and many medical groups support the expansion, although Brewer has proposed a tax on hospitals to cover any cost to the state.

However, lawmakers like state Rep. Brenda Barton (R-Payson) remain deeply skeptical of Brewer’s plan to accept federal funding offered under the Affordable Care Act — widely known as “Obamacare.”

“As much as I would like to ensure the health care coverage of every resident of Arizona, there are some concerns with the governor’s current proposal and the program overall,” Barton wrote in a commentary running on today’s editorial page. She requested the Roundup run the commentary “without editorializing or editing.”

Requests e-mailed to Rim Country’s other representatives in the Legislature, Sen. Chester Crandell (R-Heber) and Rep. Bob Thorpe (R-Flagstaff) went unanswered. Both have previously expressed strong opposition to the state’s participation in the Affordable Care Act, which will impose a fine on people who don’t buy health insurance and offer subsidies for health plans based on income. Estimates suggest the program could in the next two years reduce the number of people without health insurance by about 32 million.

The U.S. Census Bureau estimates that about 50 million Americans lack health insurance, including an estimated 20 percent of Arizona residents. One estimate published in the Journal of Public Health estimated that the lack of health insurance causes about 48,000 premature deaths in the U.S. each year.

Barton echoed concerns by the Republican leadership in both the House and the Senate. The federal government would for the first three years cover the full cost of adding childless adults and families making up to 133 percent of a federal poverty wage to AHCCCS, which already provides coverage for 30 percent of Gila County residents. The Affordable Care Act legislation would then gradually reduce the federal match for the added population to about 90 percent. The federal government pays about two-thirds of the cost of the current AHCCCS population, mostly women and their children making up to 100 percent of a poverty-level wage who have no other source of medical insurance. About a quarter of the money AHCCCS spends provides nursing home care for impoverished seniors.

Barton argued that the federal government will renege on its promise to cover the cost of the roughly 300,000 people Brewer wants to add to the AHCCCS rolls.

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“The value of this bill lies in the ability to augment the budgets of political subdivisions with the sale of a high value asset.” Brenda Barton State representative

Barton predicted that the state will no sooner add 400,000 to 600,000 people to the AHCCCS rolls than the federal government will cut back to its normal two-thirds.

“This is in stark contrast to the $8 billion the governor is asserting Arizona will receive from the federal government. Is this simply more borrowing from overseas creditor nations? I honestly do not see the source of this federal windfall.”

Barton also predicted that many employers will drop their health care coverage, since she feels the cost of insurance will rise with the federal requirements to cover pre-existing conditions, preventative care and other required additions. She also said many “residents who are here without legal status” will gain coverage, although the Affordable Care Act specifically excludes undocumented residents.

She predicted that the reforms will cause all insurance premiums to rise by 20 to 100 percent, increasing the burden on the state.

In published reports, the non-partisan Congressional Budget Office predicted the new mandates would increase the cost of medical insurance by 10-13 percent. However, Aetna CEO Mark Bertolini has predicted a 20 to 50 percent increase. Young people could see increases of up to 100 percent, given the restrictions on the gap between the most expensive and least expensive rates based on age.

Brewer’s proposal anticipates getting the 100 percent federal funding for 300,000 childless adults for at least the next three years — which would bring in about $2 billion annually.

In a prepared statement, Gov. Brewer said, “As public officials, it is our duty to uphold the best interests of our state and the citizens we serve. I urge legislators to take a step back and reflect upon the real, human impact of refusing to pass this critical legislation.

“It’s simple. If we do not restore AHCCCS, hundreds of thousands of Arizonans will continue to lack health coverage, and nearly 60,000 more stand to lose coverage on January 1, 2014. There is no Plan B. I stand ready and willing to work with legislative colleagues to get this done for the people of Arizona.”

Her proposal includes a provision that would once again drop the childless adults if the federal match ever falls below 80 percent.

The Arizona Hospital and Healthcare Association supports the proposal as a way to reduce the cost of providing care for the uninsured. The Association says that uncompensated care accounted for 3.6 percent of hospital expenses before the state froze AHCCCS enrollment. But last year that figure jumped to 6.8 percent, the association estimates.

Brewer has said that since hospitals must charge insured patients more to cover those costs, caring for the uninsured amounts to a $2,000-per-family “hidden health care tax.”

Some hospitals that treat few AHCCCS or uninsured patients like the Mayo Clinic have objected to the proposed hospital tax, since they would reap relatively little benefit from the dramatic reduction in the ranks of the uninsured. However, Brewer has proposed giving the director of AHCCCS the authority to exempt certain hospitals from the tax on that basis.

Researchers from Arizona State University W.P. Carey School of Business have estimated that expanding AHCCCS as Brewer proposes would generate 2.712 new jobs in 2014, rising to 15,000 new jobs in 2016. The expansion would generate $42 million annually in added sales and income tax revenue to the state by 2016.

The Affordable Care Act and the AHCCCS expansion could bring extra benefits to Rim Country, where Payson Regional Medical Center reports nearly $1 million annually in uncompensated care.

The reforms include extra money for rural hospitals, both in increased payments and in programs to increase the number of doctors practicing in rural areas.

Rural Gila County not only suffers from a shortage of doctors, but its residents also face serious health challenges.

“Gila County residents fare poorly compared to other Arizona counties in a number of key health measures,” concluded a study by the Arizona Association of Community Health Centers prepared by Doug Hirano in 2010.

Gila County’s premature death rate is about 40 percent above the state average, which apparently stems mostly from higher rates of smoking, car crashes and diabetes.

Using a formula developed by the Robert Woods Johnson Foundation, Gila County ranked as the least healthy county in Arizona. The county also has an unusually high child poverty rate and high rates of smoking, drinking and births among its teenagers.

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