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AHCCCS faces $1B budget deficit in FY12

Arizona’s Medicaid agency faces a $1 billion budget shortfall at the start of the 2012 fiscal year as stimulus assistance from the federal government expires, yet another sobering reminder of the fiscal fiasco Arizona is in.

An Arizona Health Care Cost Containment System spokeswoman said during a legislative hearing on Sept. 15 that the temporary increase in the federal share of Medicaid costs would end in June.

“Our stimulus dollars will completely terminate July 1, 2011,” said Monica Coury, who speaks for the agency.

For AHCCCS, that would mean a shortfall of $1 billion, Coury said.

Budget analysts have repeatedly pointed out that the state faces a budget cliff as soon as federal stimulus assistance ends beginning in fiscal year 2012.

The obvious challenge for lawmakers is to how maintain the existing Medicaid population given steep declines in revenue.

The March federal health law complicates matters since it requires states to keep existing health care programs, and violating these maintenance-of-effort requirements potentially jeopardizes billions of dollars in federal money.

Under the stimulus law, the federal government has increased its share of the Federal Medical Assistance Program to a 3-to-1 match.

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