Arizona’s economy would be devastated and roughly one in every five residents would be left without health care if the state ends its Medicaid program and loses $7 billion of federal funding, the state program’s director said Wednesday.
Under a bill approved by a Senate committee, the Arizona Health Care Cost Containment System would be abolished to help close a state budget shortfall.
The bill would replace AHCCCS with a greatly reduced system that would serve only a small fraction of the 1.3 million people now enrolled.
If that happens, unemployment would skyrocket and the state’s network of hospitals and other health care providers would be irreparably damaged, choking any growth of the state’s economy, said AHCCCS Director Tom Betlach.
A state-only system couldn’t even cover all of the 50,000 elderly and physically and development disabled people now enrolled, Betlach said.
“This bill does not even provide sufficient funding for our most frail citizens,” he said. “How do we care for these citizens? Where would they go?”
Doctors and other care providers would flee the state as the level of uncompensated care becomes untenable, Betlach said.
Betlach commented in written testimony submitted to the Senate Appropriations Committee before it voted 8-5 to drop the program. AHCCCS later released the testimony in response to a request by The Associated Press.
The bill goes to the full Senate after a legal review and discussions by party caucuses, but its prospects for passage were unclear. The vote happened in the wee hours of Wednesday morning after a marathon session dominated by immigration bills.
Gov. Jan Brewer, who has proposed that 250,000 people be dropped from program eligibility because of the state’s budget troubles, said Tuesday she wanted to protect care for the 1 million or so who would be left in the program.
The bill’s sponsor, Republican Sen. Andy Biggs, R-Gilbert, said AHCCCS is financially unsustainable because it serves too many people and strings put on the program by the federal government make it too costly.
Despite that, “there isn’t anybody that’s seriously talking about reform,” he said. “This is the solution that I’m bringing to the table.”
While all of the committee’s Democrats and one Republican voted against the bill, several of the Republicans who voted for it expressed unease at the prospect of actually making the major change envisioned by the bill.
Some of those lawmakers, however, said it’s clear that something must be done.
“We’ve got to be serious about this or we’re going to tax people to death” to support the current system, said Sen. Sylvia Allen, R-Snowflake.
Sen. Rich Crandall, a Mesa Republican who voted against the bill, predicted dire consequences if AHCCCS is eliminated.
“By Christmas time, there will not be a rural hospital open in the state of Arizona,” he said.
Prospects for Brewer’s own proposal advanced last week when U.S. Health and Human Services Secretary Kathleen Sebelius said Arizona has leeway to implement Brewer’s proposed eligibility reduction on Oct. 1 if the proposal is part of the state’s application for routine reauthorization for the state program.
Betlach told a House committee last month that full repeal “is not really a viable option.”
Texas officials reached the same conclusion when lawmakers in that state broached the idea of repealing Texas’ Medicaid program because of budget troubles.