Gov. Jan Brewer made an official request for the feds to approve her Medicaid reform plan, submitting a proposal that would freeze enrollment for adults on AHCCCS, cut reimbursement to health care providers and scale back some benefits.
The plan, which Brewer submitted to the U.S. Centers for Medicare and Medicaid Services (CMS) on March 31, mostly mirrored the proposal she released in mid-March, with one major addition. Brewer said she would ask the Legislature to reinstate organ transplant coverage that was cut from AHCCCS in 2010.
The state would save an estimated $500 million from the plan.
The plan wouldn’t remove anyone currently receiving medical coverage from the Arizona Health Care Cost Containment System, but would likely eventually cut about 130,000 people through attrition. AHCCCS estimated that an enrollment freeze for childless adults would remove about 100,000 people from the AHCCCS rolls in 2012, while the enrollment freeze for parents who earn 75-100 percent of the federal poverty level would ultimately drop about 30,000 people.
Brewer’s proposal, released hours before the House was scheduled to begin debate on a budget package, stands in contrast to the Senate’s budget, which would cut about 280,000 people from AHCCCS.
The plan includes some provisions that the feds have already rejected, including the elimination of non-emergency transportation for AHCCCS patients in urban areas – rural areas wouldn’t be affected – and fees for missed medical appointments.
But in her letter to CMS and U.S. Health and Human Services Secretary Kathleen Sebelius, Brewer said her proposal might be the only thing holding back more draconian plans, such as the Senate’s budget or a bill that would dismantle AHCCCS altogether.
“Your partnership is critical to preserve Medicaid coverage for more than one million Arizonans,” Brewer wrote in her letter to Sebelius. “I have modified my initial proposal to preserve existing coverage to the greatest extent possible. But it will not be possible to achieve my proposed reforms – and limit the economic and human impact of necessary reductions – without your support.”
The biggest savings in Brewer’s plan would come from the enrollment freezes and the reductions in provider payments. The freeze on childless adults would save the state about $190 million – with another $17 million in savings from the partial freeze on parents – while Arizona would save about $95 million by reducing provider payments.
Arizona would save an additional $70 million by eliminating AHCCCS’s “spend-down” population – patients who temporarily qualify for Medicaid because of extraordinary medical expenses – and $40 million more by limiting in-patient hospital stays.
The plan would establish mandatory co-payments ranging from $2.30 for prescriptions to $25 for non-emergency use of emergency rooms. It would authorize health care providers to deny services to patients who do not make the co-payments, though AHCCCS spokeswoman Monica Coury said the co-pays could be waived for people who meet certain wellness criteria.
The plan aims to encourage personal responsibility among AHCCCS patients in other ways. Smokers would pay an annual $50 fee under the plan, as would obese patients and people with chronic diseases who didn’t meet benchmarks set by their doctors.
The waiver application Brewer sent to the feds said the purpose of those fees and the co-payments is to bring down costs and to determine if they promote healthiness in patients.
“The state is testing the use of mandatory co-payments in conjunction with use of incentives to promote heath behaviors and disease self-management,” the application said.
The restoration of transplant coverage, which requires legislative approval, would be a win for Democrats who made the transplants a key campaign issue in 2010. But some Democrats were skeptical of Brewer’s motives.
“She knows the feds aren’t going to give her everything she wants in her letter,” said Democratic Sen. Kyrsten Sinema. “She’s trying to use it as a way to get the Obama administration to let her make these other cuts.”
The plan would expire in 2014, when the Affordable Care Act fully goes into effect. The federal health care law requires all state Medicaid programs to cover anyone earning up to 133 percent of the federal poverty level.