Influential legislators today concluded that the federal government’s decision not to infuse more dollars to states that don’t fully comply with the Affordable Care Act dealt a major blow to any proposal in the upcoming session that would seek to restore health care cuts made during the height of the recession.
The U.S. Department of Health and Human Services this week said states won’t get an enhanced funding match if they merely opt for a partial Medicaid expansion. Instead, they must open the rolls to everyone who makes less than 133 percent of the federal poverty limit. For a family of four, that equates to roughly $31,000 a year.
The news is a disappointment to those in Arizona, particularly the health care industry, who had hoped the federal government would still shoulder a bigger share of the Medicaid costs if the state only restored coverage to its childless adult population. In 2011, the state froze enrollment for that group of people in a bid to trim costs as lawmakers grappled with billions of dollars in red ink.
For Senate President-elect Andy Biggs, who opposes any expansion of the Medicaid population, the federal department’s decision is likely the final nail in the coffin for any efforts to restore those cuts in the upcoming legislative session. Voters in 2000 approved Proposition 204, which mandated coverage of all Arizonans who make less than the federal poverty limit.
“It does make it harder,” Biggs said, arguing that restoring the cuts will dig a bigger budget hole.
Blaming the federal government’s “inflexibility,” House Appropriations Chairman John Kavanagh said it’s now “very, very difficult to expand” the Arizona Health Care Cost Containment System, the state’s Medicaid program.
Kavanagh said lawmakers were “cool” to the idea to begin with, and now the federal government effectively tripled the cost of any partial Medicaid expansion.
“It’s not going to happen,” Kavanagh said, adding the feds’ stridency also showed the wisdom of Brewer’s decision to forego the establishment of a state-run health insurance exchange.
Had the state been able to receive the enhanced federal matching rate for the Prop 204 population without fully expanding AHCCCS, legislative budget analysts estimated it would have cost Arizona taxpayers $135 million in fiscal year 2015. However, if the state receives only the standard matching rate for that group, analysts say it will cost $478 million.
Biggs said some policymakers might have considered restoring the cuts with an enhanced federal match since that would leave some money for public schools, which are clamoring for additional funding to replace money currently provided by a temporary one-cent sales tax that expires in May.
“If you spend $200 to $300 million (more) over here on the childless adults, all of a sudden, where do you find that money to spend on K-12 education?” Biggs said.
Other lawmakers also weren’t optimistic, but didn’t completely shut the door on a partial expansion.
Senate Appropriations Chairman Don Shooter said the lower match “certainly isn’t helpful,” but added that the state still must “do what’s prudent.”
“And I’m still trying to determine what that might be,” he said.
Pete Wertheim, a spokesman for the Arizona Hospital and Healthcare Association, agreed that federal government’s decision complicates the push by insurers and hospitals to restore those cuts.
“It’s certainly a big knife in the policy,” he said, adding the state may have to find “creative solutions” to the AHCCCS funding issue.
Reporter Jeremy Duda contributed to this report.