The federal government has told Arizona that it will not be able to continue cuts to its Medicaid program beyond the end of the year if it hopes to receive federal funding for a voter-approved expansion of the program.
Gov. Jan Brewer informed lawmakers of the federal government’s decision today in a letter in which she called on them to support her plan to pay for an expansion of the AHCCCS program by assessing a fee on health care providers in order to receive $8 billion in federal funding over the next three years.
In 2011 when the state was facing more than $1 billion in deficit, lawmakers placed a freeze on AHCCCS enrollment for childless adults making up to 100 percent of the federal poverty limit. In 2002, voters approved Proposition 204, which expanded AHCCCS to include those people.
Some critics of Brewer’s expansion proposal have said the state should maintain the enrollment freeze and see if the federal government would continue to provide Arizona with a two-to-one match on money spent to provide health care to that population.
“I know that many of you have been awaiting clear federal guidance in response to this key question. We now have it, and the answer is: ‘No,’” Brewer wrote in a letter sent today to all 90 legislators.
The governor advised lawmakers that there are now four options.
The state could continue the Prop 204 enrollment freeze and cover the remaining childless adults with only state funds at an estimated cost of $850 million over the next three years.
“This is neither cost-effective nor sound policy. It also violates the clear intent of Arizona voters who, with passage of Proposition 204 in 2000, expressed their will to provide AHCCCS coverage to childless adults living below the Federal Poverty Limit,” Brewer wrote.
The state could also end the enrollment freeze and reinstate the two-to-one matching funds, although doing so would cost the state an estimated $1.3 billion over three years, something Brewer said would strain the state’s general fund and “put critical state functions at risk.”
The third option in Brewer’s letter is to eliminate AHCCCS coverage of childless adults and stop paying for the 63,000 people currently enrolled in the program. While that would cost the state nothing, it would immediately end treatment for 5,000 cancer patients and 2,000 people with serious mental illnesses. Additionally, it would fly in the face of the 2000 measure voters approved.
“For these reasons and others, this option is morally repugnant and fiscally irresponsible,” Brewer wrote.
Finally, the governor said lawmakers could enact her expansion plan, which would save the general fund $100 million over three years.
“(T)oday’s clear guidance from CMS makes it apparent there is really only one viable alternative: the Restoration Plan already before you. It is time for us to complete the people’s work,” Brewer wrote.