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Expansion foes urge state-only program for childless adults

Rep. Warren Petersen, R-Gilbert

Opponents of Gov. Jan Brewer’s Medicaid expansion plan proposed a state-only health care program for the remaining childless adults still covered by the Arizona Health Care Cost Containment System.

Taking a page from Brewer’s playbook, opponents rallied on the House lawn on Thursday to urge a rejection of the governor’s proposal to increase AHCCCS coverage to anyone earning up to 133 percent of the federal poverty level. And while the Ninth Floor and other proponents of the expansion have long warned that about 60,000 childless adults who are still receiving Medicaid benefits will lose their coverage at the end of the year, key GOP lawmakers proposed that the state simply pick up the tab if the feds won’t.

Senate President Andy Biggs, who has vowed to do everything in his power to prevent Brewer’s plan from reaching the Senate floor, said a state-only program for childless adults will give Arizona more control over the program, allowing the state to sidestep federal regulations that prohibit co-payments and deductibles for AHCCCS patients, as well as a federal court ruling that prevents Arizona from barring abortion providers such as Planned Parenthood from participating in AHCCCS.

“Whether the feds chip in or don’t chip in, this is the best option we have,” said Biggs, R-Gilbert. “We will control that medical program.”

Biggs and others said Arizona can use the $450 million rainy day fund to help fund the proposed state-only AHCCCS program for childless adults.

Expansion opponents such as Rep. Warren Petersen, who organized the rally, didn’t have any figures on what the state-only plan would cost. Petersen, R-Gilbert, said he was confident that the proposal would “absolutely” cost less than the state’s share of Brewer’s expansion proposal.

However, that doesn’t appear to be the case. According to estimates from the Joint Legislative Budget Committee, the state-only coverage for childless adults would cost about $807 million for the first three years of the program. The Governor’s Office estimates that it would cost about $862 million.

By contrast, the state’s share of Brewer’s Medicaid expansion proposal would cost about $286 million in the first three years while covering hundreds of thousands more people. Under Brewer’s plan, the state’s share would be paid through a provider tax on hospitals.

Brewer spokesman Matthew Benson rejected the state-only idea outright, saying it was not a viable alternative to the governor’s plan.

“That’s more than double our rainy day fund. So it would drain our rainy day fund in short order and it would quickly begin dipping into every other key service area for the state. It would compete with education, public safety, health and human services. You name it. It would crowd out other services,” Benson said.

Petersen did not immediately comment on the cost disparity.

Opponents of Brewer’s plan have long questioned the Ninth Floor and AHCCCS’s assertions that the federal government would refuse to renew its current agreement with Arizona when it expires at the end of the year. The agreement provides a two-to-one federal match for AHCCCS and allowed Arizona to implement an enrollment freeze on childless adults in 2011.

On Thursday morning, the feds answered the question. About 10 minutes before the rally started, the Governor’s Office announced that the U.S. Centers for Medicare and Medicaid Services informed the state that “we do not anticipate that we would authorize enrollment caps or similar policies.”

“It’s $850 million over three years to cover that cost because we know the federal government will not provide two-to-one matching dollars to do it anymore. We know that as of today with the guidance that the federal government has provided. That’s clear,” Benson said.

The dozens of expansion opponents who rallied against Brewer’s plan had concerns that went far beyond the fate of 60,000 childless adults who may lose coverage on Jan. 1.

Conservative opponents of the governor’s plan were skeptical of the Ninth Floor’s numbers on how much the expansion would cost the state. At the rally, they repeatedly cited the state’s massive underestimates of how many people would enroll in AHCCCS after voters’ 2000 approval of Proposition 204, which expanded coverage to all people earning up to 100 percent of the federal poverty level.

Christina Corieri, a health care policy analyst at the conservative Goldwater Institute, warned that the “circuit breaker” provision in Brewer’s plan, which eliminates the expansion program if the federal match drops below 80 percent – the match is currently set at 90 percent – could still leave Arizona on the hook for hundreds of millions more than anticipated, especially if the AHCCCS enrollment estimates are as incorrect as they were in 2000.

“Arizona would have a huge budget problem and no circuit breaker to save us,” she said.

Corieri also said the federal Simpson-Bowles commission has suggested eliminating the ability of states to pay for their share of Medicaid through a provider tax, a key element of Brewer’s plan. Even President Obama and top congressional Democrats have flirted with the idea, she said.

Other foes of Brewer’s plan repeated arguments that have become familiar as the two sides have traded barbs and talking points over the past two months.

Sen. Kelli Ward, a Lake Havasu City physician, said Arizona should reject the expansion so that people earning above 100 percent of the federal poverty level can obtain health care through health insurance exchanges, which will heavily subsidize the cost of insurance policies. Ward said that would be a better alternative than pushing more people into a substandard Medicaid program. She also said the state should embrace health savings accounts and catastrophic care policies as an alternative to expansion.

Rep. Justin Olson, R-Mesa, and Rep. Steve Montenegro, R-Litchfield Park, said the state should not implement an expansion that will provide more funding for Planned Parenthood and other abortion providers. Olson was the sponsor of a 2012 bill that barred abortion providers from participating in AHCCCS, but the law was thrown out by the U.S. District Court.

Petersen said Arizona should remember the lessons it learned from being the last state in the U.S. to create a Medicaid program, which he said allowed Arizona to learn from everyone else’s mistakes. Even if it ultimately expands Medicaid, it should wait and see how the program works elsewhere.

“Let’s not rush in this. The expansion will be there tomorrow,” Petersen said.





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