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AHCA Medicaid cuts will hit Arizona’s children harder than other states

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Last week, Rep. Heather Carter, R-Cave Creek, chairwoman of the House Health Committee, wrote that federal Medicaid cuts “threaten the progress Arizona has made in delivering quality, affordable health care to millions across our state.”

Phoenix Children’s Hospital agrees and, as Arizona’s only health care system focused exclusively on kids, can attest to the potential devastation the American Health Care Act’s proposed cuts would have on Arizona’s children – more than 50 percent of whom are impacted by Medicaid.

Robert Meyer

Robert Meyer

The proposal moving through the Senate toward an early July vote slashes federal funding by more than $800 billion over 10 years. An independent study by Avalere, a leading health care consulting firm, estimates that between $43 billion and $78 billion of that total would be cut from children’s health care, depending on whether a per-capita cap model or a block granting model is enacted.

Cuts of this nature will deeply affect our state’s most vulnerable children – those who are fighting serious illnesses who significantly depend on Medicaid to cover the cost of life-saving treatments not covered by private insurance, as well those in lower-income brackets.

Most states, including Arizona, rely heavily on federal funding to care for low-income and medically complex children. Today, states design their own Medicaid programs, with an average of two-thirds of funding coming from the federal government, and the state covering the last third. If the formula changes, the state will be forced to determine the haves and have nots.

Certainly, it’s important for our government to evaluate federal spending overall, improve efficiencies, and ensure the long-term solvency of programs like Medicaid. But Medicaid for children has already proven effective and efficient, especially in Arizona.

The nonpartisan National Bureau of Economic Research published a study in 2015 showing that the government recoups much of its investment in Medicaid for children in the form of higher future tax contributions. This is because children with access to health care through Medicaid are more likely to attend school regularly, graduate from high school and go to college, thereby becoming healthier adults who will earn higher wages than children who do not have appropriate health care as they grow.

While broad-sweeping cuts are potentially devastating to Medicaid, the Senate is currently discussing something that compounds the issue, a method for federal funding distribution that hurts Arizona exponentially more than other states.

Politico reports that Senate Republicans are “considering whether to vary Medicaid payment rates by state as part of an Obamacare repeal bill, potentially opening themselves up to a food fight between states for precious Medicaid dollars.”

The AHCA would use states’ 2016 spending as the basis for future Medicaid payments. In other words, states that posted higher costs in 2016 would get exponentially higher payments in the future. Ultimately, this punishes states that have reined in spending and focused on efficiency.

Current rankings show that Arizona’s Medicaid program is among the most efficient in the nation – more than 35 percent below states like New York that have posted much higher per-capita costs. Federal spending on Medicaid, on a per-capita basis, varies by a factor of 5:1 from the most generous states to the most austere, and this policy change would turn states like Arizona and Colorado into permanent donors to other states going forward.

Using the same base rate for all states means that those that are less efficient get more money, and those that are more efficient get less. Rather than cap and cut funding, we would like to see rewards for states like Arizona that have demonstrated efficiencies, not penalties for being cost-effective.

This misinformed strategy looks to pit state against state, leaving our elected officials to lobby for a decreased piece of the federal funding pie. If the Senate is considering a per-capita cap proposal, it should instead make provisions for states that have been the most responsible with taxpayer dollars by balancing the disparities with high-spending states.

This is not a level playing field. Costs should be reduced through innovation and improved care, not catch-all numbers that do not consider the individual nature of each state.

Arizonans are proud of their state, and care deeply about its future. This is why voters and both Republican and Democratic elected officials have voted to expand Medicaid at every possible turn over the past 20 years. With more than 636,000 Arizona children depending on Medicaid for health care coverage, imagine the long-term consequences of Washington’s choices to our state’s population.

Phoenix Children’s believes every child in Arizona should have access to high-quality health care. Medicaid is critical to this aim. We urge our state’s representatives – especially Senators McCain and Flake – to stand up for Arizona and its children, and ensure that we do not end up on the losing side of this battle.

Robert Meyer is president and CEO of Phoenix Children’s Hospital.

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The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.

One comment

  1. What did we expect would happen when we hand something as critical as healthcare over to unelected bureaucrats self-serving politicians?

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