In his recent op-ed, ATRA President Kevin McCarthy called for a “healthy dose of intellectual honesty” in the debate over Gov. Jan Brewer’s plan to expand Arizona’s Medicaid program, otherwise known as AHCCCS, under Obamacare.
A good place to start would be to take an honest look at the ramifications of an expansion.
Far from a “relatively minor expansion” of 57,000 Arizonans, Brewer’s proposal could add as many as 450,000 people to AHCCCS. In addition to the expansion population, we will be adding those formerly eligible people who were frozen out in 2010.
Also of concern will be those new enrollees who were already eligible but had, for one reason or another, not yet signed up for the program. History tells us we can expect more of these people than expected to come out of the “woodwork” — after the Prop. 204 expansion in 2000, nearly double the estimated amount from this category were enrolled, costing the state of Arizona hundreds of millions of unanticipated money.
In addition to underestimating enrollment under the proposed expansion, it is also likely proponents have underestimated overall cost. The cost of the Prop. 204 expansion was overrunning projections by nearly four hundred percent by 2008 — again, costing Arizona hundreds of millions of dollars.
One of the principal arguments used by expansion proponents is that the cost of caring for the uninsured amounts to an additional $2,000 cost to your family’s insurance premium. However, in the seven years following the Medicaid expansion under Prop. 204, uncompensated care costs rose by an average of 9 percent annually — resulting in significantly higher insurance premiums for Arizona families.
Every Arizonan deserves to know why we should expect this expansion to be different.
A final concern is political.
Prop. 108, passed by voters in 1992, requires that any tax increase signed into law receive a two-thirds majority in the state Legislature. Expansion proponents insist that the provider “assessment” in the governor’s proposal doesn’t fall under that rule — but if they are allowed to fit a tax increase of hundreds of millions of dollars through a loophole, then the taxpayer protections of Prop. 108 would be rendered completely meaningless.
The simple truth is Arizona cannot afford to accept Governor Brewer’s expansion proposal. While proponents focus on assumed benefits in the first three years, they ignore the massive costs to the state of Arizona in the long term. The Kaiser Foundation projects costs to Arizona as much as $739 million from 2014-2019, due to significant increases in state Medicaid spending starting in 2017. If the state underestimates the cost of expansion — as it historically has — then any of the state’s share beyond what the provider tax brings will be borne completely by the general fund.
Moreover, the claim that AHCCCS is the nation’s most successful Medicaid program masks the fact that Arizona’s system is still dependent on a federal program which is hopelessly broken and delivers poor health outcomes.
Federal Medicaid spending is one of the major drivers of our massive budget deficits, and as that problem gets worse, it is inevitable that Washington will shift more and more of the burden for the program onto the states. In addition, study after study has shown that Medicaid patients have worse health outcomes than nearly every other group — sometimes even those without insurance at all.
The reason for this is poorer access to care.
Medicaid reimburses doctors at a significantly lower level than those with normal private insurance. Because they lose money on Medicaid patients, many doctors to not want to treat them — in Arizona, according to the Kaiser Foundation, that number is 23 percent. As Arizona doctors such as Jeff Singer and Sen. Kelli Ward have testified, this means patients often wait longer to get care, their health conditions worsen, and they seek treatment in emergency rooms (or, sometimes, they wait too long and there is little the doctor can do for them).
We cannot burden hardworking taxpayers with the cost of billions in new debt and what will be hundreds of millions in state spending to implement the expansion. And we certainly can’t put the most unfortunate among us at the mercy of a failing, bankrupt federal program from which we can expect little funding stability going forward.
To have an intellectually honest debate over this issue, we need to recognize there are many alternatives — both short-term and long-term — to expanding Medicaid under Obamacare. Those alternatives are beginning to be discussed and should be a part of a continued debate at the Arizona Legislature.
— Bill Fathauer is a state development officer with the Arizona chapter of Americans for Prosperity.