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Gov. Brewer’s Medicaid expansion plan is sound fiscal management

Carolyn Allen

Gov. Jan Brewer has set as a top priority that the state expand Medicaid to become eligible for a nine-to-one federal match instead of the current two-to-one match.

Yet my fellow Republicans in the Legislature drag their feet even though the funds will come from a hospital assessment, not the general fund.  Senate President Andy Biggs has said he won’t bring the measure to a vote in his chamber, meaning senators who favor Medicaid expansion will need to go through complex parliamentary maneuvers to bypass him.

Instead, Senator Biggs says he’d reject federal money and use the rainy day fund to pay for health coverage for childless adults.  Let me get this straight; a state whose revenue is already taking a big hit this month with the end of the temporary one cent sales tax, and is not projected to increase through fiscal year 2016, and he wants to raid the rainy day fund?  Really!?

I thought conservative principles included sound fiscal management.  That’s what Medicaid expansion is.  For the state it means an infusion of $1.6 billion that the Grand Canyon Institute, on whose board I serve as vice chair, estimates will generate $2.7 billion in growth to the state, including an added $30 million to the general fund.  Since the hospitals are paying for expansion, the general fund will actually grow due to new Medicaid expansion. President Biggs, let me repeat, the general fund will see growth and the potential jobs are real. Really!!

Why would it make better sense to drain the rainy day fund and leave the state in a more precarious position and provide health care coverage to even fewer people in the process?

While the courts have said fully funding health care for childless adults, despite a mandate by voters to do so, is a political decision based on available money, that’s pretty loose legal ground if you’re actually advocating spending more money to cover less.  The Grand Canyon Institute finds that even if we take a scenario where the feds pay 80 percent instead of 90 percent of the added costs, doubling the state expense, it costs almost the same to cover 200,000 more people than Biggs proposes with his state-only operated program for childless adults and leaving those above 100 percent of the poverty line to purchase insurance on the federally-operated exchange.

What’s more, there’s a hidden cost.  If 200,000 more Arizonans lack health coverage, when any one of these uninsured adults needs medical aid, they won’t be able to cover the bill.  We’ve seen uncompensated care costs double for hospitals during the two years that the enrollment freeze has been in effect for childless adults for Medicaid.  Biggs’ obstruction would mean that becomes the norm.  Really, throwing the hospitals under the bus is good public policy?

The Grand Canyon Institute estimates we’ll get stuck with a bill every year of  $150 million in uncompensated care costs from failing to expand Medicaid, and part of that is likely to get passed on to those with private insurance.

In summary, Senator Biggs has proposed: 200,000 fewer people have health insurance, losing out on thousands of jobs, draining the rainy day fund, and costing the state more money from the general fund.  Plus public and private health providers and private insurance will get stuck with an added bill of $150 million.

Governor Brewer has made the right call here, and it’s time for my fellow Republicans to stop playing ideological games with Medicaid expansion, and do what’s best for the state’s long-term physical and fiscal health.

— Carolyn Allen is a former state lawmaker who is now vice chair of the Grand Canyon Institute, a centrist think tank, focusing on fiscal and economic policy issues in Arizona.

One comment

  1. Carolyn, I thought I’d just posted my comment. If it appears twice, please forgive the duplication.

    Congratulations on your to-the-point, hard hitting op/ed! I can’t see how anyone in their right mind could disagree with your salient points.

    Matt Laos just informed me (I believe) that the Governor’s bill has passed the Senate – hallelujah! My heart goes out to you, Matt Laos, Pete Wertheim and countless others who have worked so hard to make Medicaid expansion in Arizona a reality!

    John Newport, PhD
    Author and Tucson Citizen Columnist “Healing Tucson and Our Nation”
    Former health care administrator and senior level research associate in health policy analysis at UCLA School of Public Health

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