Like most Republican politicians, Gov. Doug Ducey is publicly pining for the repeal of Obamacare.
In reality, the end of the Affordable Care Act would have heralded the beginning of a festering political and fiscal headache for Arizona’s governor.
And while he wouldn’t publicly admit it, the failure of U.S. House Speaker Paul Ryan’s Congress to pass the American Health Care Act has given Ducey room to breathe.
Had it been approved, the proposed Obamacare replacement would have crippled Arizona’s health care program, according to an analysis from the Arizona Health Care Cost Containment System, which runs Medicaid in the state.
Under the worst-case scenario, Arizona’s Medicaid rolls would drop by 383,000 through attrition, with state spending in the health care economy dipping by $2.5 billion by fiscal year 2023.
That’s largely because Arizona expanded its Medicaid program under Obamacare, and the American Health Care Act would have forced its contraction.
That’s also because unlike most states, Arizona voters mandated the state to provide health coverage to any resident earning up to 100 percent of the federal poverty level.
Under Obamacare, enhanced federal matching funds for the expansion population is paying for the publicly mandated health coverage of low-income Arizonans.
Regardless of Obamacare’s fate, Arizona’s government is still under the people’s dictum to insure its poorest citizens, although the courts have allowed cuts to this coverage in the past, ruling that whether funds are available to pay for the program is a question left to politicians to decide.
The American Health Care Act would have upended this intricate system, plunging the state government into a fiscal crisis and cornering its politicians in a quandary.
Indeed, had the Obamacare replacement passed, Ducey – presuming he wins re-election in 2018 – would have to make what likely would be the most difficult decision of his governorship at the start of his second term: Cut off health care for hundreds of thousands of Arizonans or put the state on the hook for nearly a half billion dollars to keep their coverage.
Leaving people without health insurance would have been politically unpalatable. But only a tax could realistically solve a half a billion dollar headache, since current state savings aren’t enough to pay for that amount beyond one year and there aren’t enough places to cut in government to sustain that much more in spending.
“Governor Ducey has long said Obamacare is a monumental failure and rolling disaster, and he would like to see it repealed,” Daniel Scarpinato, the governor’s spokesman, said in an email after Republicans pulled the American Health Care Act when it became clear it didn’t have the votes to pass.
“As efforts move forward, he will continue to advocate for Arizona having a seat at the table and for a replacement that puts patients first, increases competition and expands access to quality, affordable health care,” Scarpinato added.
In fact, many governors of expansion states urged caution as Congress forged ahead with its replace-and-repeal plan.
They sought flexibility and wanted Congress to ensure that Americans who are now getting care through the Affordable Care Act wouldn’t suddenly find themselves unable to afford it.
“I don’t want to see any Arizonans have the rug pulled out from under them,” Ducey told U.S. House Majority Leader Kevin McCarthy in January.
Ducey’s top advisers, in a letter sent to Congress, pleaded with Republican leaders to keep in place federal subsidies during the transition between Obamacare and its replacement, arguing that “failing to follow through on these federal promises would cause people to lose their plans, prices to increase, and more insurance companies leaving the fragile individual market.”
They cautioned against a block grant system, saying it would result in the “single largest transfer of risk ever from the federal government to the states.”
And yet the plan put forth by Ryan would have undercut the states’ ability to care for its most vulnerable populations.
The Congressional Budget Office had scored the American Health Care Act as amended, and concluded that it would result in savings over 10 years ($150 billion as opposed to the original version’s $337 billion), while still causing 24 million Americans to lose health care by 2026.
By that year, 52 million Americans would be uninsured, compared to 28 million under Obamacare.
“Essentially, (there’s) no real substantive change except the amendments have cut the net budget savings in half,” said Dave Wells of the Grand Canyon Institute, a centrist research group.
CBO also said the American Health Care Act will cut the Medicaid population by 17 percent. Applying that reduction number to Arizona would mean roughly 326,000 fewer uninsured Arizonans by 2026.
Given the way Arizona’s Medicaid expansion law is structured, that’s probably a conservative number.
AHCCCS’s analysis prompted Greg Vigdor, president of the Arizona Hospital and Healthcare Association, to say the congressional plan would have plunged Arizona into a crisis.
“We’re seeing nothing but bad news in how this would roll out,” he said.