The federal government’s healthcare reform law, the Affordable Care Act (ACA), asks states to expand their Medicaid programs to cover more low-income people. The 2012 U.S. Supreme Court decision upholding the act gave states flexiblity to decide whether to expand their programs.
About half of the states have committed to expanding. Gov. Jan Brewer has developed a proposal to expand the state’s Medicaid program, Arizona Health Care Cost Containment System (AHCCCS), which currently serves about 1.2 million low-income people.
The plan would add nearly 300,000 people, including 240,000 single adult workers whose incomes are 133 percent of the federal poverty level with a maximum annual income of $15,282. This expansion would cost the state $256 million, but Brewer’s proposal allows AHCCCS “to establish, administer, and collect a hospital assessment to cover this cost.”
The federal government would pay $1.5 billion or 100 percent of expansion costs for the next three years; then phase down to 90 percent by 2020.
Businesses in Arizona have rallied to support Brewer’s plan. Mike Hammond, chairman of the Southern Arizona Leadership Council, which represents 118 major employers, noted the reasons to favor the increased coverage in an editorial in the March 22 Arizona Daily Star.
Hammond pointed out that the state’s economy is still in recovery. The Medicaid expansion would bring at least $1.5 billion in additional federal money into Arizona’s economy annually. He also cited an Arizona State University study estimating the additional revenue would add 15,000 jobs, putting more Arizonans back to work.
By providing additional coverage through AHCCCS, Arizona would be competitive with other states in business recruitment. Healthier employees are more productive and save companies money in the long term.
“Medicaid expansion would keep Arizona’s tax dollars here rather than paying for healthcare programs in other states,” Hammond wrote.
Both Hammond and Arizona’s hospitals point out that the added coverage of low income people will lower health costs for most Arizonans with insurance.
Hospitals provide care for the uninsured in their emergency rooms. Those without health insurance generally wait until they are very sick before they seek treatment, which increases costs. This uncompensated care is added to the bills of those who have insurance.
The result is higher insurance premiums for businesses and individuals who pay for their coverage. According to the Arizona Alliance for Community Health Centers, the average added cost to a family’s private healthcare insurance is $1,700.
In 2012, Arizona hospitals saw a 75 percent increase in uncompensated care over 2011. People who disenrolled from AHCCCS did not leave Arizona, so hospitals are still providing their care. Rural hospitals are in danger of filing for bankruptcy due to this added burden.
Hospitals favor the expansion of Medicaid. In fact, they proposed the surcharge to pay for Arizona’s share of the costs if the legislature approves Governor Brewer’s plan.
Many Arizona legislators are skeptical of this Medicaid expansion. Under ACA, the federal government is to pay a match for the expansion but lawmakers fear Washington, D.C., could renege on future payments because of budget deficits.
Governor Brewer has included a “circuit breaker” in her plan that addresses that last matter. If the federal government were to stop payments, the state would also decrease the number of people covered.
AHCCCS is considered one of the most cost-effective Medicaid programs in the U.S., with “broad choice and greatly reduced fraud and waste. It has greater doctor, hospital, and provider participation than other states and is cheaper per enrollee per year than the average Medicaid program,” according to the Alliance.
The Medicaid expansion would help Arizona businesses and keep our hospitals solvent. All Arizona hospitals have been hit hard financially during the recession because of increased unemployment with subsequent loss of health insurance. The Legislature needs to do what is best for all Arizonans and pass Governor Brewer’s Medicaid plan.
Contact Carol West at firstname.lastname@example.org. West served on the Tucson City Council from 1999-2007 and was a council aide from 1987-1995.