Arizona to consider Medicaid expansion

January 02, 2013

Governor Jan Brewer’s decision in November to forego setting up a state-based health exchange as part of the Affordable Care Act set up another health care decision expected as soon as this month. And, as KJZZ’s Mark Brodie reports, that decision will likely affect hundreds of thousands of Arizonans.

MARK BRODIE: At issue is what to do with the state’s Medicaid program, known as AHCCCS.

BETSEY BAYLESS: Whatever happens with those people impacts our very survival.

BRODIE: That’s Betsey Bayless, the President and CEO of Maricopa Integrated Health System. She says her facilities have huge Medicaid populations – as high as 65 percent. They also treat a lot of patients without any insurance. Bayless estimates that population at close to a third of her 400,000 annual patients, but says it could swell to half.

BAYLESS: This growth of the uninsured is unsustainable. It’s unsustainable for the entire health care industry, and for us, it is much, much worse.

BRODIE: Here’s the issue: the state has the option, under the Affordable Care Act, to expand Medicaid to people up to 133 percent of the Federal Poverty Level – that’s a little more than $25,000 a year for a family of three as of last year. If Arizona decides to do that, the federal government will pay 85 percent of the cost, for at least a few years. The feds generally cover 66 percent of Medicaid costs. Byron Schlomach, though, says the expansion isn’t worth it.

BYRON SCHLOMACH: Bottom line, it’s an issue of fiscal responsibility, can we really afford this?

BRODIE: Schlomach is the Goldwater Institute’s Chief Economist.

SCHLOMACH: Now, what they’ll tell you is that you’re getting five dollars to one, or whatever it is. Well, that’s what it looks like. But again, let’s keep in mind, if you go and buy shoes 80 percent off, you’re still out that other 20 percent.

BRODIE: Schlomach’s concerns have been echoed by some Republicans at the state capitol. And, supporters of Medicaid expansion now say the options likely only include the state keeping AHCCCS as it is now, or expanding it fully under the Affordable Care Act. They say that’s because the feds recently told the state they would not offer more money to cover people whose enrollment has been frozen since 2011. So, hospitals and other providers are back to lobbying to expand Medicaid to cover people up to 133 percent of the poverty level.

PETE WERTHEIM: They are an enormous drain on the health care system, it’s not good for the business, quality of life. We believe as many people as we can should be covered by health insurance.

BRODIE: Pete Wertheim with the Arizona Hospital and Healthcare Association says if the state does nothing on Medicaid, 50,000 Arizonans will lose their health insurance on New Years’ Day 2014. And, it’s not just big, urban hospitals that could suffer.

RONA CURPHY: Those patients are being seen by us anyway, we are providing the care anyway, and we believe as a health care facility that we should get paid for the services that we render to patients.

BRODIE: Rona Curphy is the President and CEO of Casa Grande Regional Medical Center. She estimates a quarter of her patients are on AHCCCS, and that 5 to 7 percent of patients are uninsured.

CURPHY: Our facility has done very well at being able to ratchet our costs down, to be able to live on what Medicare pays us, what Medicaid pays us. But the issues are, we just need more of those patients that are now getting AHCCCS that aren’t getting it today.

BRODIE: AHCCCS estimates 65,000 more people would get health insurance if the state covered those up to 133 percent of the poverty level. The Goldwater Institute’s Byron Schlomach says he believes in a health insurance safety net. But, he says, the country already has one, and that expanding it would drive up prices for people who pay for their own health insurance.

SCHLOMACH: I’m just not sure that even with that 85 percent match from the federal government, that it would be worth the money at the state level. In fact, not only am I not sure about it, I think it’s a net negative.

CURPHY: I understand the financial risks.

BRODIE: Again, Casa Grande Regional Medical Center’s Rona Curphy.

CURPHY: But, we will be drawing down federal funds. And, I understand the federal issues, but if they’ve budgeted to make it work, why is Arizona not gonna take those federal funds to help our people in our state?

BRODIE: Health care providers also say that while it will cost Arizona money to cover more people under Medicaid, it’ll cost more if there are more Arizonans without health insurance.

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