President Obama signed a $26.1 billion jobs and education stimulus bill Tuesday that leaves Arizona about $160 million short of what it needs to maintain its Medicaid program as required by federal law.
The bill includes only $236 million in new Medicaid dollars for the state, according to legislative budget staffers who review it. But it will take close to $400 million just to keep the program running as it is now -- and not kicking anyone off -- just through June 30.
And that doesn't include an estimated $1 billion gap for next fiscal year, according to Paul Senseman, press aide to Gov. Jan Brewer.
"This is a half-way effort to pay for the damage they're doing the states,'' said Paul Senseman, press aide to Gov. Jan Brewer.
He acknowledged that the debate in Washington was whether the federal government has the $26.1 billion itself to help the states, not only with Medicaid but also in funds to save the jobs of teachers and other government workers. Aside from the $236 million in Medicaid dollars, legislative budget staffers say Arizona is in line for about $208 million in education job funds.
"But the governor's request, and that of other governors, was, look, if you're not going to pay for your (health care) mandate, for crying out loud, at least allow us the opportunity to do what we have to do,'' Senseman said. That means trimming enrollment in the Arizona Health Care Cost Containment System, the state's Medicaid program.
"They continue to reject that,'' he said. "They want the program spending by states to be at a much higher level but they still don't want to pay for it.''
At the heart of the problem is Affordable Care Act, the national health care law enacted earlier this year.
Arizona gets money from Washington to help care for the poor, with the federal share about $2 for every $1 of state and local funds.
But Arizona also has a more generous program than required by federal law. For example, anyone below the federal poverty level -- about $18,310 a year for a family of three -- gets free care in Arizona; the federal cutoff is about a third of that.
Earlier this year, trying to balance the budget, lawmakers voted to scale back eligibility, eliminating care for about 310,000 Arizonans effective at the end of December. They also voted to eliminate the Kids Care program which is designed to provide nearly free health insurance for children of parents who earn too much to qualify for Medicaid but are still considered "working poor.''
While both programs are subsidized with federal funds, legislators said the state couldn't afford its share.
All that changed when Obama signed the federal health care law. It said all future Medicaid dollars are contingent on states maintaining their existing programs.
Lawmakers voted to restore both programs after legislative budget staffers said the annual loss to Arizona could hit $7.8 billion a year. But the presumption was that Congress would come up with the cash to make up the difference, at least in the short term.
The amount of Medicaid money in the bill Obama signed Tuesday leaves it up to Arizona lawmakers to find that extra $160-plus million.
Not everyone wants Arizona to find a way to make up the gap.
"We'd be better off not to take the stimulus,'' said Sen. Russell Pearce, R-Mesa. Pearce, who chairs the Senate Appropriations Committee, said the state could achieve even greater savings if it were freed from all the federal constraints.
For example, he said, Arizona could require a small co-pay every time those enrolled go to a doctor or emergency room.
"It forces people to be a little more responsible,'' Pearce said, cutting down on unnecessary visits.
The other part of what the president signed is for education. That piece will "support'' 4,000 education jobs in Arizona according to the U.S. Department of Education.
Teacher unions lobbied heavily for the funding.
In a prepared statement, Dennis Van Roekel, president of the National Education Association, said it will mean "less crowded classrooms, reinstated bus routes and restored education programs and services.''
Senseman said the education funding is largely a pass-through, with the cash going directly to eligible school districts.
Rep. Gabrielle Giffords, D-Ariz., said the legislation meets the demands by Republicans that any new spending be paid for with cuts or new revenues elsewhere. She said this package includes $17.7 billion in spending reductions and $9.8 billion in increased revenues by closing tax loopholes she said encourage U.S. corporations to ship jobs overseas.