The 2000 decision by Arizona voters to provide free health care to more people could come around and bite state taxpayers in the financial backside.
Tom Betlach, director of the Arizona Health Care Cost Containment System, the state’s Medicaid program, said Monday the U.S. Senate version of health reform penalizes this state and a handful of others for being generous with who gets coverage. And now that the House is following suit, Betlach said, Arizona won’t get the same extra federal aid being offered to states with more limited plans.
But it’s even worse than that.
Betlach said Congress is moving to mandate that everyone have health care coverage. That, he said, would create a “woodwork” effect, bringing out people who are now eligible for AHCCCS but, until now, have not bothered to enroll.
Put into financial terms, these factors will put the cost to Arizona taxpayers in the first seven years of the Senate version of the program at $17 billion. By comparison, if Congress does nothing to expand health coverage, the state will spend just $15.4 billion over the same period.
And if voters had never expanded AHCCCS — and Arizona were eligible for all those extra federal dollars going to other states with less generous programs — the price tag for providing health care from 2014 through 2020 in the Senate bill would drop to just $1.4 billion.
The situation is far different, though, if the U.S. House version becomes law. That $15.4 billion “baseline” price tag drops to $6.7 billion over eight years — the House plan starts in 2013 — even with Arizona having a more expansive plan than most other states.
Here, too, though, there is a price to be paid for voter approval of an expanded AHCCCS program: If that 2000 ballot measure had gone down to defeat, the cost to Arizona under the House plan would drop to just $3.8 billion.
The problem relates to the fact that one key element in the congressional plans for universal health care is expansion of Medicaid.
Medicaid provides federal money for states to cover those who meet certain income standards, a figure Betlach said is around 22 percent of the federal poverty level. But that doesn’t include adults without children.
In 2000 Arizona voters agreed to cover everyone up to the federal poverty level with no exceptions. That figure now is $10,830 for a single person and $18,310 for a family of three.
Betlach estimates that about 320,000 of the nearly 1.3 million people now enrolled in AHCCCS are there solely because of the ballot measure.
Federal dollars make up about two-thirds of the cost of the program.
The House bill proposes to expand Medicaid to 150 percent of the federal poverty level; the Senate figure is 133 percent. And both propose to provide federal cash above the traditional 2-to-1 match for those who are “newly eligible.”
Betlach said the definition in the House bill of “newly eligible” means Arizona will get full federal cash until 2015 for not only those above 100 percent of federal poverty, but also those who AHCCCS covers but Medicaid does not mandate, such as childless adults. The federal subsidy then drops to 91 percent.
The bottom line, said Betlach, is that Arizona would spend $8.7 billion less if the House bill passes over that eight-year period than if there is no federal health care bill.
The Senate version, however, provides federal funds only for those “not currently eligible.” That, said Betlach, creates a special problem for Arizona, where there are probably 200,000 residents who could enroll in AHCCCS but never did.
Under the Senate plan, the federal government will continue to pick up its two-thirds share for both current and future enrollees. But Betlach said if just half of these 200,000 residents come out of the “woodwork” because of that to get health coverage, the state’s share of the costs, even after that 2-1 federal match still will be an additional $2.6 billion over seven years.
In other states where fewer people now qualify, the federal government will pick up the entire cost of those who can enroll under the higher income limits.
Betlach said Congress needs to understand what it is proposing is not only unfair but illogical.
“Why are you punishing a state like Arizona that pursued basically the policy that you’re trying to adopt,” he said.
The disparity has caught the attention of state Rep. Kyrsten Sinema, D-Phoenix, who has been working with the White House to push expanded health care. She said it’s not fair to penalize Arizona and other states who have provided better health coverage than the federal government has required until now.
“We should be rewarded or, at the very least, held harmless, because we’ve done a good job of taking care of people, more so than other states,” she said.
The problem, said Sinema, is political: It took some time and some political horse-trading for the Senate to come up with the necessary 60 votes for its plan. That, she said, will make it virtually impossible for the Senate to swallow the House plan — the one that treats Arizona better — when it goes to a conference committee.
But Sinema said she believes there is no way a majority of House members will support the Senate plan. And she said the White House will exert pressure to ensure that the final plan is fairer to Arizona and other states in a similar situation.