Tag Archives: medicaid

121277693

Study: Arizona’s Medicaid Expansion Will Cost $1B

Arizona’s Medicaid expansion will cost the state’s taxpayers almost a billion dollars a year within a decade, according to a new study from Health Systems Innovation Network (HSI) and the National Center for Policy Analysis (NCPA).

Medicaid expansion is often touted as a “no brainer” for states, as the federal government promises to pay 100% of the costs through 2016 and 90% thereafter.  But, as the saying goes, there’s no such thing as a free lunch.

Medicaid expansion will cost Arizona taxpayers plenty, despite what they have been told by those supporting expansion of the program. Many people will drop private coverage to take advantage of the free public coverage.  The number of Medicaid enrollees will swell far above initial projections, and the cost to Arizona taxpayers will be higher than advertised:

·         The number of privately insured individuals could fall by 333,000 in 2014 alone. By 2023, there could be 450,000 fewer privately insured Arizonans than there would be without the Medicaid expansion.

·         The net number of Medicaid participants could increase by 1.07 million people in 2014 and by 1.65 million within the next 10 years.

·         The total cost to the state of covering these new Medicaid beneficiaries could reach $906 million annually within the next decade.

Arizona’s Governor Jan Brewer has insisted upon expanding Arizona’s Medicaid program, but the actual costs to Arizona taxpayers have been masked. In addition to the extra $906 million in annual Medicaid costs, the Affordable Care Act will significantly impact the cost of private insurance in Arizona, with some premiums nearly doubling over the next decade.

Brewer

Brewer’s Medicaid expansion plan secured

Arizona lawmakers have endorsed a key element of President Barack Obama’s health care law in a huge political victory for Republican Gov. Jan Brewer, after a lengthy fight over Medicaid expansion that divided the state’s Republican leadership.

The expansion that will extend health care to 300,000 more low-income Arizonans came after months of stalled negotiations, tense debates and political maneuvering as Brewer pushed the Medicaid proposal through a hostile Legislature.

She secured her victory Thursday after lawmakers passed Brewer’s $8.8 billion state budget that included the Medicaid expansion provided under a key provision of the Affordable Care Act. The Legislature’s Republican leadership called it “Chicago politics” and labeled Brewer a puppet master, but Brewer remained undeterred as she prepared to sign the measures into state law.

“The day has been a red-letter day for the people of Arizona,” Brewer told reporters after the budget votes Thursday. “It was a win, win, win all the way around.”

Brewer, an early critic of the Affordable Care Act, surprised the nation when she acknowledged the Medicaid expansion as the law of the land in her State of the State address in January. She noted that rejecting an expansion would mean Arizona taxpayers would subsidize care for those in other states while receiving no benefits themselves.

The expansion is expected to help reduce the amount of uncompensated care hospitals must absorb and help cut what Brewer called a hidden health care tax that people who buy insurance pay, through higher premiums, to cover others’ care.

After the Legislature secured her political win, Brewer softened her support for the health care law.

“Medicaid was here long before Obama health care. I have never liked Obama health care,” she told reporters after the vote. “It has nothing to do with Obama health care.”

The expansion is optional under last year’s Supreme Court decision upholding the health care law, and many Republican governors rejected it.

In all, 23 states plus Washington, D.C., are moving ahead with the expansion, while 15 states have turned it down. Another 12 states are still weighing options.

Nearly all the states refusing are led by Republicans. Several of the states accepting have Republican governors, but most are led by Democrats.

Washington will pick up the entire cost of the expansion for the first three years and 90 percent over the longer haul. It’s estimated that less than $100 billion in state spending could trigger nearly $1 trillion in federal dollars over a decade.

In Arizona, Republican leaders in the Legislature called the expansion a massive government overreach that would drive the federal government deeper into debt. They predicted the government promises of paying for the expansion would turn out to be false.

“This is the biggest mistake we’ve made in the Arizona Legislature this year and maybe ever,” said Republican Sen. Kelli Ward, of Lake Havasu City.

Republicans control the Legislature and all statewide elected offices in Arizona, but the Medicaid fight highlighted internal fractures between those who want smaller government and others who, like Brewer, who said broader health care access is good for the state.

“The bottom line here is greed,” said Sen. Al Melvin, a Tucson Republican who is running for governor and voted against the Medicaid expansion. “The people who want this know in their hearts that Obamacare is going to collapse under its own weight.”

A newly formed coalition of Democrats and moderate Republicans worked closely with Brewer to stand up to the conservative leaders who had blocked debate on the Medicaid expansion for six months. Lawmakers worked through the night Wednesday to get the plan through the House, and the Senate vote came hours later Thursday afternoon.

“I’ve never seen the case where a governor has rolled over her own party because she was throwing a temper tantrum,” said Republican Rep. Eddie Farnsworth, of Gilbert.

Senate President Andy Biggs said lawmakers had little information about what was in the budget before passing it.

“I am deeply and profoundly disappointed at the manner at which this came down,” he said.

Brewer dismissed the insults, predicting that all would be forgiven and Republican leaders would move forward together.

“Tomorrow they’ll probably say ‘I’m sorry’ or we will just forget it,” she said. “I just try to listen and let it go.”

It was a year of wins and losses for Arizona’s GOP.

The Legislature voted to adjourn its 2013 session early Friday morning after passing a slew of other bills, including an election overhaul that could make it more difficult for voters to obtain and return mail ballots. Biggs had to beg for extra votes to get the measure opposed by Democrats and voter outreach groups passed in the Senate.

Among the bills left on the floor was a proposal that would have prohibited abortion clinics from using Medicaid dollars to fund administrative costs and allowed for unannounced inspections, a top GOP priority.

Still, Brewer signed more than 100 bills advanced by conservative Republicans throughout the marathon session, including a measure that bars cities and counties from destroying guns turned over to police at community buyback events and instead requiring that they be resold. She also signed bills that will wildly increase campaign finance limits for state candidates and require unemployed workers to present documents showing they were fired before they can receive benefits.

Through it all, Brewer made it clear that the Medicaid expansion was her top priority. She held multiple rallies featuring low-income patients on the Arizona Capitol lawn and during the final month of the session, Brewer refused to sign any other bills until lawmakers passed a budget that included the health care expansion.

The Medicaid plan would cover people making between 100 percent and 138 percent of the federal poverty level and restore coverage to more than 100,000 childless adults who lost Medicaid coverage because of a state budget crunch. About 1.3 million Arizonans already are covered by the state’s plan.

Brewer

Brewer's Medicaid expansion plan secured

Arizona lawmakers have endorsed a key element of President Barack Obama’s health care law in a huge political victory for Republican Gov. Jan Brewer, after a lengthy fight over Medicaid expansion that divided the state’s Republican leadership.

The expansion that will extend health care to 300,000 more low-income Arizonans came after months of stalled negotiations, tense debates and political maneuvering as Brewer pushed the Medicaid proposal through a hostile Legislature.

She secured her victory Thursday after lawmakers passed Brewer’s $8.8 billion state budget that included the Medicaid expansion provided under a key provision of the Affordable Care Act. The Legislature’s Republican leadership called it “Chicago politics” and labeled Brewer a puppet master, but Brewer remained undeterred as she prepared to sign the measures into state law.

“The day has been a red-letter day for the people of Arizona,” Brewer told reporters after the budget votes Thursday. “It was a win, win, win all the way around.”

Brewer, an early critic of the Affordable Care Act, surprised the nation when she acknowledged the Medicaid expansion as the law of the land in her State of the State address in January. She noted that rejecting an expansion would mean Arizona taxpayers would subsidize care for those in other states while receiving no benefits themselves.

The expansion is expected to help reduce the amount of uncompensated care hospitals must absorb and help cut what Brewer called a hidden health care tax that people who buy insurance pay, through higher premiums, to cover others’ care.

After the Legislature secured her political win, Brewer softened her support for the health care law.

“Medicaid was here long before Obama health care. I have never liked Obama health care,” she told reporters after the vote. “It has nothing to do with Obama health care.”

The expansion is optional under last year’s Supreme Court decision upholding the health care law, and many Republican governors rejected it.

In all, 23 states plus Washington, D.C., are moving ahead with the expansion, while 15 states have turned it down. Another 12 states are still weighing options.

Nearly all the states refusing are led by Republicans. Several of the states accepting have Republican governors, but most are led by Democrats.

Washington will pick up the entire cost of the expansion for the first three years and 90 percent over the longer haul. It’s estimated that less than $100 billion in state spending could trigger nearly $1 trillion in federal dollars over a decade.

In Arizona, Republican leaders in the Legislature called the expansion a massive government overreach that would drive the federal government deeper into debt. They predicted the government promises of paying for the expansion would turn out to be false.

“This is the biggest mistake we’ve made in the Arizona Legislature this year and maybe ever,” said Republican Sen. Kelli Ward, of Lake Havasu City.

Republicans control the Legislature and all statewide elected offices in Arizona, but the Medicaid fight highlighted internal fractures between those who want smaller government and others who, like Brewer, who said broader health care access is good for the state.

“The bottom line here is greed,” said Sen. Al Melvin, a Tucson Republican who is running for governor and voted against the Medicaid expansion. “The people who want this know in their hearts that Obamacare is going to collapse under its own weight.”

A newly formed coalition of Democrats and moderate Republicans worked closely with Brewer to stand up to the conservative leaders who had blocked debate on the Medicaid expansion for six months. Lawmakers worked through the night Wednesday to get the plan through the House, and the Senate vote came hours later Thursday afternoon.

“I’ve never seen the case where a governor has rolled over her own party because she was throwing a temper tantrum,” said Republican Rep. Eddie Farnsworth, of Gilbert.

Senate President Andy Biggs said lawmakers had little information about what was in the budget before passing it.

“I am deeply and profoundly disappointed at the manner at which this came down,” he said.

Brewer dismissed the insults, predicting that all would be forgiven and Republican leaders would move forward together.

“Tomorrow they’ll probably say ‘I’m sorry’ or we will just forget it,” she said. “I just try to listen and let it go.”

It was a year of wins and losses for Arizona’s GOP.

The Legislature voted to adjourn its 2013 session early Friday morning after passing a slew of other bills, including an election overhaul that could make it more difficult for voters to obtain and return mail ballots. Biggs had to beg for extra votes to get the measure opposed by Democrats and voter outreach groups passed in the Senate.

Among the bills left on the floor was a proposal that would have prohibited abortion clinics from using Medicaid dollars to fund administrative costs and allowed for unannounced inspections, a top GOP priority.

Still, Brewer signed more than 100 bills advanced by conservative Republicans throughout the marathon session, including a measure that bars cities and counties from destroying guns turned over to police at community buyback events and instead requiring that they be resold. She also signed bills that will wildly increase campaign finance limits for state candidates and require unemployed workers to present documents showing they were fired before they can receive benefits.

Through it all, Brewer made it clear that the Medicaid expansion was her top priority. She held multiple rallies featuring low-income patients on the Arizona Capitol lawn and during the final month of the session, Brewer refused to sign any other bills until lawmakers passed a budget that included the health care expansion.

The Medicaid plan would cover people making between 100 percent and 138 percent of the federal poverty level and restore coverage to more than 100,000 childless adults who lost Medicaid coverage because of a state budget crunch. About 1.3 million Arizonans already are covered by the state’s plan.

medicaid program - new patient eligibility

Arizona Chamber Foundation issues Medicaid reports

The issue of Medicaid expansion continues to loom large in state policymaking circles, and the Arizona Chamber of Commerce and Industry’s research arm, the Arizona Chamber Foundation, has produced new reports on this important topic.

The Foundation recently released a new Policy Brief titled The Business Case for AHCCCS Expansion. The brief outlines the impact of cost shifting and hidden health care taxes on Arizona businesses, along with the effect expansion of the Arizona Health Care Cost Containment System – AHCCCS – will have on the state economy and budget. It’s an excellent overview of the issue and the reasoning behind the growing support from governors throughout the United States, including Governor Brewer.

In addition, the Foundation has released a FAQ sheet to help individuals better understand what AHCCCS is and what voters passed into law when they adopted Proposition 204 in 2000. It’s an outstanding primer on the state’s best-in-class Medicaid program, the ballot measure that extended coverage to childless adults and the challenges facing the state posed by uncompensated health care.

I encourage you to dig into both of these publications and to share them with your network.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

Download Understanding AHCCCS and Proposition 204 and The Business Case for AHCCCS Expansion.

Brewer

Brewer faces choice on Arizona health exchange

Gov. Jan Brewer is being pulled one way by major business groups and another by fellow conservatives as she faces a fast-approaching deadline to decide whether to implement a key part of the federal health care law.

The decision, due Friday, will determine if Arizona creates a state-run, online marketplace for consumers to use when choosing health plans, or lets the federal government create and run a so-called “exchange” for the state.

Brewer is among the Republican governors who oppose the law, but she has yet to indicate what course she’ll take.

Down the road, Brewer will face an equally hot-potato decision on whether to expand the state’s Medicaid program — another key aspect of the health care law.

Brewer’s administration has spent millions of dollars of federal grant money on planning and preliminary work for creating a health exchange.

Republican legislators and conservatives such as the Goldwater Institute say the requirement for an exchange is an infringement on the rights of states and individuals.

Meanwhile, a coalition of business groups wants Brewer to create a state exchange so Arizona has a say in in its design and funding.

“If we retain that control, we’re better able to customize and tweak and make adjustments,” said Pete Wertheim, a vice president of the Arizona Hospital and Healthcare Association.

Brewer already has selected a minimum benefits package for a state-run exchange based on current insurance coverage for state employees. She noted in a Sept. 28 letter to the Obama administration that the package excludes abortion coverage.

Brewer has said her administration has done a lot of planning to be prepared but also indicated she was still studying the issue and hadn’t made a decision.

“I’ve got to decide (whether) it’s the right thing for Arizona,” Brewer said while noting she will need legislative approval.

It’s clear that establishing a state-run exchange would put Brewer at odds with many Republicans in the Legislature, with no assurance that she would win the necessary approval.

“I don’t believe there are the votes in the House to pass something like this, so I don’t think this is going to go anywhere,” said House Appropriations Chairman John Kavanagh, a critic of the health care law and its penalties on some employers who don’t provide coverage to workers.

Senate Health Committee Chairman Nancy Barto offered a similar assessment of legislative leanings but said Brewer’s office “at least on the exchange seems committed to take a chance on Obamacare.”

“I would hope she wouldn’t do it without consideration of her party,” Barto said. “She has a record of standing up to the federal government and standing up for her party’s ideals, and this is a big part of that discussion.”

Proposing a state-run exchange wouldn’t be the first time Brewer has defied the wishes of most GOP lawmakers on a politically dicey issue.

After a year of trying, she was able to get lawmakers to put a temporary sales tax increase on a statewide ballot. Voters overwhelmingly approved it in 2010 to avoid deep cuts to schools and other services during the state’s budget crisis.

Brewer spokesman Matthew Benson declined to discuss what legislators’ “potential appetite” would be for having a state-run exchange.

On a related health care law issue with similar state-vs.-federal considerations, Brewer decided it was better to have the state run its own program to review health insurance rates than let the federal government handle it. The state has formally approved rules for a rate-review program.

Regarding the exchange, Brewer health policy adviser Don Hughes has said the governor wants to impose as few regulations and requirements on insurers as possible so it doesn’t turn into a duplicative regulator of the industry.

Conservative groups such as the Goldwater Institute and Americans for Prosperity are calling for Brewer to stiff-arm the federal law’s mandate for an exchange. Meanwhile, social-service advocacy groups are weighing in with calls for the state to create an exchange that is friendly to consumers on affordability, convenience and oversight.

“We’re optimistic that consumers will have influence in the design of it,” said Stephen Jennings, an AARP Arizona associate director.

AHCCCS Alternative - AZ Business Magazine July/August 2011

AzHHA Proposes Alternative To Medicaid Reform Plan, AHCCCS

AzHHA and other health care organizations propose an alternative to Gov. Brewer’s Medicaid reform plan, the Arizona Health Care Cost Containment System ( AHCCCS )

The economic recession has had an impact on industries across the board and health care in Arizona is no exception. Arizona hospitals have lost more than $700 million in state and federal Medicaid funds since 2008 due to previous payment cuts and freezes and another $530.7 million in cuts is headed to hospitals in fiscal year 2012, bringing the total cuts to $1.3 billion.

To address the state’s fiscal woes, the Legislature passed a budget that authorizes several reforms to Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS).

On March 15, 2011, Gov. Jan Brewer presented her plan, which includes reforms that will lower costs by an estimated $500 million in the State’s General Fund for the partial first year.

Included in these reforms is a phase-out plan for the Proposition 204 population — a voter-passed initiative that entitles anyone whose annual income is equal to or below the federal poverty level of $11,000 annually for an individual to AHCCCS coverage.

In a statement on the organization’s website, the Arizona Hospital and Healthcare Association (AZHHA) stated they are “deeply concerned that the budget will damage Arizona’s economy at a time when we are struggling mightily to recover from the recession. The budget authorizes the Arizona Health Care Containment System (AHCCCS) Administration to alter eligibility in a way that could result in 160,000 patients losing their healthcare coverage and financially harm the hospitals and healthcare professionals who will care for them when they become ill or injured.”

The most pertinent matters to AzHHA include: the 5 percent cut in all provider payments; the elimination of the Medical Expense Deduction program for patients with catastrophic illnesses and injuries; elimination of federal emergency services coverage for foreign national patients; and implementation of an inpatient bed day limit.

“Each of these proposals will increase the cost of uncompensated care hospitals provide, part of which will be passed on to patients with private health insurance,” says Laurie Liles, president and CEO of AzHHA.

“When AHCCCS and other government programs stop paying for care or pay hospitals significantly less than the cost of caring for their patients, hospitals must make up these losses elsewhere,” Liles adds. “Some hospitals — particularly those located in small, rural communities that operate on very slim margins and serve a high number of AHCCCS patients — have little ability to shift their costs to commercial plans. For those hospitals, the cumulative effect of the AHCCCS budget cuts will be devastating,”

As CEO of a hospital in a rural community, Tim Barnett of Yavapai Regional Medical Center understands this all too well: “Cutting expenses may seem like a good short-term solution but when those cuts are carefully and thoroughly analyzed, it’s clear that the long-term ramifications are potentially disastrous,” Barnett says. “It is far more prudent to think in terms of identifying additional sources of cash coming into our state for the benefit of all our residents.”

According to Barnett, Yavapai Regional Medical Center will lose at least $14 million annually from the cuts in AHCCCS funding.  This amount is more money than the center’s annual net revenue.  “We would have to look at very drastic changes in how we serve our community… The cuts would affect our ability to care for everyone, not just AHCCCS patients,” Barnett says.

Jim Dickson, CEO of Copper Queen Community Hospital in Bisbee agrees. “It will have a severe economic impact… They’re downsizing the healthcare system substantially, Arizona is already undeserved and we’re going even lower.”

On average, AHCCCS now pays hospitals less than 70 percent of the costs they sustain caring for Medicaid patients. Weathering the recession has been difficult enough and these additional cuts would force hospitals to cope with losses by delaying construction projects, some staff may experience salary freezes and furloughs, eliminating certain high-cost services, leaving vacant positions unfilled and more.

Though AzHHA supports Governor Brewer’s effort to preserve coverage for the existing Proposition 204 population, their goal is to maintain coverage for even more Arizona residents. AzHHA along with a coalition of Arizona hospitals, Medicaid health plans and skilled nursing facilities has proposed a viable alternative to the proposed reforms — a special health care assessment that would generate $465 million to protect coverage for low-income Arizonans.

“AzHHA believes the special healthcare assessment represents a fiscally responsible alternative to AHCCCS cuts included in the recently enacted state budget and the cuts included in the governor’s Medicaid Reform Plan,” Liles says.

AzHHA’s proposal, developed with the Arizona Association of Health Plans (AzAHP) and the Arizona Health Care Association (AHCA), would be tied to available funds and bring in $465 million annually, which would then generate two federal matching dollars for every one dollar from the assessments. The assessments would also stop reductions in health care provider rates, a component of Gov. Brewer’s proposal.

“Part of the federal match would be used to reimburse providers for the assessment, so there is no pressure to pass the assessment on to commercial insurers, business or patients,” Liles says. “The assessment is a ‘loan’ to the state to bring in additional federal dollars to help cover people enrolled in the Proposition 204 program.”

The federal matching funds would come from federal tax dollars that Arizonans are already paying and the assessment is considered to be a short-term solution through 2013 while the economy recovers. In the meantime, the organization plans to work with policy makers on a long-term plan to streamline Medicaid utilization and improve quality of care. Many of the hospitals that may otherwise be adversely affected by Gov. Brewer’s reforms have a positive outlook on the health care assessment.

“AzHHA’s proposal is definitely a good alternative… The best-case scenario would be for the legislature and the governor to work collaboratively along with AzHHA and its colleagues to implement the best solutions for patients,” Barnett says. Recognizing the economic difficulties Arizona is facing and a shared mission of helping heal the state’s economy is something Barnett hopes will bring both sides to a resolution.

“We’re blessed that we already have that solution developed…  AzHHA, nursing homes, Medicaid insurance plans and hospitals throughout Arizona are focused on how we can contribute to the solution and how we can help make Arizona an even better place to live and work,” he says.

AzHHA plans to work with policy makers to ensure that lawmakers reconsider their health care assessment and support this alternative to eliminating health care coverage and provider payment cuts.


AHCCCS Cuts Hurt Arizona’s Economy

  • The Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid program, is a shared matching program between the state and federal government. For every $1 the state puts in, the federal government matches it with $2.
  • A rollback of the Prop. 204 population would result in a loss of nearly $1.5 billion in state and federal funding. The annualized impact is $2.27 billion.
  • If Arizona chooses to opt-out of the Medicaid program, the state will be removing $7.2 billion in federal money from the economy.
  • Money spent on healthcare is a long-term investment that pays off. The healthcare sector is vast, and there are many large and small companies in various industries. It is also one of the only areas of the economy that has continued to grow throughout the recession.

 


AHCCCS Cuts Result in Job Losses

  • As lawmakers struggle to recover the 300,000 jobs lost during the current recession, cuts to the AHCCCS program undermine these efforts by causing more jobs to be lost.
  • Arizona currently holds a 9.4% unemployment rate.
  • Scaling back Prop. 204 will eliminate 13,568 private-sector healthcare jobs and 30,000 jobs across all areas of the private sector, as well as a reduction of $2.5 billion to the gross state product in the first full year of the rollback.
  • A total elimination of Arizona’s Medicaid program would result in a loss of 159,000 jobs, nearly 82,000 in healthcare alone. The healthcare jobs that will be affected are high quality, high-paying positions such as physicians, physician assistants, nurses, dentists, physical therapists, and behavioral health professionals.
  • These cuts and resulting job losses then create an access-to-care issue (particularly in rural areas) for all patients when services and the professionals who provide them are no longer available.

 


AHCCCS Cuts Create a Cost Shift to Arizona’s Businesses

  • Healthcare providers often respond to reductions in AHCCCS payments by shifting a portion of the cost to private payers and insurance companies, which results in higher premiums for Arizona’s businesses and the privately insured.
  • This cost shift limits the ability for businesses to grow and prosper.

 

Sources: The Potential Economic Impact of Withdrawing from Medicaid in Arizona. January 2011. W.P. Carey School of Business, Arizona State University.
Arizona Chamber of Commerce


Arizona Business Magazine July/August 2011