Arizona lawmakers weigh costs of medicaid cuts

Flagstaff, AZ – Last year Arizona made national headlines for cutting some organ transplants from its Medicaid coverage. Two people awaiting transplants have since died. But in general Arizona's health care program for the poor, called AHCCCS is pretty generous. For example, it's one of only seven states that covers adults without children. People like James Fors.

Fors has suffered from diabetes for 41 years, as well as chronic hypertension.

Now he has a busted knee cap that he's also rehabbing. Fors is 60. He used to run a home-based marketing business. But for the last year he's lived in a Flagstaff homeless shelter. Now he's caught in the crosshairs of Arizona's budget-balancing plan.

"In a single word it would kill me," he says, "not to have any state insurance. Because I can't live without any insulin, I'm on three different medications for hypertension."

Governor Jan Brewer has proposed taking away benefits for some 250,000 "childless adults" like Fors. She says the move would save Arizona more than a half billion dollars, about half its projected deficit for the next fiscal year.

"We simply don't have the money," she explains. "Hopefully some of those people can be changed and moved into other categories, in order to be eligible, but it's something that we just simply have to do."

Low-income adults without any kids often fall through cracks in the health care system, because Medicaid doesn't require that states cover them. That will change in 20-14, when the new health care law kicks in.

But until then, states like Pennsylvania and Washington have already removed adults from health care plans they finance themselves.

Samantha Artiga is a health policy analyst with the Kaiser Family Foundation. She says those choices, and Governor Brewer's proposal, have consequences.

"Increases in the uninsured will likely increase pressure on clinics," she says, "as well as uncompensated care for hospitals as people without coverage seek care."

Doctor Eric Henley, the Medical Director at North Country Community Health Care, says Brewer's plan "would be a really tremendous blow." About half of the patients at North Country rely on AHCCCS.

He says "We would have a great deal of difficulty figuring out how to make it work."

If Brewer's plan goes through, Henley estimates 20 percent of those patients would lose coverage. And Henley's not sure where they'll find the money to treat them.

"Taking care of the uninsured and underinsured is very costly," he explains. "And we sort of like make ends meet. We'd clearly not be able to provide the level of care and access across our system that we provide now."

Henley says when more people are uninsured, they put off routine check ups and tests. As a result, they often end up at the emergency room at nearby Flagstaff Medical Center.

CEO Bill Bradel says with the economic downturn, "We've seen people even not being able to take their chemo. That clearly is happening, and it's a concern of a lot of states that are having problems with their Medicaid program."

Arizona's plan is doubly painful for health care providers like Flagstaff Medical Center. The hospital estimates it will lose 13 million dollars in Medicaid reimbursements if the plan goes through.

And it would STILL have to take care of many of those patients who lose coverage, since it can't legally turn anyone away.

But chief financial officer Greg Kuzma says the hit to Arizona's health care system is a lot bigger.

"The governor predicts it will save 500 million dollars," he says, "but really what comes out of the health care community is 1.5 billion dollars, because when the state puts up a dollar of general fund money, they get matched with two dollars of federal money."

That match is the big fat carrot Washington has used to convince states to participate in Medicaid. But there are now some lawmakers in Arizona who don't want it anymore. State senator Andy Biggs has authored a plan to kill AHCCCS, and replace it with a much smaller and much cheaper plan.

"Is it painful?" he asks. "Absolutely it's painful. But we're going broke!"

A senate committee has already approved the plan. But Governor Brewer has said it goes too far. If it's approved the state would lose three billion dollars in federal funding funding that helps sustain rural hospitals like Flagstaff Medical Center, where 40 percent of the patients rely on Medicaid.