State Capitol News
8:01 am
Wed March 13, 2013

First Look At Governor's Medicaid Expansion Plan

Governor Jan Brewer gave state lawmakers their first detailed look at her plan to expand Medicaid. But Arizona Public Radio's Howard Fischer reports the governor has an uphill fight - especially in her own party.

The legislation contains the basics of what she proposed in January in her surprise announcement during her State of the State speech: Boost eligibility for the free health care to what amounts to 138% of the federal poverty level - about $26,000 a year for a family of 3. That's up 100% for most. The $240 million first-year cost to the state would be paid through what amounts to a tax on hospitals. The trade-off is Washington will provide $1.6 billion in federal dollars, and about 300,000 people will be added to the Arizona Health Care Cost Containment System, the state's Medicaid program, which already has about 1.2 million Arizonans enrolled.

But many Republicans aren't yet convinced. So the governor held a rally yesterday on the Capitol lawn, part of her plan to build that support. She told rally-goers, "I believe that by educating and talking to people and sitting down, spreading what this all means to the state of Arizona, could very well change their minds, also. So we're just going to keep working away."

But House Speaker Andy Tobin has pronounced the legislation in its current form dead on arrival without some changes. That apparently left Brewer somewhat confounded. She asked the crowd, "what does Speaker Tobin want? What does he want?"

Tobin told Arizona Public Radio he has a couple of key problems with the measure. He noted proponents of the plan cite a $2,000 hidden health care tax on every Arizonan, costs hospitals pass along to their paying patients and insurance companies to make up for what they do not get from the uninsured. He said if the Medicaid expansion results in more people with coverage, there should be some guarantee that hospitals will stop passing along those higher costs. "Wouldn't you think for a moment they shouldn't be able to increase them to the commercial sector?" Tobin asked. "The crisis is there's really no number to health care. The crisis is they figured out exactly what they need every year at the end of the previous year."

There's also Brewer's end-run around a constitutional provision which requires a two-thirds vote for any tax hike. Both Tobin and Senate President Andy Biggs say that's exactly what's being imposed on hospitals to pay the state's share. But Brewer structured the legislation to allows the AHCCCS director to impose an annual "assessment" on hospitals and determine how much each must pay. And assessment authorization needs only a simple majority. But Tobin said he believes it's unconstitutional to put that much power in the hands of a state agency chief without legislative oversight.

In her pitch, Governor Brewer contends the deal is too good to pass up. And she rejected the idea that Arizona's participation in what foes have dubbed Obama-care only worsens the nearly $1.7 trillion federal deficit. "It will throw a lifeline to a safety net in rural hospitals struggling with the cost of caring for the uninsured," the governor said. "And it will keep Arizona's tax dollars here at home rather than allowing them to go to Washington to be spent on who knows what."

Brewer already has some GOP support, including state Senator Steve Pierce of Prescott. "If a safety net hospital in Phoenix were to close," Pierce said, "it would be a problem. But if it closes in Prescott, that's the only hospital there. If it closes in Show Low, that's the only hospital. The rural hospitals of Show Low, Cottonwood, Flagstaff, Prescott, Yavapai Regional, we need this. We need this bad."