Sat, July 20

Lawmakers try to reverse state health cuts

PHOENIX -- State lawmakers took the first steps Wednesday to reversing their decision to cut state-provided health care for about 350,000 adults and children.

But some of them didn't do it voluntarily.

And it may be only a temporary reprieve.

Rep. Nancy Barto, R-Phoenix, who supported the cuts made earlier this year, said she and other lawmakers have no choice. barto said federal officials warned the state that if they scale back existing programs to save some money they put at risk the entire $7.8 billion in Medicaid dollars Arizona gets each year.

And that, she said, would lose far more than the savings.

One part of SB 1043 reverses the vote by lawmakers earlier this year to scale back funding for the Arizona Health Care Cost Containment System.

The federal government provides about $2 for every $1 the state spends in health care for the poor. But federal law requires states which take that money to provide care only for those making about one third of the federal poverty level which now stands at about $18,300 a year for family of three.

In 2000, however, voters mandated the state to raise that to the full poverty level. The state's part of that increased cost was supposed to be paid, at least in part, from Arizona's share of a nationwide settlement with tobacco companies.

As it turned out, though, those dollars now total about $118 million a year; the additional annual cost to the state is running about $1.1 billion.

In a bid to trim the $2.6 billion deficit, lawmakers voted earlier this year to cut AHCCCS enrollment back to what the federal government mandates, plus whatever the tobacco settlement dollars will fund. That change, set to take effect Jan. 1, would eliminate care for 310,000, saving the state about $385 million for half a year.

On top of that, lawmakers voted to totally eliminate the Kids Care program effective June 15. That program provides nearly free care to about 36,000 children of the "working poor,' those who earn too much to qualify for AHCCCS but earn less than double the poverty level.

The federal government provides about $3 for every dollar of state funds. But Republican lawmakers and Gov. Jan Brewer concluded the state could not afford its $18 million share any more than Arizona can afford its share of AHCCCS funding.

All that changed, however, when Congress enacted the health care reform law. In the long run, that will provide extra cash to Arizona for health care and cover more people.

The problem comes in the short run.

Barto pointed out the federal law contains a "maintenance of effort' provision. Put simply, it says states that want any continued federal cash cannot reduce their health care programs below what they were on the date the president signed the measure into law. That covers not just any new dollars under the federal health care law but the funds already provided by Medicaid.

The proposal that was approved Wednesday is built on the premise that sometime between now and the end of the year Congress will provide some additional stimulus dollars to help states like Arizona pay for additional health care costs beyond Dec. 31. If that doesn't happen, the state will go ahead with its plan to drop the 310,000 people from AHCCCS.

But with the June 15 deadline approaching, lawmakers did agree to restore Kids Care funding unconditionally, even if additional federal aid does not materialize.

Barto said this legislation is a temporary fix at best, allowing Arizona to continue getting federal dollars for at least the time being. But she said that, at some point, lawmakers may decide that they just can't afford to keep taking federal dollars.

"The next legislature will evaluate our budget as a whole as well as our required healthcare coverage and determine if maintaining funding levels for this population is a prudent decision given the state s fiscal situation,' she said.