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Arizona Medicaid restoration makes good fiscal sense

April 12, 2013
Arizona Capitol Times
Kote Chundu

As the leader of a company representing hundreds of health care providers throughout metropolitan Phoenix, I support Governor Brewer’s bold plan to leverage federal matching funds and get health insurance to Arizona’s most economically vulnerable citizens.

I applaud Brewer for her courage and conviction with this visionary decision in helping our most vulnerable population and ensuring our long-term economic growth. Her commitment to providing access to health care for Arizonans is morally commendable, but her desire to do so in a fiscally-conservative way is equally laudable. Restoring Medicaid benefits not only the uninsured, but it also aids employers and individuals who purchase private health insurance, as well as hospitals and Arizona’s economy as a whole.

Costs for uncompensated care at our health care facilities are soaring and straining the system. These costs eventually find their way to Arizona taxpayers through higher insurance premiums, a dynamic that Brewer has dubbed the Hidden Health care Tax. With the governor’s plan, Arizona can secure a federal revenue stream to cover the costs of the uninsured that already show up in our doctors’ offices and emergency rooms.

The Arizona Health Care Cost Containment System (AHCCCS) is widely recognized as one of the most efficient, cost-effective health care systems for lower-income residents in the country.

The governor’s plan restores state cuts that have been made to the program in recent years due to the economic downturn and budget deficits. And it builds on the program’s strengths, without compromising it or handing it over to the federal government.

The governor’s unique proposal would add about 300,000 low-income Arizonans to the state’s Medicaid plan by invoking a modest hospital assessment — a technique already employed by 39 states across the country.

The hospital provider assessment would be used to leverage a larger amount of federal aid. It reminds me of the multiplier effect our state’s economic development officials tout to show how one new job generates multiples of other new jobs. All told, the governor’s plan will leverage about $10 from the federal government for every dollar put forward by the state of Arizona. As the governor says, “Do the math.”

If the state Legislature approves the plan, it will help ease the pressure on the state’s general fund budget and free-up resources for other important requirements such as Arizona’s education system.

The Governor’s Office estimates that the general fund will save $64 million in fiscal year 2014, $136 million in FY 2015 and $155 million in FY 2016.

Perhaps best of all, by taking advantage of available federal funds, it has the effect of returning Arizona’s tax dollars back home, rather than having them distributed to other states like California and New York.

Supporting the governor’s plan is not an endorsement of spending more money on health care services.  It’s about doing what’s best for Arizona by keeping our tax dollars at home, protecting our critical hospitals and caring for our working poor in the most cost-effective way possible.

Arizona voters have already said they want to expand AHCCCS coverage by twice approving ballot measures.  The governor’s plan keeps that promise to voters.

Personally, I’m not a huge fan of federal mandates, and I strongly believe that the Congress should control wasteful spending.  But the governor’s plan is neither a mandate nor wasteful. It’s sensible public policy.

Arizona has a rare opportunity to solve our state’s health care needs. I urge our state legislators to seize this moment.

— Kote Chundu is president & CEO of District Medical Group, a not-for-profit corporation representing 640 health care providers in metropolitan Phoenix.

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