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Brewer unveils legislation to broaden Medicaid eligibility

March 12, 2013
The Republic | azcentral.com
Mary K. Reinhart

Gov. Jan Brewer released draft legislation Tuesday on her proposal to broaden eligibility for Medicaid under federal health-care reform, including a few items to appease the GOP legislators whose votes she needs to get it approved.

Flanked by Republican lawmakers, patients and health-care experts, Brewer headlined her second Capitol rally in two weeks on the politically dicey but critically important issue.

In unveiling a draft of the bill, supporters of the plan to expand the state-federal insurance program for the poor and disabled say it will launch the legislative debate and answer those who say they can’t decide whether to support the proposal because they haven’t seen a bill.

“It’s the starting point,” said House Health Committee Chairman Heather Carter, R-Cave Creek, who will help shepherd the bill through the House. “This is the most important health-care decision we’ve made in Arizona in the last 20 years.”

The measure, expected to be officially drafted as a budget bill in the coming weeks, includes no real surprises and all the elements Brewer has outlined:

Increases eligibility for the Arizona Health Care Cost Containment System, the state’s Medicaid program, to cover everyone earning less than 133 percent of the federal poverty level, or just less than $15,000 a year.

Provides a “circuit breaker” that rolls back coverage for those between 100 percent and 133 percent of poverty levels if federal funding falls below 80 percent of the expansion cost.

Gives AHCCCS authority to “establish, administer and collect” a hospital assessment that will raise an estimated $256 million to pay for the state’s share of expansion, with about $100 million left over for the general fund.

The draft also includes several clauses that could give GOP lawmakers some cover with constituents and party loyalists who oppose Medicaid expansion on principle.

That includes:

Prohibiting hospitals from passing the assessment, also called a provider tax, onto patients or private insurers.

Requiring AHCCCS to look for ways to get patients to pick up some of the costs through co-payments or other fees. Federal health officials and federal courts have thwarted most previous efforts, however, including mandatory copays.

Opportunity for public comment on the provider tax.

Medicaid expansion is the governor’s top legislative priority this year, but — like other GOP governors who have embraced this part of the federal health-care overhaul — she faces sharp opposition from her own party.

“This is where the rubber hits the road,” said lobbyist and former GOP lawmaker Chris Herstam, who represents Banner Health and Tucson Medical Center. “The bill is very basic, easy to understand and is a testimonial to Gov. Brewer’s political courage for making sure that Arizona gets its fair share of federal funds.”

A powerful pro-expansion coalition includes business leaders, the health-care industry and non-profit organizations, along with some of the state’s top lobbyists and political strategists.

But their resources and media campaign are being countered by grassroots Republican officials, who are passing resolutions and sending email blasts to legislators in vehement opposition to the governor’s Medicaid plan. Other opponents include the Goldwater Institute, a conservative Phoenix think tank, and national conservative activist group Americans for Prosperity.

Republican legislators also have suggested other bills and oversight, such as regular audits of the provider tax and tort reform, that could ease their concerns about the plan, the largest of which is that federal officials will renege on their agreement to pay for most of the expansion and Arizona will be left to pay for hundreds of thousands of new Medicaid recipients.

Federal law boosts funding for states that increase Medicaid eligibility and would add up to 17 million people to the Medicaid rolls. In Arizona, an estimated 400,000 more people would be insured in fiscal 2015, the first full year of expansion, including roughly 150,000 childless adults previously covered by a voter-approved expansion and about 57,000 people who would be newly eligible.

Expanding AHCCCS, which insured about 1.2 million Arizonans, would bring in about $1.6 billion in new federal funding in fiscal 2015.

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