by Ken Alltucker, and Mary K. Reinhart – Jul. 9, 2012 11:31 PM
The Republic | azcentral.com
As Texas Gov. Rick Perry becomes the sixth GOP governor to say his state will opt out of the federal health-care law’s Medicaid expansion, health-care providers, patients and business owners in Arizona are anxiously waiting to see whether Gov. Jan Brewer will follow suit.
Representatives of Brewer said Monday that she is still gathering information about the scope, expense and federal requirements that would accompany an expansion of Medicaid in Arizona.
The U.S. Supreme Court largely upheld the federal Affordable Care Act last month, including the backbone of the law that requires nearly everyone to obtain health insurance or pay a penalty.
But the high court also said the federal government can’t withhold Medicaid funding from states that refuse to expand the program, a part of the law intended to persuade states to add to their Medicaid rolls.
At stake is the largest-ever proposed expansion of the federal-state government insurance program mainly for low-income residents — a move that would have a far-reaching impact on the state’s health-care industry and private-sector employers.
If Brewer and state legislative leaders give the green light to expand Medicaid, an additional 325,000 low-income Arizonans would get health coverage during the first year of the expansion.
The federal government would pick up the vast majority of the tab for the initial expansion, but state budget analysts say it would still cost Arizona tens of millions of dollars.
Brewer’s representatives said the governor plans to meet with health-care leaders, including hospitals, doctors and insurers, before deciding whether to accept, reject or request a modified Medicaid expansion.
“The governor hasn’t made any long-term determinations in terms of whether she intends to expand Arizona’s Medicaid rolls. And we’ve got some time,” said Matthew Benson, Brewer’s press secretary.
The federal law calls for two main ways to extend health coverage to the estimated 30 million uninsured Americans. An expanded Medicaid program would cover everyone earning up to 133 percent of the federal poverty level — $30,657 for a family of four. The federal law also would establish health-insurance exchanges, where consumers could shop for policies.
In addition to expanding Medicaid, Brewer must decide whether to establish an Arizona-based exchange or cede that authority to the federal government. The governor’s staff has laid the groundwork for a health-insurance exchange to go live Oct. 1, 2013, but Brewer hasn’t decided whether to pursue an Arizona-based exchange.
“The governor will make a decision at some point whether she needs to move forward with a state-based exchange,” said Don Hughes, Brewer’s health policy adviser. “The planning and design work we have done to this point allows her to make a decision that is in the best interest of Arizona.”
Hughes added that the governor’s staff is still studying the fiscal impact a Medicaid expansion would have on Arizona and plans to submit questions to the Center for Medicare and Medicaid Services about the requirements and flexibility of a Medicaid expansion.
Arizona isn’t the only state asking questions. State Medicaid directors and the National Governor’s Association last week sent a raft of questions to federal health officials.
Could states broaden coverage less generously than the federal law allows? Will states be able to change course after the law takes effect in 2014 or phase in expanded coverage? Is expanding coverage to children optional above 100 percent of poverty?
Another question that Arizona still does not have an answer for: What’s the deadline for states to decide?
Hughes said Brewer also will seek input from health-care stakeholders, including hospitals, doctors and health insurers, to gauge the ramifications of the state forgoing the expansion of the Medicaid program.
Arizona hospitals and doctors in recent years have endured severe financial pressures from the bad economy and cuts to the Arizona Health Care Cost Containment System, the state’s Medicaid program.
Hospitals that serve the working poor and those without health insurance have viewed as pivotal the federal health-care law’s plan to extend coverage to most Arizonans beginning in 2014.
The economy and the state’s Medicaid cuts have been a “real killer” to hospitals and other health-care providers, said Susan Gerard, who chairs the board of Maricopa Integrated Health System, which operates Maricopa Medical Center.
“We knew the (health-care law) was coming, and we thought if we could just tread water until then, we could get through this,” Gerard said.
Gerard and hospital-industry officials said they are encouraged that Brewer, unlike Gov. Perry and other Republican governors, has not swiftly rejected the Medicaid expansion.
Reginald Ballantyne III, senior corporate officer of Vanguard Health Systems, said that Medicaid expansion is also an economic issue.
Hospitals and the health-care industry have been one of the few sectors to add jobs during the economic downturn. Also, cuts to Medicaid will prompt hospitals and health-care providers to pass along more costs to private insurers, potentially driving businesses and consumers’ health-insurance premiums higher.
“Health care is an economic engine, not just a social good,” said Ballantyne, former chairman of the American Hospital Association. “It is a driver of employment, capital investment and a focal point in attracting businesses to (Arizona).”
Arizona lawmakers are also weighing in on the possibility of expanding Medicaid.
House Speaker Andy Tobin, R-Paulden, has his mind made up. He wants no part of the Medicaid expansion, saying neither the state nor the country can afford it.
Although the Legislature’s makeup won’t be known until after November, Tobin said current members “aren’t anxious about expanding” Medicaid.
But House Minority Leader Chad Campbell, D-Phoenix, said talk of rejecting the federal government’s offer is “ideological grandstanding.”
“They continue to try to chip away at the health-care sector, and it makes no economic sense,” Campbell said. “And it’s an obligation that we have in this state to make sure that people have access to health care.”
Republic reporter Yvonne Wingett Sanchez contributed to this article.
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