OP ED: Why I Supported Medicaid Expansion

17 August 2014   Senator Steve Pierce
Sometimes you have to choose between two poor options.

This year, one of the biggest campaign issues is Obama Care or the Affordable Care Act, ACA. Yes, it's bad. I don't care for it and I know all of the Republicans in the Arizona State Senate caucus don't like it and don't support it.

Some believe it will cost the general fund more than we can afford in the future. That's simply not true. What was done in Arizona was not approval of Obama Care but the approval of Medicaid restoration and expansion of AHCCCS, period. (Medicaid is a government insurance program for persons of all ages whose income and resources are insufficient to pay for health care and not to be confused with Medicare.) Those that opposed this continue to say we cannot afford this in Arizona over the next 3 or 4 years. Again, this is wrong and completely mis-understood and untrue. I believed this myself until I researched it and found the following information that needs to be explained to the public.

Medicaid, or Arizona Health Care Cost Containment System, AHCCCS, should not affect the State's General Fund in the next 3 or 4 years.  In fact, federal funding grows.  Here is a brief explanation of the federal match, which itself, is complicated.

For the restoration population (0-100% Federal Poverty Level (FPL) which AZ was required by law to do, as voted on by the public), the federal match is;
83% in year one,
86% in year two,
89% in years three and four,
91% in year five,
93% in year six and
90% each year thereafter.
Thus, the state match goes from 17% to 14% to 11% to 9% to 7% to 10%.

Now, for the newly eligible population (100% - 133% FPL which actually was forced on us by the feds in Obama Care), the federal match is;
100% for the first three years, then goes from
95% to
94% to
93% to
90% in 2020.
As such, the state match is 0% for the first three years and then goes from 5% to 6% to 7% to 10% by 2020.

(Perhaps this is where the confusion comes from?)

There is no new tax as the hospital assessment pays for the state match for both populations. So, there is no reason to say the state needs to do anything in 2, 3 or 4 years. The bulk of the people who are enrolling with AHCCCS are in the restoration population category, or those childless adults that were dropped in 2010. As long as the legislature or the courts don't eliminate the hospital assessment, the state will be fine.

Again, this is complicated and detailed which is what leads to confusion. Simply put, the federal Medicaid match is enhanced beyond the next couple of years and the state only has a small match which is being funded by the hospital assessment, not the state general fund.

Whether you agree with federal dollars being spent or not was decided long before as Medicaid was created by the Social Security Amendments of 1965.

We don't know the future. There can always be changes or repeal of the Affordable Care Act or Obama Care. However, even if it is repealed or changed, there will still be Medicaid. It isn't going away. Those that supported the Governor and restoration and expansion did not support Obama Care, ( it's Medicaid or AHCCCS in Arizona), raising taxes, ( its an assessment on hospitals only); or abortion, which is illegal in Arizona.

Also, polls showed that the general public wanted this expansion by 67% last year. Furthermore, with a unanimous vote, the Yavapai County Board of Supervisors supported this; the Arizona Association of Sheriffs and West Yavapai Guidance Clinic wanted this. Yavapai Regional Medical Center (YRMC) had laid off workers to make up for their losses in uncompensated care. The only option YRMC had if this continued was to begin closing various services within the hospital, like the cardiac or possibly the OB unit. Clearly not a good choice for the continued economic growth of the area.

There were two choices and the restoration chosen by Governor Brewer was easily the best of what was possible for Arizona and particularly rural Arizona.

Today, you can see the results. On July 8, the Arizona Republic ran an editorial titled, "Brewer was right on Medicaid expansion (we have proof),"

"Gov. Jan Brewer's victory in the fight for Medicaid expansion paid off. Big time. A survey by the Arizona Hospital and Healthcare Association found a 31 percent reduction in the amount of uncompensated care in the first four months of this year compared to the same period last year. We're talking real money. Responses from 75 percent of the state's hospitals showed they wrote off $170 million in uncompensated care through April this year. During those same months in 2013, the cost of uncompensated care was $246 million. That's a direct result of expanding eligibility in the state's version of Medicaid, the Arizona Health Care Cost Containment System.
Uncompensated care costs soared when childless adults were squeezed out of AHCCCS during the recession. People didn't stop getting sick, so hospitals ate the costs. Keep that up and you get higher costs for everybody else. But in January, it began to turn around as coverage was restored to those who lost it, and the program was expanded to 133 percent of the federal poverty level.

"This happened because of Brewer's tenacity. Our Republican governor fought a pitched battle with members of her own party to win approval to expand Medicaid under the Affordable Care Act. The state's share of the cost is paid through an assessment on hospitals. The feds pick up most of the tab.

"Health care coverage went up, and the costs to hospitals went down. That's how it was supposed to work.
Republican lawmakers on the losing side of the expansion vote are still fighting in court to negate the good that was accomplished. They ought to give up the fight.

"Medicaid expansion is paying off in Arizona."

These are facts not ideas. The choice was difficult but the right decision was made.