Rising costs make Arizona’s health care program a budget challenge and a political football

Arizona health program drains cash, stirs debate

PHOENIX — Arizona’s Medicaid program has become both a budget headache and a political football, with its costly burgeoning enrollment and the possibility that national health care legislation will add even more red ink on the deficit-plagued state’s bottom line.

Enrollment in the Arizona Health Care Cost Containment Program has soared in the past decade, thanks to the recession and an earlier voter-mandated lowering of income eligibility thresholds.

One in six Arizonans now is enrolled in AHCCCS, or one of every six state residents.

Gov. Jan Brewer wants voters to roll back part of the eligibility increase, a proposal she included in her State of the State speech Monday.

A declared candidate for election to a full term, the Republican governor already was jockeying with her likely Democratic challenger, Attorney General Terry Goddard, over whether Washington will force additional costs on the state.

Medicaid is no stranger to controversy in Arizona, with its largely conservative bent throughout most of the second half of the 20th century.

Only when its counties were bowing under the burden of providing health care for indigents did Arizona in 1982 become the last state to join Medicaid, which was created in 1965.

However, by 2000, the state’s now more moderate electorate overwhelmingly approved an initiative to lower the income eligibility threshold. Funding was to come from the state’s share of a national settlement with tobacco companies but also the state’s general fund as a backup.

Critics predicted that the backup funding would have to be tapped, and it has. The current budget includes $1.2 billion for AHCCCS, a 13 percent share of the general fund.

Brewer projects the state’s cost at $1.5 billion in the fiscal year beginning July 1, and that’s without any costs from eligibility expansions contemplated in the pending national health care legislation.

“That’s money we simply don’t have,” she said.

Brewer proposed asking voters to roll back the 2000 eligibility expansion to levels covered by settlement money, a change that would affect 300,000 people.

“Contrary to what voters were told, there is no such thing as free health care,” she said.

Democratic legislators say a rollback would mean that many Arizonans would be deprived of care.

“I vomited the first time I heard it,” said Senate Minority Leader Jorge Garcia, D-Tucson.

Senate President Bob Burns, R-Peoria, called Brewer’s proposal a bow to reality given the state’s current and projected shortfalls.

“There’s a limit how much we can do,” he said.

Even before Brewer announced her proposal, Medicaid was the subject of partisan skirmishing between Brewer and Goddard.

She called on him to join other states’ attorneys general questioning the legality of a provision in the U.S. Senate’s health care bill to exempt Nebraska from added costs of expanding Medicaid eligibility.

Goddard said it’s premature to consider legal action to challenge the Nebraska provision because it hasn’t been enacted. He instead invited Brewer to co-sign a joint letter calling the provision unfair and urging the state’s congressional delegation to oppose it.

Brewer’s response on Monday was to denounce Goddard in her address for failing to “to defend Arizona against this infringement of states’ rights.”