Medicaid Cuts Lawsuit

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The Arizona Center for Law in the Public Interest is suing the State over budget cuts to Arizona’s Medicaid program known as AHCCCS. The Center’s Executive Director, Tim Hogan, explains the lawsuit.

Ted Simons: The Arizona center for law in the public interest recently filed a lawsuit challenging state budget cuts to Arizona's Medicaid program, known as AHCCCS. Here to talk about the lawsuit is Tim Hogan, the center's executive director. Good to see you again thanks for joining us. Why did you file this special action?

Tim Hogan: Well, the governor's Medicaid reform plan that the budget has allowed her to go forward with, and which cuts the AHCCCS program by $500 million, would either freeze eligibility for people who should otherwise be eligible according to a initiative passed by Arizona voters 11 years ago, or would terminate coverage for those people, and that violates the will of Arizona voters and where voters absolutely said you can't do that, people should be covered with healthcare up to 100% of the federal poverty level.

Ted Simons: Expand on that, who are we talking about here? The people that are affected?

Tim Hogan: Well, there are two populations that will be affected by either a freeze or termination. One is the so-called childless adult, without dependent children. The federal poverty level for a single adult is about $10,000 a year. So right now, because of the proposition, Arizona voters approved, those people are covered up to 100% of the federal poverty level. The governor's plan would either freeze eligibility, meaning on or after July 1, any poor, childless, adult would not be eligible for healthcare coverage. The other is what they call higher income parents and for parents with children at a certain income level for poverty level, generally $15,000 or in that neighborhood, they want to reduce the eligibility from 100%, where it's at now, again, because of the initiative, to 75%. Effective October 1st.

Ted Simons: Ok. How many folks are we talking about here?

Tim Hogan: For the childless deputies over a year they expect that the population on AHCCCS would be reduced by 140,000.

Ted Simons: You've mentioned that the plan violating the will of the voters. You've mentioned how the plan violates the state constitution because of the initiative, you can't mess with something the voters put into place. That's basically the crux of what you're talking about?

Tim Hogan: Yeah, it's pretty simple. Arizona voters approved this. Voters also approved a provision, an amendment to the Arizona constitution, that prohibits the legislature from amending or repealing a voter initiative. And so by doing this, that's exactly what they're doing. They're saying, well, we don't have enough money do what the voters wanted. The initiative anticipated that and said use the tobacco settlement funds but if that's not enough, you need to use any other available source, including legislative appropriations and federal money to support this healthcare.

Ted Simons: I was going to say, because coming from the governor's office in particular, the state is broke, there's no other available source. The available sources have been dried up. Not viable? Not a valid argument?

Tim Hogan: I've never understood that. They've projecting revenues for $8.3 billion. By freezing these populations they're only going to save $200 million. Which is what? -- 2.5% or something like that of the projected revenues. I'm sure if they were inclined they could find the money to support this population out of $8.3 billion.

Ted Simons: The money affected is what? A couple hundred million.

Tim Hogan: A couple hundred million for a freeze. If they terminate coverage or all existing participants, childless adults and these higher income parents, it would be closer to $500 million.

Ted Simons: The speaker, the speaker of the house said if your side were to win this, there would still be no guarantee he would find a way to even get a special session to approach the topic and that pushes to another question. Are you worried if you succeed that, could mean further cuts to other services in the state?

Tim Hogan: Sure, I'm worried. I'm worried whatever of the legislature is going to do. And, you know, it's predictable they would respond by saying, well, we're going to have to cut K-12 education. Well, that's to scare people into thinking that's their only option. They have a infinite number of options here, though. For example, they funded the Arizona commerce authority. This past session with $30 million. Instead of meeting their legal obligation to provide healthcare to these people. They've got a whole lot of different options to pursue here. They just have focused on the ones they know people are going to be resistant to.

Ted Simons: Let's talk about a timetable, because this is somewhat confusing, especially since we're waiting for the feds to take action, correct?

Tim Hogan: Correct. In order for a freeze on July 1, the federal government has to approve it. That hasn't happened yet and we wanted to get this lawsuit file so that it was there, ready to go, if and when the federal government takes action because we'll have to take action quickly then to stop any kind of freeze from going into effect. By the same token, if the federal government were to deny the state's going forward with a freeze on eligibility, it's already indicated you can simply file a new plan and exclude this population with your new plan effective October 1st. So that's why we have the range of money we're talking about. If they can't freeze, they're going to terminate. And save the $500 million that way.

Ted Simons: And that's why you're trying to see the special action that the Supreme Court moves as quickly as possible.

Tim Hogan: Correct. Well, if the federal government approves this, we'll be in court the next day asking for an immediate hearing, if we can't get that in the Supreme Court, we'll get it in a lower court.

Ted Simons: Is it your sense the feds will act here shortly?

Tim Hogan: They're being very guarded what they're going to do. They haven't let on at all about when or what is going to be their determination.

Ted Simons: All right. Tim, good to see you, thanks for joining us.

Tim Hogan: Thanks.

Tim Hogan:Executive Director, Arizona Center for Law in the Public Interest;

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