Medicaid Expansion

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Arizona has to decide if it will expand Medicaid eligibility to Arizonans with incomes up to 133 percent of the federal poverty level. We’ll take a look at the costs and benefits of participating in this voluntary portion of the Affordable Care Act.

Coming up next on Arizona "horizon" states must decide if They'll participate in Obamacare's expansion of Medicaid Eligibility. We'll take a look at what is at stake for Arizona. University research pumped $1 billion into the state's economy Last year according to a new report from the Arizona board of Regents. Those stories next on Arizona "Horizon." Arizona "Horizon" is made possible from the contributions of the Friends of eight, members of your Arizona PBS station, thank you.

Steve Goldstein: Good evening, welcome to Arizona "Horizon" I'm Steve Goldstein in for Ted Simons would vacation. Governor Jan Brewer is asking the U.S. Supreme Court to September case involving a state law she signed in 2009 that eliminated domestic partner benefits for same and opposite sex State employees. The United States court of appeals said it discriminates against Same sex couples because they can't legally married under state Law. The three-judge panel says the state doesn't have to provide Benefits to in-state workers and can't deny benefits tie Specific group of employees. Meanwhile, U.S. supreme court's decision on Obamacare is Impacting Arizona and every other state in the union. The court upheld so the called individual mandate saying it's ok For the government to tax individuals who choose not to purchase Health insurance but it also said the federal government cannot Force states to expand Medicaid eligibility by taking away Medicaid funds if they refuse to do so Arizona is currently Weighing its options. Here to talk about what is at stake is Kim VanPelt, director of Arizona health futures. She's a member of the state Medicaid advisory committee and "Arizona republic" homes, Robert Robb who wrote about this issue. Welcome to you both.

BOTH: Thank you.

Steve Goldstein: Bob, let's talk about the overall options. What could Arizona do or not do?

Robert Robb: Arizona is in a peculiar position and different from most other states because we have a state law approved by voters in 2000 which requires coverage up to 100% of the federal poverty Level. That is currently suspended. Enrollment in that is frozen because of budget difficulties. The freeze expires at the end of 2013. So the first question for Arizona is whether you reinstate the Proposition 204 population, the additional folks between 35% of The federal poverty and 100% of the federal poverty level, Mandated by the voters. Other states don't have that, so for them, even though the Federal government is initially saying they'll cover 100% of the expansion from the 35% of the poverty level to 133%, phase down To 90% over time, for most states, that's cost. 10% of that will be a huge number. For Arizona, if by law or choice we reinstate the proposition 204 population it actually may be cheaper for the state to go all the way to 133% rather than just to 100%, because of the Reimbursement formulas in Obamacare.

Steve Goldstein: Kim, please address the unique position Arizona is in the Fact Arizona has been one of the more generous states until just recently.

Kim VanPelt: Arizona is a unique position because prop 204 passed in the Year 2000 to help low-income individuals. What's unique for Arizona is right now we have this freeze in Place and we have 150,000 folks who will be losing coverage this Year because of this freeze. Health reform provides an opportunity essentially to give Coverage again to those folks who have lost coverage, but also Expand coverage up to 133% of the federal poverty level at a Very generous federal match rate, so, um, somewhere between 85 And 90 cents on the dollar would be paid for by the federal Government and an even more generous match in the first few Years. So Arizona is in the unique position in that we've been moving Backwards on health coverage while health reform really provides a very generous federal match to be able to enable us to move forward on health coverage in our state.

Steve Goldstein: How complicated does this get if Arizona decides to opt out? What different stakeholders would have to come together to try To figure this out?

Kim VanPelt: The critical question is: what does Arizona want to do in Terms of its policy to providing health coverage to low-income Arizonians. Health reform provides a generous federal match that is in many Ways hard for us and hard for many states to resist. You talk to anyone and you say where you're going to be able to Give them 90 cents on the dollar to do something that's Important for the state, seems like a pretty good deal. That said, um, it'll cost Arizona dollars essentially to be able to expand Medicaid up to 133% of the federal poverty level or even back to 100% of the federal poverty level if you wanted to Do that, and were able to do that from the federal government's standpoint. So where we would come up with the dollars, that's really the critical question.

Robert Robb: And -- and the first decision isn't Arizonians, I don't think, because making the Medicaid expansion voluntary has just kicked a gigantic hole at the bottom level of Obamacare. And irrespective of what Arizona does, there'll be numerous states that will opt out, because for those that weren't generous before, the 10% they're ultimately going to have to pay for this expansion population is going to be huge. So the first question is the federal governments, what are you going to do about that in states that opt out? If the answer to that is to expand the subsidies and the health exchanges down the income ladder, well, those, the federal government is picking up 100% of the cost and that might actually prove if it's done to be a better option for Arizona For both the prop 204 population and the population from 100% to 133%. The first thing i think we need to do is wait and see what the Federal government's response is to the giant hole at the bottom Level of obamacare that the Supreme Court decision kicked.

Steve Goldstein: If you can reiterate for us the importance and potential impact of the matching funds. What sort of money are we talking about?

Kim VanPelt: Well let me just clarify. When Bob talks about the health insurance exchanges, health Insurance exchanges are virtual marketplaces where people are going to be able to buy health insurance with a federal subsidy. The subsidies right now are only available to folks at 133% of The federal poverty level on up. So 1.2 million Arizonians are expected to get their health coverage through the exchange. The big question we have right now is that with the supreme Court's decision, there was this assumption that Medicaid would cover folks below 133% of the federal poverty level. Now, we basically are in a position that states either have to expand coverage to 133% of the federal poverty level or there isn't a solution for those low-income individuals in order to be Able to get coverage that's affordable. Now, the question that Bob raises is whether you're providing a subsidy to people at those low-income levels whether they can get health coverage or not and whether that might be an option That the federal government provides. One of the questions, though, is that can low-income individuals at the very low end of the spectrum even be able to purchase health coverage with a subsidy? If you're talking, for example, a family and they're making $25,000 a year and health coverage for their family costs $14,000 a year it may be unrealistic for those folks to even be able to purchase health coverage with a subsidy so whether the administration actually chooses to be able to offer subsidies to folks at the low-income of the spectrum or whether they're forcing or offering essentially Medicaid coverage to folks at that low income instead as an option, but that's the big question.

Steve Goldstein: Did you want to follow up on that, bob?

Robert Robb: No.

Steve Goldstein: The sales tax initiative we don't know if it's going to be on the ballot or not is there anything seat side in the potential sales tax if voters pass it?

Robert Robb: Yes or no considering if you regard kids care as part of that access. There's some money for kids care. There's no money for the medicaid population we're talking about here. Passage of that eats up tax capacity and leaves us in the same Hole we're currently in because 100% of the money is earmarked. There's no discretionary money in the sales tax initiative.

Steve Goldstein: How soon will states have to decide? If we're talking about 2014 -- how much are we talking about? People are optimistic in two years the U.S. economy, state's economy will be doing better. How does that affect looking into the crystal ball?

Kim VanPelt: States have to make a lot of decisions about implementation Of health reform. One of them is the implementation of the health insurance Exchange. States have to actually make a decision by November on whether They want to implement their own exchange and certainly how our State addresses the problems of the uninsured in general fit into the overall equation, about how we want to address the Health insurance exchange, how we want to address expansion of Medicaid. Certainly, the federal government is going to be making some decisions on how they interpret the Supreme Court's decision and what that means for the Medicaid expansion that certainly could help form some of their decisions. I think at the end of the day, the question ultimately is how is Arizona going to address the issues of the uninsured? We have nearly one in five Arizonians who are uninsured through this health reform law being offered essentially 90 cents on the dollar match to be able to address the issue of the Uninsured. And the health care costs of those uninsured don't simply go away if we don't take an action or don't expand Medicaid we see The costs being absorbed by hospitals through uncompensated Care. The costs are passed onto the rest of us who have insurance because someone has to pay for it. And also, you know, issues such as the number of folks who have mental health coverage in our state that, um, we've cut back on The dollars that have been devoted to that area in recent years. Medicaid expansion helps alleviate some of those problems in Terms of the costs that are being experienced by the jails, by Law enforcement, etc., as more and more people don't have access to care. So, you know in the end of the day, we have to think about what is good for Arizona. And I think that's ultimately the time line and the critical issues that we have to confront.

Steve Goldstein: Bob, should this be as partisan issue, an issue as it has been. We are hearing from republican state lawmakers saying that we shouldn't be involved? This Rick Perry, a governor from Texas, a Republican, saying we don't want to go forward with this. We're opting out. Should obamacare be a right versus left issue? Should it be?

Robert Robb: It certainly is. There's issues in terms of the federal government's authority that divides upon ideological lines. In most states, it's a fairly simple economic proposition, even Though the federal government is going to cover up to 90% of the expanded population, because the expansion is going to be so huge, the dime is very costly. So a lot of states, I think, for non-ideological but economic Reasons are making decisions that we're not going to participate Because it doesn't matter if someone is covering 90%, 90 cents If you don't have the dime. In Arizona, it's different, because of our state law that requires coverage up to 100% of the federal poverty level. So for Arizona, the economics are different and it may be that if you decide to comply with that law that it's actually cheaper To go whole hog and to go to 133% of the federal poverty level because that might trigger for the 35% to 100% a much higher reimbursement level from the federal government.

Steve Goldstein: We'll have to end it right there. Kim VanPelt and Robert Robb, thank you so much.

Both: Thank you.

Robert Robb - Arizona Republic Columnist
Kim VanPelt - St.Luke's Health Initiatives

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