In case you missed it, the Arizona Executive and Legislative branches are embroiled in a battle over expanding Obamacare’s Medicaid program in Arizona. Here is the latest Friday poll gauging our reader’s position on this issue. Votes are scheduled in the Arizona House next week.
Friday Poll: Do You Support/Oppose Obamacare’s Medicaid Expansion in Arizona?
May 17, 2013 by Leave a Comment
NFIB Poll: Small Business Strongly Opposes Expanding Medicaid
May 14, 2013 by Leave a Comment
Survey reveals Arizona entrepreneurs’ deep skepticism of federal funding promises
PHOENIX, Ariz., May 14, 2013 — In a poll released today by their leading association, small-business owners overwhelmingly oppose the high-stakes effort at the Arizona State Capitol to expand Medicaid coverage to all Arizonans at or below 133 percent of the federal poverty level as envisioned by the federal healthcare law.
The recent survey conducted by the National Federation of Independent Business (NFIB/Arizona) found 79 percent of Arizona small-business owners opposed to the proposed eligibility expansion for the state’s Medicaid program, also known as the Arizona Health Care Cost Containment System or AHCCCS.
Eighteen percent support the Medicaid expansion proposal with less than 3 percent saying they are undecided.
The controversial Medicaid proposal, a centerpiece of Gov. Jan Brewer’s legislative agenda, is principally backed by hospital systems and opposed by key legislative leaders like Senate President Andy Biggs and conservative activists.
The political impasse over Medicaid expansion has stalled the Legislature’s work on the state budget for the next fiscal year, which begins on July 1, 2013.
“Small businesses in Arizona clearly feel they are under siege by the Obamacare law, with its harsh employer mandates, new taxes and pervasive uncertainty,” said Farrell Quinlan, the Arizona state director for the National Federation of Independent Business. “Our survey found that Arizona’s small-business owners continue to strongly oppose expanding AHCCCS eligibility, because they have no faith in the federal government’s promises to pay for adding hundreds-of-thousands of Arizonans to our Medicaid rolls. Our small-business owners know Washington is more than $16 trillion in debt and Congress will be under increasing pressure to cut the biggest drivers of federal spending – entitlements like Medicaid.”
NFIB/Arizona’s May survey on Medicaid expansion reaffirms small business’ sentiments against expanding Medicaid found in a prior survey conducted before Governor Brewer announced her support for the policy change during her State of the State Address in January.
In that poll, 77 percent opposed the expansion with 13 percent favoring it and 10 undecided.
“It’s instructive that after months of intense promotion and expensive radio and television advertising campaigns, pro-expansion forces have utterly failed to move the support needle with Arizona small business owners,” said Quinlan. “The public’s attitudes have clearly hardened on Obamacare and the fundamental transformation of health care occurring in the United States.”
Respondents to NFIB/Arizona’s survey were also given the opportunity to provide an open-ended answer on the Medicaid expansion issue and implementation of Obamacare in general. The majority viewpoint is best summarized by one respondent’s declaration: “Arizona won’t be able to afford AHCCCS expansion when Washington realizes America can’t afford Obamacare.” Another opponent expressed his profound ambivalence over the decision before Arizona lawmakers: “Either choice is going to be tough and expensive, but to trust the federal government is a mistake. I do not feel that they will make good on their promise to cover the expenses.”
A Medicaid-expansion supporter wrote: “As I understand it, the expansion goes away if/when the federal money goes away. That is the only reason I am supporting it now. When Obama doesn’t want to pay for it anymore, neither should Arizonans.” Another supporter exclaimed: “Believe we are trapped. If O C [Obamacare] stays this seems like the only way to go. But we must have the 90 percent funding from the Feds.”
The latest poll was conducted May 6 to May 13, 2013, as an online and fax-returned survey with 375 Arizona small-business owners responding. The prior poll mentioned above was conducted November 9, 2012 to January 4, 2013 consisting of 449 Arizona small business owners responding. Both polls tested the same question though the set-up explanations of what proponents and opponents say about the policy proposal were updated and expanded in the latest survey. The online version of the May survey can be viewed here.
NFIB routinely surveys its members to determine the organization’s public policy position on issues at the federal and state levels. Due to the overwhelming and consistent results of the two surveys, the upcoming votes by the Arizona Senate and Arizona House of Representatives on Medicaid expansion have been identified as ‘key votes’ eligible to be used on NFIB/Arizona’s legislative score card for the 2013 session.
Commemorating its 70th anniversary, the National Federation of Independent Business is the nation’s leading small-business association with 350,000 members nationwide and 7,500 in Arizona. NFIB has offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small- and independent-business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists sends its views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available at www.NFIB.com/newsroom.
Medicaid Expansion: Been There, Done That
May 9, 2013 by Leave a Comment
To all Arizona taxpayers and health care consumers:
When it comes to the fiscal costs and human damage of expanding Medicaid/AHCCCS under ObamaCare, we know that things will turn out badly. How do we know? Because we’ve been there, and we’ve done that. Here is what past experience, here in Arizona and elsewhere, tells us about the proposed expansion:
1) The Medicaid expansion will cost much more than projected.
2) The expansion may do nothing to help low-income Arizonans — and could hurt them.
3) The so-called “hidden health tax” won’t get fixed.
4) Arizona must bargain hard to get a better deal.
5) The disgusting ploy to gut Prop 108 taxpayer protections will lead to more tax hikes.
You can read more about each of those items below, and TAKE ACTION HERE. And click onthis link for info about the health care freedom protest at the Arizona Capitol on May 15.
1) The Medicaid expansion will cost much more than projected.
None of the promised fiscal results of Arizona’s last Medicaid/AHCCCS expansion (enacted by voters through Prop 204 in 2000) actually materialized. Prop 204 backers promised that the AHCCCS expansion would save money in the state budget. The Joint Legislative Budget Committee was somewhat wiser, knowing that the expansion would cost the state money. The committee projected that covering the Prop 204 population would cost $389 million in 2008. But the actual cost was $1.623 billion — four times as expensive as projected!
And of course, the projected $2 billion in federal matching funds is not “free.” Certainly not for federal taxpayers — including millions of Arizonans. According to the Goldwater Institute’sChristina Corieri, if Arizona and 11 other fence-sitter States join the 18 States that have already said No to the ObamaCare Medicaid expansion, the country could save $609 billion by 2022. That’s real money — even in Washington!
2) The expansion may do nothing to help low-income Arizonans — and could hurt them.
Several studies suggest that Medicaid may actually hurt its supposed beneficiaries, but there has been only one randomized study (the Oregon Health Insurance Experiment) comparing persons on Medicaid to persons having no insurance at all. According to results released last week, the study has so far failed to find any evidence that putting people on Medicaid saved any lives or made any improvements in several objective health markers (blood pressure, cholesterol levels, and diabetes).
Things will get worse in AHCCCS the longer ObamaCare goes without being repealed. In Arizona, according to the Kaiser Family Foundation, 23 percent of doctors say they will not accept AHCCCS patients. Combine large increases in the Medicaid population with a declining number of doctors, and the result will be longer waiting times for patients. In medicine, longer waiting times often mean discomfort, disability and death. Read more about the human cost of the Medicaid expansion HERE.
3) The so-called “hidden health tax” won’t get fixed.
The proponents of the current Medicaid expansion estimate that there is a “hidden health tax” of $2,000 per family per year in higher insurance premiums caused by uncompensated care(uninsured or underinsured people using the emergency room). 13 years ago, backers of the Prop 204 Medicaid expansion made the same argument, claiming that the expansion was going to relieve the state’s uncompensated care problem. But according to a Lewin Group study,uncompensated care in Arizona increased by an average of nine percent per year during the first seven years of the Prop 204 Medicaid expansion, and the average family’s health insurance premium increased from $8,972 in 2003 to $14,854 in 2011 – a 66 percent increase.
Before you believe the hospital lobby’s arguments about uncompensated care, be sure to read Christina Corieri’s latest post: Medicaid expansion will line hospitals’ pockets.
4) Arizona must bargain hard to get a better deal.
The main reason Arizona’s Medicaid system (AHCCCS) is not as bad as that in most other States is that Arizona waited two decades to join the Medicaid program. Because we held out, we were able to bargain for a better deal – a Medicaid program that has been better at controlling costs and has provided better options for patients than in many other States.
But Governor Brewer’s team has failed to even try negotiating with Obama’s department of Health and Human Services (HHS). In its most recent message about the Section 1115 waiver, HHS said “we do not anticipate that we would authorize enrollment caps or similar policies” while still letting States get 2-to-1 matching dollars. But of course, “we do not anticipate” is not the same thing as saying “No.” Right now, HHS is in the position of having to negotiate with States, because 18 States have already said No to the Medicaid expansion, and 12 States are still on the fence. At this point, we don’t know if HHS really means “No,” because the Governor’s team simply threw up the white flag and capitulated to the demands of the Obama Administration.
Further, the Governor’s cost projections are based on AHCCCS coverage under cookie cutter Medicaid rules – in other words, how much things will cost if we capitulate and run AHCCCS according to federal diktat, without negotiating for better ways to run the program.
5) The disgusting ploy to gut Prop 108 taxpayer protections will lead to more tax hikes.
Proponents of the ObamaCare Medicaid expansion are trying to do an end-run around Prop 108, the most important taxpayer protection in the Arizona Constitution. Under Prop 108, it is supposed to take a two-thirds majority of the Legislature to raise taxes. But Medicaid expansion proponents want to allow an unelected bureaucrat at AHCCCS to raise state taxes (mainlyhospital bed taxes) by hundreds of millions of dollars per year — without a two-thirds vote of the Legislature!
In their efforts to squeeze a giant hospital bed tax (“provider tax”) through a tiny loophole in Prop 108, Governor Brewer and others are trying to pretend that the provider tax is not a tax — even though the provider tax is a TAX under the Social Security Act. They are also trying to pretend that: the provider tax is not allocated according to formula, although it plainly is; the provider tax does not have a limit, although it is limited by federal law to six percent; and, we don’t know how much money will be raised by the tax, even though the Governor and some Legislators are building budgets around the expected revenue.
History shows that removing taxpayer protections inevitably leads to higher taxes. If Arizona’s Legislators delegate to an AHCCCS bureaucrat the authority to impose gigantic taxes on hospital patients, they will kill Prop 108, clearing the way for other departments and agencies to raise taxes without getting approval by legislative supermajorities.
To block the ObamaCare Medicaid expansion and to stop the end-run around Arizona’s constitutional taxpayer protections, TAKE ACTION HERE. For more information about the May 15 health care freedom protest at the Arizona Capitol, go here.
For Liberty, Tom
Tom Jenney
Arizona Director
Americans for Prosperity
www.aztaxpayers.org
Update on Obamacare-Medicaid Expansion in Arizona
May 1, 2013 by 1 Comment
Here’s a brief update on the push to expand Medicaid in the Arizona Legislature.
Rumors are circulating that Senator John McComish is attempting to orchestrate a coup d’état on Senate President Andy Biggs as former Senate President Steve Pierce looks on with plausible deniability. Why a coup? Because Senate President Andy Biggs is the one individual holding firm against a vote on Obamacare’s Medicaid expansion in the State Senate. Both McComish and Pierce are supporting Governor Brewer and trying to pave the way for her Medicaid plan. But you should also know that McComish and especially Pierce took thousands of dollars from higher-ups in the healthcare industrial complex during the last election cycle. (Biggs did not.) We are compiling the names and amounts of all the donations received by Medicaid proponents with the goal of connecting the dots. Just another example of the corporate-political incest (yes, it happens on both sides.)
Meanwhile in the State House, Governor Brewer does NOT have the votes to pass her Medicaid expansion. Proponents of Medicaid expansion are short the votes needed to require both a simple majority and two-thirds vote (Prop 108 requirement). House Speaker Andy Tobin is also holding back a vote on the legislation so you can imagine he is under tremendous pressure to let the legislation move for a vote.
At the same time all this is taking place, Democrats are getting very irritated with an effort to amend any legislation to prohibit our tax dollars from going to Planned Parenthood. (We all know that giving money to Planned Parenthood is an accounting game that allows them to free up other funds for abortions.) Democrats want the Medicaid bill to remain silent on tax dollars to abortion providers because they know Planned Parenthood would be feasting off the same steady stream of tax dollars “returning” from the federal government. In fact, House minority leader and likely Democrat gubernatorial candidate Chad Campbell sent an email out today expressing frustration, covering for abortion providers and urging individuals to call their legislators. His rhetoric has heated up calling social and religious conservatives “extremists,” “right-wing” and “special interests” all because they oppose using tax dollars to fund Planned Parenthood.
Keep your eyes on the players in this whole exercise of corporate cronyism and who stands to gain the most “free” tax dollars.
Uninsured May Have Better Access to Care than Medicaid Patients, Survey Shows
April 16, 2013 by Leave a Comment
The public relations campaign to support Medicaid expansion frequently uses testimony by patients with serious medical conditions who have lost their private insurance. It is assumed that once they qualify for Medicaid, they will easily get their chemotherapy, hepatitis c treatment, or defibrillator battery replacement.
“The messages talk only about coverage, not care,” states Jane Orient, M.D., executive director of the Association of American Physicians and Surgeons (AAPS). “But the real question is whether Medicaid provides access to care.”
An internet survey of AAPS members shows that about 47% of respondents think that it is more difficult for a Medicaid patient, compared with an uninsured patient, to get an appointment with a primary-care physician. Only 26% thought that the uninsured had more difficulty. For specialist appointments, 44% thought uninsured patients were better off, and 32% thought Medicaid patients were better off. Only 2% thought that Medicaid patients had “no problem” getting an appointment with a specialist.
When asked, “How easy is it for a Medicaid beneficiary to obtain drugs, medical equipment, or diagnostic tests?”, 48% said it could be “extremely difficult,” 27% said “moderately difficult at times,” and only 13% said it was “no problem.”
Of 166 respondents, 96 were physician specialists, 63 primary physicians, and 7 emergency physicians.
Open-ended comments were overwhelmingly negative about Medicaid. Rural patients who are unable to drive or travel may have no access to care at all except through charity. Some areas have no hand surgeons, endocrinologists, dentists, or rheumatologists who will accept Medicaid. Many cardiology tests, even echocardiograms on inpatients, are questioned or denied. Many drugs, even common generics, are unavailable without jumping through bureaucratic hoops. Treatment for chronic pain is especially difficult. It may be very challenging to get non-emergency surgery approved, no matter how necessary.
“Medicaid ends up as a jobs program for administrators and quasi-medical professionals,” writes one physician. “Very little of Medicaid money actually goes to the ‘health care’ part of the equation.” Another said that “poor customer service is the norm” and “excessive paperwork is routine.”
Because it may cost more to file a claim than a physician can hope to collect, physicians may lose on every Medicaid patient, and lose less if they just see the patients for free.
Stating that “denials were much more common than approvals for appropriate treatment options and diagnostic studies,” one physician concluded that “to expand such a horrendous program is insane.”
AAPS, which was founded in 1943, is a national organization representing physicians in all specialties.
Medicaid Expansion: What You Hear vs. What You See
April 16, 2013 by Leave a Comment
By Dr. G. Keith Smith
Reposted from AAPSonline.org
The strongest advocate for expanding Medicaid—and the likely source of funding for the massive advertising campaign—is the hospital lobby.
We hear that hospitals are going broke. They can’t make ends meet. The uninsured are breaking the hospitals’ backs from emergency room over-utilization. Hospitals won’t survive unless Medicaid is expanded. (This is the most interesting claim, as hospitals simultaneously complain that underpayment by Medicaid justifies their cost-shifting to others!)
These are the lies that are primarily responsible for bringing us ObamaCare.
But if we look around us, what do we see?
Hospitals are building everywhere. They sponsor sports franchises. They buy advertising in high-priced media outlets. They are ceaselessly buying physician practices—and also buying rural hospitals they destroyed by having bought all of the small-town physician practices and diverting their referrals. They are expanding their emergency rooms—and even building free-standing emergency rooms, so-called loss leaders for their institutions. They make multi-million-dollar “logo” changes. Their administrative staffs are huge and extremely well paid.
Why are patients terrified of becoming uninsured, or driven into bankruptcy by medical bills? It is not because of doctor bills. How many doctors have extracted such huge payments from patients as to cause them to lose their homes? It is hospitals that do that. Routinely.
After reading the recent article in Time magazine about abusive hospital billing practices, in which Oklahoma City’s own Mercy Hospital was named, one of my partners remarked that the rotating cross on top of their hospital should be replaced with a dollar symbol! My father recently asked me if any of the hospital administrators whose billing practices have bankrupted countless patients ever had face-to-face contact with those whose lives had been ruined by their greed. Or, he asked, were they like drone operators, destroying people’s lives in a remote, impersonal way, while they themselves remain safe in their office?
The truth is that, economically, hospitals are not unlike utility companies in that they have high fixed costs. As Thomas DiLorenzo explains in his brilliant book Organized Crime: the Unvarnished Truth about Government, once the plant is built and the power lines are present, the cost of adding another utility customer approaches zero. Once the emergency room is built and staffed, the actual cost of an additional patient approaches zero, other than the actual supply costs. As a physician who owns and operates a medical facility, I can tell you that the supply costs are not that high, even in a surgical environment.
Also, while the hospital spokesmen claim that they have to take everyone regardless of ability to pay, hospitals get paid even when they don’t get paid through the uncompensated care scam. As hospitals wave the charity flag with one hand, they are fleecing the taxpayers through this scam with the other.
When Jim Epstein of Reason magazine was writing an article about our facility, Surgery Center of Oklahoma, he discovered that the amount Medicaid paid local hospitals exceeded the prices we post publicly at http://www.surgerycenterok.com. Hospitals claim that these “horrible reimbursements” by Medicaid are one of the primary excuses used to justify the “hidden tax” they impose on uninsured (self-pay) and privately insured patients.
Think about this: if the costs for the indigent are shifted to others who do pay, or to taxpayers, how is it that the hospitals are providing “uncompensated” care? One way or the other, the hospital gets paid for everyone who comes through its doors.
We make a profit at the prices we have listed online. These prices are one-sixth to one-tenth of the prices charged for the same procedures at most “not for profit” hospitals. This is what you can see for yourself. What you now hear if you listen closely is a quiet panic engulfing those in the medical-industrial complex, as this free-market, transparent pricing model is getting noticed and gaining ground.
This movement, if allowed to grow, will reduce the cost of care and raise the quality bar, just like competition does in every other sector of the economy.
Why expand the bureaucratically encrusted waste and corruption-ridden Medicaid model that is bankrupting government, when freedom works so much better?
Dr. G. Keith Smith is a board certified anesthesiologist in private practice since 1990. In 1997, he co-founded The Surgery Center of Oklahoma, an outpatient surgery center in Oklahoma City, Oklahoma, owned by 40 of the top physicians and surgeons in central Oklahoma. Dr. Smith serves as the medical director, CEO and managing partner while maintaining an active anesthesia practice.
In 2009, Dr. Smith launched a website displaying all-inclusive pricing for various surgical procedures, a move that has gained him and the facility, national and even international attention. Many Canadians and uninsured Americans have been treated at his facility, taking advantage of the low and transparent pricing available.
Operation of this free market medical practice, arguably the only one of its kind in the U.S., has gained the endorsement of policymakers and legislators nationally. More and more self-funded insurance plans are taking advantage of Dr. Smith’s pricing model, resulting in significant savings to their employee health plans. His hope is for as many facilities as possible to adopt a transparent pricing model, a move he believes will lower costs for all and improve quality of care.
Dr. Kelli Ward: Opposition to Medicaid Expansion is Real
April 14, 2013 by Leave a Comment
Dr. and Senator Kelli Ward
Since January, many of us at the State Capitol have been trying to determine a common sense way to approach reliable health care for our neediest citizens. It is clear that a full expansion of our Medicaid program to 138% above the Federal Poverty Level (FPL) will add 400,000 patients or more to an already overloaded system. After carefully studying this complex issue, I have determined the plan is unsustainable and potentially harmful to hardworking Arizona taxpayers. We simply do not have the doctors and other health care providers to offer primary care to these new patients. When people are sick or seek care for their chronic illnesses, they will not be able to get into a doctor’s office, so they will instead turn to our emergency departments. Not only will that be much more expensive to Arizonans, but the people are unlikely to get the kind of care they need most.
The last time we expanded AHCCCS (the Arizona Health Care Cost Containment System – AZ’s Medicaid); we grossly underestimated the number of people who would enroll. Three times more parents of Medicaid-covered children and two times as many childless adults signed up. Costs went from an estimated $315 million to an actual $1.2 billion. Voters were told tobacco settlement money under Prop 204 would cover the added patients, but quickly we had to dig into the general fund. Now we are being told a hospital bed tax will cover this expansion proposal and the Federal government will bear the burden of the majority of the costs until 2017. Remember, the Federal government gets its money from us – the taxpayers. While no one can predict the true future price tag, experience proves that the costs have always been much higher than estimated.
Do not let people tell you there are no alternatives and we either expand or do nothing – there are real options. We should request that HHS allow Arizona to continue our current plan for those under 100% FPL and for Arizona to determine the best way to provide care for our indigent population. We should find ways to complete treatment of Medicaid patients that are in the midst of potentially lifesaving therapy for catastrophic illnesses despite the expiration of our current Federal waiver on December 31, 2013 – we can find a way to make an exception for this small number of patients. People above 100% FPL that are not otherwise eligible for coverage are able to buy subsidized policies through the federal exchange, we should let them. We should consider providing catastrophic coverage policies for those under 100% of the Federal Poverty Level and a graduated plan for other services. Cost transparency should be our goal. We must seek tort reform to discourage the practice of defensive medicine which drives up the cost of healthcare.
Our Medicaid system in Arizona is one of the best in the country, but I don’t believe that we need to make it bigger and give control of the hundreds of millions of dollars to an unelected agency director. I will continue to seek free market solutions to our health care dilemma and find ways to care for those who are unable to care for themselves. If you only remember one thing, remember this: the Medicaid expansion plan is about increasing the entitlement to healthcare coverage without any guarantees of increased accountability, improved access to care, higher quality, or lower costs of healthcare – it is a step in the direction of socialized medicine and much bigger government.
Senator Kelli Ward
Senator Kelli Ward, D.O., MPH is a Family Physician with additional expertise in Health Policy, she represents Arizona’s 5th Legislative District and resides in Lake Havasu City, AZ with her family. She serves on the Senate Health & Human Services (Vice-Chair), Appropriations, Education and Government & Environment Committees.
Ten Reasons to Decline Medicaid Expansion in Arizona
April 2, 2013 by 1 Comment
By Christina Corieri, Heath Care Policy Analyst, Goldwater Institute
1. Expanding Medicaid will cost Arizona hundreds of millions of dollars.
For the first three years, the federal government has promised to cover 100% of the medical costs for the newly eligible Medicaid enrollees, and yet the cost to Arizona’s General Fund for the first year alone would be $154 million. The costs to the state are a result of the fact that the federal reimbursement rate of 100% applies only to the direct medical expenses of the newly eligible enrollees, not the additional administrative costs. Additionally, the 100% reimbursement rate does not apply to those new enrollees who were previously eligible but either did not know it or otherwise failed to enroll.
The true costs to Arizona have been hidden by projections that reflect only the first three years of the expansion, not the later years when the state’s share increases. The Kaiser Family Foundation estimates that the total cost to Arizona for 2014-2019 could be as high as $739 million depending on how many newly eligible people enroll.
2. A supermajority vote is required to authorize new taxes.
In 1992, Arizona voters passed Proposition 108, which requires approval of 2/3 of both chambers of the Legislature to impose a new tax or fee or to increase an existing tax or fee. There is a narrow exception for “fees and assessments that are authorized by statute, but are not prescribed by formula, amount, or limit, and are set by a state officer or agency.”
The proposed Medicaid expansion disregards the spirit and letter of the law. Because the Governor’s office has explicitly prescribed the assessment amount in the proposed budget, the tax increase doesn’t fall within the exception in the law.
If legislators authorize a provider tax by a simple majority vote, they will circumvent the will of the voters and will be vulnerable to a lawsuit that, if successful, will leave the legislature with an expensive Medicaid expansion that lacks a funding mechanism.
3. The federal government is unlikely to maintain promised funding rates.
President Obama has already proposed cutting the promised reimbursement rate to states in his last two budgets.
The Governor’s office has acknowledged that Washington will likely cut its promised funding level. A publication released from the Governor’s office in January entitled Difficult Choice: Expanding Adult Medicaid Coverage states “it is probable that, at some point, the federal government will choose to reduce reimbursements to the states as a consequence of its own fiscal challenges.” In fact, the circuit breaker, which is intended to protect Arizona from additional costs, is not activated until the federal government cuts the reimbursement rate for the newly eligible enrollees to less than 80% – effectively allowing the federal government to double Arizona’s share of the costs before the state would react.
4. The provider tax, which is the proposed funding mechanism for the expansion, could be limited or eliminated.
A provider tax is a scheme by which states tax healthcare providers in order to draw down additional federal matching dollars. The tax paid by healthcare providers is returned to them via increased Medicaid spending in the state or increased Medicaid reimbursement rates to providers.
There are growing calls from both sides of the aisle in Washington to limit or eliminate the ability to assess a provider tax. Attacks have come from President Obama, Majority Whip Durbin (D-IL), Senator Corker (R-TN), House Republicans, and the Simpson Bowles Commission. If the provider tax is limited or eliminated, Arizona will be left holding the bill.
Eliminating or limiting the provider tax will not trigger the circuit breaker despite the fact that it would leave the expansion in place with no funding source besides the general fund.
5. The circuit breaker may not be enforced by a future governor and future legislature.
The circuit breaker is designed to automatically abolish the Medicaid expansion if the federal reimbursement rate for the newly eligible enrollees ever falls below 80%.
If circuit breaker is triggered, the sitting governor and legislature would face a media storm as thousands of people who had become dependent on free government health care were removed from the Medicaid rolls. Arizona has already experienced such a media storm when the state did not drop coverage, but merely froze enrollment for childless adults up to 100% of the federal poverty level in 2011.
6. The Woodwork Effect is likely to be much larger than anticipated.
The federal health care law’s higher reimbursement rate does not apply to the costs associated with those individuals who are newly enrolled but who were previously eligible – this is referred to as the “woodwork effect.”
When Arizona passed Prop 204, it was estimated that roughly 129,000 people would fall into this category. But by 2003 it was approximately 250,000 – almost double the original estimate, costing the state hundreds of millions in unexpected money.
7. Uncompensated care is unlikely to decrease.
The Governor’s office has stated that uncompensated care results in a hidden tax of $2,000 per family per year that is reflected in the family’s insurance premium. Proponents of the expansion claim that it will solve the problem of uncompensated care and eliminate this hidden tax.
The same claims were made by proponents of Prop 204, but neither claim proved true. Uncompensated care increased by an average of 9% a year during the first seven years of the Prop 204 expansion according to a study by the Lewin Group. And the average family premium increased from $8,972 in 2003 to $14,854 in 2011 – a 66% increase. There is no reason to believe the results will be different this time.
8. Cost projections are likely incorrect, as Arizona’s last Medicaid expansion illustrates.
The Prop 204 expansion was four times more expensive than the projected cost each year. For example, in 2008, the cost of covering the Prop 204 population was projected to be $389 million, but the cost was actually $1.623 billion.
9. There is no rush because a state can choose to expand Medicaid at any time.
The Centers for Medicare and Medicaid have made it clear that states may opt into the Medicaid expansion at any time. It would be wise for Arizona to wait and see how the expansion plays out in other states before committing Arizona to an expansion that will be incredibly expensive and difficult to roll back.
10.There is no such thing as free federal money.
This “free federal money” is borrowed money which taxpayers must pay back.
By agreeing to the Medicaid expansion, Arizona legislators would be committing current and future Arizona taxpayers to billions of dollars in new federal debt, and each Arizona legislator who votes for the expansion will be complicit in Washington’s spending problem.
Click here to download “Ten Reasons to Decline Medicaid Expansion in Arizona.”
O-Brewer-Care : Surrendering Arizona to Obama
March 16, 2013 by Leave a Comment
O-Brewer-Care : Surrendering Arizona to Obamacare
The Governor who once championed the plight of ranchers on her southern border has created a chasm equal to the landmark in the northern part of her state.
Brewer’s ascent into the national limelight, with the passage of SB1070, is forever tainted by her rapid descent due to the surrendering of the state of Arizona to Obamacare. The Governor of the state that passed a legislative referral to the ballot to amend the Constitution of AZ to prohibit Obamacare and then turned around and sued the Federal government over the implementation of the program is now demanding her own party ignore its core tenets and embrace O-Brewer-Care.
The Republican party disagrees.
The heroine of Arizona has self-inflicted a wound and it is becoming quite a natural wonder. Resolutions opposing O-Brewer-Care from County Chairs were followed by resolutions opposing O-Brewer-Care from County Executive Committees, followed by resolutions opposing O-Brewer-Care from Legislative Executive Committees, followed by resolutions opposing O-Brewer-Care from Legislative Districts.
These are her people. These are her elected Precinct Committeemen. This is the machine and the heart and soul of the Republican Party and it is being ripped out and stamped on. Legislative Districts are at war. Resolutions, counter resolutions, and accusations of misrepresentation of intent are bubbling in the pot.
The Democrats cheer.
On the other side of the aisle the Democrats are tepidly cheering the surprising about face of the reputed solid conservative. 100% of the Democrat caucus is voting for O-Brewer-Care. Her traveling power-point presentations given by AHCCS personal are attended by Democrats and well represented are Progressives and Occupy members.
And in the middle a new group emerges – the Brewercrats. Crossover Republicans supported by and supporting Corporate Healthcare and in some cases, displaying greater fear of the Democrats than their supporters, a group of 5 Senators and 11 Legislators are standing with OBrewerCare and the Democrats. In a historic time with a Republican majority in every State seat and the Legislator, the Brewercrats have chosen to stand against their loyal supporters, watching in LD meetings while the hard-working precinct committeemen vote, often unanimously, for resolutions opposing the Governor’s plan.
The sides are formed. Corporate Healthcare joins with the Governor to lead Democrats, Brewercrats, and with millions of dollars, are running a full-fledged campaign. Their eyes are on the future with the hope to reap, according to some estimates, $2 billion. The other side is the Republican party, Libertarians, nurses, doctors, plumber, waiters, engineers, and small business owners who have passion, a demand to be heard, and who view the Republican tenet of limited government the ultimate goal.
The image of a strong, finger-waving-at-the-President leader gives way to a portrait of a puppet politician surrendering her state and turning her back on the wishes of her own people.
The Brewercrats
Senate
John McComish Adam Driggs Rich Crandall Bob Worsley Steve Pierce
Legislators
Jeff Dial Bob Robson Frank Pratt
Ethan Orr JD Mesnard Karen Fann
Thomas Forese Doug Coleman
Heather Carter Kate Brophy-McGee Paul Boyer
Brewer’s plan rejected and labeled unconstitutional by rank and file Republicans in LD10
March 15, 2013 by Leave a Comment
“We are the rank and file grass roots of the Republican Party. …Aside from being Republicans we are Arizonans. The Voters of Arizona reject the state implementation of Obamacare.”
For immediate release:
Legislative District 10 GOP opposes Governor’s Plan for Obamacare Medicaid expansion.
The Republican Precinct Committeemen of Legislative District 10 unanimously passed a resolution
opposing Governor Jan Brewer’s plan to expand Medicaid at our monthly meeting on March 9, 2013.
We have considered the Governor’s March 6th appeal to support her plan, and the information she has
presented to date, but found them wanting:
· The Governor makes an emotional appeal suggesting that if we don’t support her plan to expand
Medicaid, people will die. That is simply not the case. Under Obamacare the Federal
government will directly subsidize private health insurance to those same people. Numerous
studies have shown that private heath insurance provides higher quality care than the
government run Medicaid program.
· Her plan fails to address reasonable alternatives such as the direct Federal subsidy of private
health insurance for the poor already provided for in the Affordable Health Care Act
(Obamacare), and other models such as Wisconsin’s Badgercare. There are alternatives which
minimize or avoid financial burden to the State of Arizona.
· Governor Brewer’s plan ignores and attempts to sidestep the Constitution of the State of
Arizona. It ignores the will of Arizona voters who passed Propositions 106 and 108 to oppose
the implementation of Obamacare in Arizona and to require a super majority vote to raise taxes.
· Her plan unduly benefits select special interests such as large urban for-profit hospitals but
inadequately considers the effect of the “hospital assessment” on small rural hospitals. It fails to
install audit procedures to prevent the hidden tax of “hospital assessments” from being cost
shifted to all Arizonans who use hospitals. Thus the Governor’s plan becomes another example
of the Affordable Health Care Act making health care less affordable.
· The Governor cites support from 110 large corporate interests, governmental agencies, and
public service organizations, many of which will directly benefit from her plan. She does not
address the thousands of small businesses that will carry the brunt of the consequences and
oppose her plan, or the millions of Arizona Voters who have already told her NO.
We are the rank and file grass roots of the Republican Party. We stand with the other Legislative
Districts and County Party Organizations who have stood up to oppose the Medicaid expansion.
Overwhelmingly both the Republican Party leadership and the grass roots oppose the Medicaid
Expansion. Aside from being Republicans we are Arizonans. The Voters of Arizona reject the state
implementation of Obamacare.
The Cost of Expanding Medicaid Dependency in Arizona
March 11, 2013 by Leave a Comment
Unlink Governor Brewer’s media campaign funded by huge corporations and special interest groups, the opposition to expanding Medicaid dependency in Arizona is almost entirely grassroots driven – and there’s good reason for the disparity. The Arizona Medical Industrial Complex stands to gain hundreds of millions of dollars in taxpayer dollars. This begs the question, “just how much will Medicaid expansion cost Arizona taxpayers?”
Here are two graphics provided by the prestigious conservative organization The Heritage Foundation. Please feel free, to download these and email them to your legislators.
Before the legislature attempts to pass a huge tax on Arizonans, they need to remember Arizona’s Constitution requires a 2/3 majority vote to pass any tax hike. Currently, the Governor would like to redefine the hundreds of millions of dollars as needed as a fee in order to avoid the 2/3′s requirement. Any legislator needs to know they will be violating the Arizona Constitution if they pass this huge tax hike without the 2/3′s requirement.
If you would like to have Americans for Prosperity speak to your organization about why expanding Medicaid dependency is bad for Arizona please contact Americans for Prosperity through www.ArizonaTaxpayers.org.
Maricopa GOP Votes Down Medicaid Expansion in Arizona
March 8, 2013 by Leave a Comment
March, 2013
A RESOLUTION OF THE EXECUTIVE GUIDANCE COMMITTEE (EGC) OF THE MARICOPA COUNTY REPUBLICAN COMMITTEE (MCRC) MARICOPA COUNTY, STATE OF ARIZONA
IN OPPOSITION TO
THE ARIZONA GOVERNOR’S PROPOSED EXPANSION OF MEDICAID (AHCCCS) IN SUPPORT OF OBAMACARE
WHEREAS, Arizona voters clearly expressed their will to reject implementation of the Affordable Care Act (Obamacare) and the individual mandate by amending the Arizona Constitution in 2010 via the Arizona Health Insurance Reform Amendment, Proposition 106; and
WHEREAS, the “circuit breaker” clause is insufficient to prevent out of control escalation of enrollment and the long term costs will cause severe financial hardship on Arizona’s budget; and
WHEREAS, the “assessment” on hospitals is actually a tax and a disingenuous attempt to subvert Arizona’s Constitution and legislative process requiring tax increases receive supermajority approval in the legislature; and
WHEREAS, the United States Supreme Court ruled that each State may reject the expansion of Medicaid and Insurance Exchanges, the two cornerstones of Obamacare, without which it collapses; and
WHEREAS, the best method to honor Arizona voters’ wishes to reject Obamacare is for each State to refuse implementation and allow Obamacare to fail; and
WHEREAS, supporting a government takeover of Arizona’s health care system, even to secure large amounts of federal funds, does not reflect the values of the Republican Party or the interests of the taxpayers of Arizona.
NOW THEREFORE BE IT RESOLVED by the Executive Guidance Committee of the Maricopa County Republican Committee, Maricopa County, State of Arizona, does affirm and declare our opposition to the Governor’s plan to expand Medicaid; and
BE IT FURTHER RESOLVED by the Executive Guidance Committee of the Maricopa County Republican Committee, Maricopa County, State of Arizona, demands that the Arizona State Legislators uphold the rule of law set forth by Proposition 108 requiring a supermajority vote in this matter; and
BE IT FINALLY RESOLVED by the Executive Guidance Committee of the Maricopa County Republican Committee, Maricopa County, State of Arizona, demands that the Arizona State Legislators stand with the people of Arizona in opposition to the Governor’s plan to expand Medicaid by defeating any bill to such ends.
Author: Eric Morgan, Chairman, LD22 Republican Committee
PASSED & APPROVED this 7th day of March 2013, by a vote of 26 (ayes) to 2 (nays) to 0 (abstentions) of the Executive Guidance Committee of the Maricopa County Republican Committee, Maricopa County, State of Arizona.
MARICOPA COUNTY REPUBLICAN COMMITTEE
MARICOPA COUNTY, STATE OF ARIZONA:
A. J. LaFaro
________________________________________
by: A. J. LaFaro, Chairman
Maricopa County Republican Committee
The Shadow of Big Government
March 4, 2013 by Leave a Comment
By Thomas Purcell
It’s been said that ennui and employment are simply incompatible. Obviously the person that said that has never lived in a country run by statists.
Yesterday I spoke with an old friend; we worked together for a few years back in the early 90’s during a roaring economy here in Arizona. He was still in the same business today, but was explaining that he was going to leave the business to sell something else, as his business was awful.
He explained some issues revolving around his financial situation, living condition etc. but basically all his problems revolved around a lack of money.
“People just aren’t buying stuff. It’s not 1995 you know” he explained.
As the conversation ended I realized that this was not the first time I heard it. Everywhere people were saying that exact expression, ‘it’s not the 1990’s you know’ or ‘it’s not what it was’. Funny thing though, the President swore his policies were the same as Clinton’s just a few short months ago at the Democratic convention.
Even people who are working are taking on roommates, working two jobs, or doing something more to make ends meet. They stay in unhappy or violent relationships because they have no other place to go; they stay in jobs with bosses they hate because they are uncertain about their prospects for another job, they take less money than they think they are worth to avoid layoffs.
Thomas Purcell
Then they go home at night and sit in front of the TV or computer rather than going out because they are worn out from work and have no money for extras and take their medication to get through another day.
A quiet ennui has settled over the land as we continue to accept less, work more, and feed more of our money to a hungry government. We worry about government inspectors who look over our shoulder, we worry about that report that needs to be filled out for the state, and we read the emails from the boss on the new regulations and change our procedures once again.
This is the legacy of big government. It’s not the promise of a utopic society; it’s the nightmare of government telling us what to do and how to behave. It’s like living with your parents again and working for minimum wage hoping that you can save enough to move out.
We passed laws yesterday to enhance programs to protect women from violence, but fail to address the real issue causing societal unrest—the pressure of working too hard, for too little, with too much oversight—which leads to violence in the first place, not just at home, but at work and school. Like too many rats in cage with too little cheese, eventually the rats being to prey on each other. Men blame women for a feeling of emasculation and so they kill their wives in a fit of rage. School kids blame classmates for being bullied and the schoolmasters for allowing to happen and so they go ballistic and massacre them. Workers ‘go postal’ at the guy in the cubicle next to them as they pop their gum one too many times, or they fail to get that promotion that the boss decides they can’t afford.
How often do we see it happen where men prefer killing everyone rather than go through the financial chaos of divorce? Or criminals commit suicide rather than face the prospect of prison and humiliation?
Instead we decide more programs are necessary and exacerbate the problem. Each new program now costs 5 times what they say, since we have to borrow to pay for it, increase the taxes to compensate, and return the principle at compounding interest. The debt piles up and the pressure piles on. All those little programs are straws that beginning to break the camel’s back—we are bankrupt and are foolishly thinking of cutting the defense of our nation and the safety net for our elderly when we are sick and old.
A pall has fallen over the land; the shadow of big government.
Read more of Thomas Purcell at his blog: www.Thomas-Purcell.com
STOP Medicaid Expansion in Arizona!
February 18, 2013 by 1 Comment
IMPORTANT ACTION ALERT!
To all Arizona Taxpayers and Health Care Consumers,
First, please register now for AFP-Arizona’s debate on the ObamaCare Medicaid expansion, which will take place from 11:30 am to 1:30 pm on Thursday, February 21 at the Goldwater Institute. To register, send an email here (For more info about the debate, scroll down.)
Gov. Jan Brewer and powerful lobbyists are pushing Arizona to impose statewide taxes, including a hospital bed tax, to fund an expansion of Medicaid (AHCCCS) under ObamaCare. It is vitally important for Arizona to stop the proposed Medicaid expansion, because the human and fiscal costs of that expansion would be enormous. TAKE ACTION NOW.
The most important issue in the Medicaid expansion is the human cost. If Arizona were to expand Medicaid, it would railroad at least 250,000 Arizonans into a low-quality, government-managed health insurance system. Medicaid patients not only have worse medical outcomes than patients with private insurance, but often have worse medical outcomes than low-income persons without insurance — even when they have the same medical conditions. Please go to http://tinyurl.com/gottliebwsj to learn more about this important issue.
But the proponents of the expansion are also trying to do an end-run around Prop 108, the most important taxpayer protection ever passed by Arizona voters. Thanks to Prop 108, the Arizona Constitution requires a two-thirds majority of the Legislature to raise taxes. But Medicaid expansion proponents want to allow unelected bureaucrats at AHCCCS to raise state taxes (mainly hospital bed taxes) by $369 million over the next three years — without a two-thirds vote of the Legislature! If Legislators use a simple majority to delegate to bureaucrats the authority to impose gigantic taxes on hospital patients, they will kill Prop 108 and destroy its protections for Arizona taxpayers. If that happens, we will blame those Legislators — not the lawyers and judges who help them carve out a gigantic loophole in Prop 108.
Gov. Brewer told Arizonans to “do the math” on the Medicaid expansion. With all due respect, she should do the same. According to Brewer’s projections, the Arizona Medicaid expansion would cause the (already bankrupt) federal government to spend $3.6 billion over the next three years alone. The people who will pay those taxes include most of the people of Arizona and — thanks to the federal debt — our children and grandchildren.
The current JLBC projection of $325 million per year in tax increases in 2016 (as bad as that is!) hides the actual future cost of the proposed taxes. By 2019, Arizona will have to pick up at least 10 percent of the cost of the expansion, which will be hundreds of millions of additional dollars annually. And the Obama Administration has already proposed several times to shift additional costs of the expansion to the States.
TAKE ACTION!
Please use this link to send a quick and easy email to your Legislators, asking them to resist the ObamaCare Medicaid expansion. At the very least, even if they are tempted to engage in short-term thinking and take a bunch of “free” money from Washington, legislators should comply with the voter-imposed constitutional requirement to raise taxes with a two-thirds majority.
REGISTER FOR THE DEBATE!
Please register now for AFP-Arizona’s debate on the ObamaCare Medicaid expansion, which will take place from 11:30 am to 1:30 pm on Thursday, February 21 at the Goldwater Institute.
At the event, Michael Cannon of the Cato Institute, Goldwater Institute health care policy analyst Christina Corieri, and Phoenix surgeon Jeff Singer will take on any three pro-expansion advocates who want to debate these issues publicly. We have extended the invitation to debate to the Brewer Administration, to Brewer advisers Chuck Coughlin and Peter Burns, AHCCCS director Tom Betlach, Democratic Legislators, and members of the hospital and insurance lobbies. All concerned citizens who wish to attend the debate should RSVP here.
LEARN MORE!
For more about the problems with the proposed Medicaid expansion, read AFP-Arizona’s line-by-line refutation of Gov. Brewer’s pro-expansion arguments in her January 14 speech.
For Liberty,
Tom Jenney
Arizona Director, Americans for Prosperity
Governor Brewer, we DON’T want to expand Medicaid.
February 8, 2013 by 5 Comments
In November 2010, the voters of Arizona voted for Prop 106, the Arizona Health Insurance Reform Amendment, which was a legislatively-referred Constitutional Amendment that passed by 55.3% of the voters.
The proposition prohibits the enactment of laws or rules that require any person, employer or health care provider to participate in any health care system. It specifically allows health care providers to accept direct payment and allows private health insurance.
It is also true that the Affordable Care Act (ObamaCare) cannot force any state to expand its Medicaid system to include people who earn from 100% to 133% of the poverty rate.
Arizona went through the disastrous expansion of Medicaid coverage when promised the cost would be paid by the Tobacco Settlement. When revenue proved inadequate, Arizona had to pick up the costs and the state ran up a $3 BILLION deficit before the legislature could get it under control. Childless individuals were taken off the Medicaid rolls. That combined with the temporary 1% sales tax, restored money that was cut from the schools to balance the budget.
The waiver AZ received from the federal government to cut childless people out of Medicaid, when we did not have a surplus, expires in 2014.
Gov. Brewer wants to again expand Medicaid even further. Yes, the Federal Government promises to pay the cost for new people into Medicaid, (About 57,000 people) but soon that will drop to a 90% match, then to 80% match. This federal money is not some big free pot of money. It will be taken from people who would otherwise expand their businesses, create jobs, and grow the economy.
Governor Brewer believes she can write an automatic trigger to push the “new people” out of Medicaid when the federal reimbursement begins to drop.
The reimbursements to doctors from ACCCHS (Arizona’s Medicaid) are so low (about 56% of what private insurance pays) that you will almost never see a doctor. You will be treated by physicians’ assistants and nurses. If you are over 50, the Independent Payment Advisory Board will decide if you are even to be admitted.
There are people who will make money off ACCCHS (Medicaid) and those are the one or two big insurance companies who will be permitted in the “exchanges” to write insurance. Big hospitals and big pharmaceutical companies will also get rich as well as the Medicaid administrator. Federal law requires states to pay managed care contractors, BUT NOT “PROVIDERS” (i.e. doctors) at “actuarially sound” rates.
Furthermore, the Enrollee Hold Harmless Clause provides the managed care entity with bankruptcy protection so it can do the work of denying care with impunity. Thus, managed care can cash in on the bonanza with little down side risk.
Nationwide, the 60 million people on Medicaid consume on average 23.5% of state budgets. For many states that exceeds the K-12 budget. In Massachusetts, where RomneyCare has been in place since 2006, it consumes 45% of the budget. Why would cost increases be less for Arizona?
Governor Brewer, we DON’T want to expand Medicaid.
Americans should be looking at ways that reduce the cost of medical treatment. It has been proven many times that when people are spending their own money they are frugal shoppers. Just as car insurance cost would “go thru the roof” if it paid for oil changes, wiper blades and new tires- the same is true of health insurance that covers everything. Conservatives advocate a catastrophic policy (coverage for serious illness) combined with a Health Savings Account where individuals pay for routine stuff- then health insurance increases would be no more than normal inflation.
The Governor sees a $300 million cost savings for this year if Medicaid is expanded, but what happens when the federal reimbursement decreases?
Lefties want government to control every aspect of your life. Constitutionalists believe individuals will make better decisions for themselves. No Utopian scheme has ever worked. Not Fascism, not Communism, not Socialism not a bloated government workforce, not crony-capitalism and not compounding debt. Only true, competitive Capitalism gets an economy growing.
Message from Pima County Republican Chair.
WSJ – Governor Brewer’s Spectacular Flip-Flop
February 5, 2013 by 3 Comments
Reprinted from The Wall Street Journal
February 4, 2013
As D-Day looms for ObamaCare, one big question is how many states will sign up for its Medicaid expansion. The recent and spectacular flip-flop of Arizona Governor Jan Brewer is a case study in the political pressure and fiscal gimmicks designed to get states to succumb. It’s also a study in the arcane and perverse ObamaCare incentives that are intended to gather ever more health-care spending under federal control.
***
Arizona’s current Medicaid program is well run by the program’s standards—a low bar—but it is also too large. The program now finances one of every two in-state births and two of every three days seniors spend in nursing homes. Spending tripled in the last decade to $9 billion a year.
That’s despite $1.8 billion in cuts since 2009. The state fisc was such a mess that in 2010 Arizona Medicaid banned paying for several types of organ transplants. In March of that year, Ms. Brewer wrote to Mr. Obama calling the Affordable Care Act “a vast new entitlement program that our country does not have the resources to support” and also one that “makes our situation much worse, exacerbating our state’s fiscal woes by billions of dollars.”
Arizona argued before the Supreme Court that the Medicaid mandate was unconstitutional, anti-federalist commandeering—and seven Justices agreed it was “a gun to the head” and allowed states to opt out without penalty.
But so much for that. In her State of the State address last month, Ms. Brewer pulled a political 180°—or maybe 540°—and said expanding Medicaid would “inject $2 billion into our economy and “save and create thousands of jobs.” (Is Larry Summers moonlighting as a Brewer speechwriter?)
One secret of her switcheroo is Medicaid’s “matching rate” formula, in which the feds pick up 67% of Arizona’s existing spending and 100% (and later 90%) of the costs of ObamaCare’s newly eligible population. The state supposedly no longer needs to spend “billions” but merely an extra $154 million in 2014—then bank $1.6 billion from Washington, which her budget documents call “a return on investment of more than 10-to-1.”
Associated PressArizona Governor Jan Brewer
How can the state conjure such money from nothing? The answer is that Ms. Brewer and Arizona hospitals have cooked up a spending scheme to rip off national taxpayers to avoid even the $154 million the state would at first pay. The hospital lobby first floated this scheme in 2011 “for the specific purpose of generating matching federal Medicaid funds.”
Here’s how it works: Arizona will tax hospitals and insurers for the $154 million. Then it will return $154 million to the health industry via more Medicaid business that will cover the cost of the tax and then some. The money needs to make a round trip from providers to the state and back to providers to game that 67% federal matching rate.
So Arizona takes (say) $3 from a hospital and then turns around and pays the $3 back, using one of the hospital’s own dollars that Arizona converted to “revenue” plus two dollars courtesy of Washington for its 67% federal share of the $3 payment. Arizona can then use the hospital’s remaining $2 of the original $3 to pay for another $6 of Medicaid expansion.
Some 49 state now use this trick of so-called provider taxes to goose federal spending, up from 21 in 2003. (Alaska is the exception.) But the practice is so abusive that even Mr. Obama proposed new limits in his last two budgets.
This subsidy honeypot can’t last forever, which is why other Governors are more skeptical about this Obama Medicaid windfall. When the money inevitably runs out, states will retain permanently larger obligations and lose budget autonomy for a generation or two as health care crowds out other priorities like education and roads.
Ms. Brewer was nonetheless besieged by health-industry lobbying, especially from hospitals that want more government money and the insurers that administer Medicaid. The campaign is orchestrated by Chuck Coughlin, Ms. Brewer’s former political strategist, and Peter Burns, a former Brewer budget consultant.
Providers are especially powerful at the state and local level, and the goal now is to rush the Brewer-Obama condominium through the Phoenix legislature with little debate. A particular offender is the Arizona Hospital and Healthcare Association, a trade group whose 2012 agenda includes “Oppose Taxpayer Bill of Rights-style legislative referendums or bills that arbitrarily limit state spending.”
Ms. Brewer’s other rationale is that everybody else is doing it, and that if Arizona opts out of a larger Medicaid then “Arizona’s tax dollars would simply be passed to another state.” Well, no, Washington would simply spend less money that it doesn’t have. In any event Arizona is already a net tax beneficiary—pulling down $1.19 from the feds for every dollar it sends to D.C., according to the Tax Foundation.
Ten other GOP Governors have rejected Mr. Obama’s Medicaid bribe, with another 20, Democrats and Republicans, undecided. Twenty are expanding, including Republicans Brian Sandoval of Nevada, Susana Martinez of New Mexico, Jack Dalrymple of North Dakota and even, on Monday, Ohio’s John Kasich. Thus does modern government create the carrots and sticks of ever-larger government.
