The final state to join the Medicaid program won?t be the last to expand under federal healthcare reform. Gov. Jan Brewer plans to expand eligibility in the Arizona Health Care Cost Containment System (AHCCCS) to 133 percent of the federal poverty level, making Arizona the third Southwestern state to accept the ACA's version of expansion.
While it could be tempting to paint the Southwest with broad brushstrokes, Arizona remains its own animal. New Mexico and Nevada's Republican governors must work with Democrat-led legislatures. Republicans dominate Arizona.
Arizona's expansion won?t require the same leap as it will in other states. The state's existing eligibility is high enough that its impact will be lessened. The expansion will add 250,000 members and restore 50,000 childless adults who have lost coverage since 2011.
Brewer's expansion plan will preserve a Medicaid program that manages to be lean and cover more than 1 million members. Arizona did not even offer Medicaid until 1982, 17 years after it was created by the federal government, but from the beginning it employed mandatory managed care, requiring members to enroll in an HMO. That also applies to acute and long-term care members. AHCCCS already covered residents with incomes up to the federal poverty level, and has phased in coverage for non-mandatory populations. It has also added mental health coverage. In 2000, the state added childless adults to AHCCCS, one of only seven states to cover that population. Budget cuts forced the state to freeze childless adult enrollment in 2011. The program lost thousands of childless adults, who will likely return to the rolls under expansion.
There are many quirks in Brewer's plan that could serve as a guide to other states reluctant to expand. The state's share of the expansion costs won?t come from the state's general fund; instead, the money will come from assessments on the state's hospitals. In the event future federal funding dwindles, Arizona will restrict the size of the program.
Expansion will spare the state from inflicting major financial pain on its hospitals. Because indigent care payments will plummet under the ACA, hospitals stood to lose billions if the state did not expand Medicaid.
Budget cuts have forced other states to embrace or expand managed Medicaid in the past five years. Arizona started AHCCCS with managed care. With AHCCCS now set to expand, it could once again become a model for Medicaid efficiency and states that are divided on the expansion decision.
Follow us on Twitter!