Arizona submits plan to roll back Medicaid program
By PAUL DAVENPORT The Associated Press April 1, 2011, 8:07AM ET
PHOENIX
Arizona Gov. Jan Brewer on Thursday proposed restoring transplant coverage -- eliminated amid much controversy last fall -- as part of a major revamp of the state's Medicaid program that also include enrollment freezes that would reduce the number of people in the program by about 138,000 over the next year.
Other elements of the plan include proposed new fees for smokers and obese people who don't work with their physicians and meet goals. The changes would save the state a projected $500 million to help close a $1.1 billion budget shortfall.
The gradual reduction in enrollment -- which would mostly affect childless adults -- is about half of the enrollment rollback that Brewer previously included in her budget proposal for implementation later this year.
But the total number of people denied coverage could reach 200,000 by 2014. Arizona's program has an enrollment of approximately 1.3 million.
"The whole point of the governor's proposal is to preserve coverage to the greatest extent possible," said Monica Coury, assistant director of the state's Medicaid program, the Arizona Health Care Cost Containment System.
Brewer's sweeping plan includes a variety of cost-saving measures, including new co-pays and an annual $50 fee for smokers. There also would be a $50 annual fee for childless adults who are obese or who have a chronic condition such as diabetes and who fail to work with their physicians and meet specified goals.
"If you're not going to manage those things and take some personal responsibility, and in turn that costs the state more money, then you need to have some skin in the game," Coury said.
Details on how the fee on smokers would be implemented remain to be determined, but options include relying on enrollees' statements and random audits, Coury said.
"You need to be responsible for the fact that your smoking costs us more," Coury said.
Brewer said her proposal is comprehensive enough to put the Medicaid program on solid long-term footing, so she is asking the Legislature to restore the cuts of coverage for certain transplants that have drawn sharp criticism. Approximately 100 people lost eligibility for coverage under those cuts.
Democratic Rep. Anna Tovar, a past transplant recipient who has championed efforts to restore coverage, said Brewer should have reversed course on the issue months ago because the $1.2 million cost is affordable.
"We don't need federal approval on that. The Legislature can do that separate and alone from the federal government," Tovar said.
She expressed concern about the rest of Brewer's Medicaid proposal, saying it would harm people who couldn't re-enroll or enroll anew. The enrollment freezes, she said, "are very detrimental."
Under the submission to the Department of Health and Human Services, the Arizona program's changes would generally take effect when its current authorization ends Sept. 30.
HHS Secretary Kathleen Sebelius has already told Brewer that Arizona can reduce eligibility that now exceeds federal Medicaid minimums, and Brewer's proposal target those populations.
However, federal approval is needed for various cost-saving steps such as co-pays and fees, and Brewer said Thursday she's counting on Sebelius' previous stated willingness to be flexible.
"Your partnership is critical to my efforts to preserve Medicaid coverage for more than 1 million Arizonans," Brewer said in a cover letter to Sebelius.
Federal action on Arizona's proposal could take months. "It does take a lot of back and forth," Coury said.
Mary Kahn, an HHS spokeswoman in Washington, said the federal agency would not comment on Arizona's proposal except to cite Sebelius' previously statement that she'd work with state officials. She agreed that the process could take months.
Besides needing clearance from HHS, another obstacle facing Brewer's Medicaid plan is the near-certainty of a lawsuit challenging eligibility rollbacks.
Critics say reducing eligibility violates a state constitutional protection for a voter-approved ballot measure that increased eligibility.
Kahn said she didn't know whether other states have proposed similar reductions of their optional Medicaid populations.
Under Brewer's plan, most of those people who could not either re-enroll or newly enroll because of the enrollment freezes taking effect at various points this year would be eligible for coverage in 2014 under the federal health care overhaul.
The freeze approach is preferable to abrupt cutoffs of eligibility that would occur under Brewer's previous proposal that became the basis for a Senate-approved budget plan, Coury said.
Approximately 20,000 people now getting ongoing cancer treatment from doctors and hospitals could remain on the program, she said.
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