Despite New Senate Health Bill, Worries Remain Over Medicaid Cuts

By Will Stone
Published: Thursday, July 13, 2017 - 5:04pm
Updated: Thursday, July 13, 2017 - 10:33pm
(Photo by Will Stone - KJZZ)
“We’re seeing a lot of uncertainty,” said Jennifer Mellor, vice president of economic development at the Greater Phoenix Chamber of Commerce.

Warnings that the Senate’s replacement for the Affordable Care Act could upend Arizona’s Medicaid program are emanating from even more conservative corners of the state.

On Thursday, the Senate leadership unveiled a reworked version of the Better Care Reconciliation Act in an effort to win over some of the holdouts in their party.

The new bill includes several key changes to the insurance market and sets aside more money for the opioid crisis, but it doesn’t address the biggest concern for many in Arizona: sweeping cuts to Medicaid, known as the Arizona Health Care Cost Containment System, or AHCCCS.

“I have been critical of Obamacare. It has not lived up to its promises in many respects,” said Republican state Rep. Heather Carter, who chairs the House Health Committee. “But Medicaid is not Obamacare.”

During 2013, Carter worked with former Gov. Jan Brewer and democratic lawmakers to expand Medicaid under the ACA. That allowed Arizona to lift the freeze on enrollment for “childless adults” and raise eligibility for the program. More than 400,000 people have since joined the rolls.

But the new legislation would phase-out that enhanced funding for the expansion population beginning in a few years — a prospect that Carter warns will return Arizona to the “bad old days.”

“When uninsured patients flood our emergency rooms and the cost to care for them is shifted to hospitals and taxpayers,” Carter said.

Carter’s comments came during a press conference at Phoenix Children’s Hospital that differed from some of the town halls and rallies held by progressive groups in recent weeks, namely because of those in attendance.

“We’re seeing a lot of uncertainty,” said Jennifer Mellor, vice president of economic development at the Greater Phoenix Chamber of Commerce. “Businesses aren’t able to make decisions because they don’t know what the next year brings.”

Mellor said the chamber’s greatest concern is Medicaid and worries that the dramatic cuts to the program could damage Arizona’s health-care industry, which is expected to grow by 40,000 jobs over the next decade.

“Our health-care industry is what got us through the Great Recession,” she said.

State officials estimated the first version of the BCRA could eventually cost Arizona upwards of $7 billion. Carter says that cost shift would have a ripple effect across the entire state budget.

“Every piece of the state government will be under review for cuts — education, infrastructure, public safety, everything goes on the table,” she said.

That possibility is on the mind of Republican governors in states that expanded Medicaid like Doug Ducey who has asked Sens. John McCain and Jeff Flake to do no harm as they try to live up to their party’s pledge to repeal the ACA.

On Thursday, McCain indicated he is listening. In a statement, he said the “revised Senate health-care bill does not include the measures I have been advocating for on behalf of the people of Arizona.”

“Arizona has been nationally recognized for running one of the most efficient and cost-effective Medicaid programs in the country. This legislation should reward states like Arizona that are responsibly managing their health-care services and controlling costs — not penalize them,” the statement said.

The Senate health-care bill doesn’t just end the Medicaid expansion; it also limits the federal government’s contributions to states and slows the growth rate of the program, resulting in hundreds of billions of dollars in cuts over the next decade.

When it comes to Medicaid expansion, Arizona’s situation is especially precarious.

In 2000, voters approved Proposition 204, which requires AHCCCS to cover “childless adults” up to 100 percent of the federal poverty level.

During the budget crisis, enrollment was frozen for that group, but the ACA provided the enhanced funding to restore that coverage, so long as the state raised the eligibility to 133 percent of the federal poverty level.

Experts and state health officials have cautioned that Arizona could be particularly hurt by capping the program because the state already has one of the most efficient, low-cost programs in the country. As a result, Arizona could get locked in at a lower funding level than other states.

To avoid this dilemma, McCain said he intends to file amendments that would change the growth rate for Medicaid and extend the phase-out period for Medicaid expansion.

Flake has not said how he will vote on the new bill yet but has signaled support for an amendment proposed by Sen. Ted Cruz that would allow insurers to sell cheaper plans and bypass most of the ACA’s regulations; however, a statement from Flake’s office clarified that “is not indicative of how he will vote on the BCRA.”

The changes to the Senate bill do not seem to have won over members of Arizona’s health-care community, either.

“The Better Care Reconciliation Act remains a bad deal for Arizona patients, families and health care providers,” Greg Vigdor, president of the Arizona Health Care and Hospital Alliance, said in a statement on Thursday.

“[The] amended proposal still slashes more than $800 billion from Medicaid — safety-net healthcare for nearly 2 million Arizonans …” he said.

Those concerns were echoed at Phoenix Children’s Hospital where more than half of the patients are on Medicaid.

“Children make up about 50 percent of Medicaid enrollment, but their care only accounts for about 20 percent of the program’s costs,” Dr. Jared Muenzer, senior VP and COO at Phoenix Children’s Medical Group, said. “These drastic cuts in Medicaid not only threaten the health care of one of our most vulnerable populations. They punish one of Medicaid’s most efficient programs.”

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