The Impact of Governor Brewer’s Medicaid Plan:

Stabilizing Arizona’s Health Care Sector

Background
In the mid-1990’s Governor Symington proposed an expansion of the AHCCCS program for Arizonans with incomes up to 100% of the Federal Poverty Level (FPL). After the Legislature failed to take action, 72% voters supported an initiative to expand coverage. After the state failed to implement that initiative, voters again weighed in and, in 2000, 63% of the voters approved Proposition 204, requiring AHCCCS coverage for all Arizona citizens with incomes up to 100% of FPL.

As a result of the state budget crisis, enrollment for childless adults was frozen in July 2011. At the time the freeze was implemented, 227,000 childless adults were enrolled in AHCCCS. As of March 1, 2013, that figure is now down to 81,600, and is projected to drop to less than 50,000 by December 31, 2013.

During this time, hospitals have faced significant financial pressure, and the Arizona Hospital and Health Care Association reports that hospital uncompensated care has grown by over 80% since childless adult enrollment was frozen.

Governor Brewer’s Medicaid coverage proposal would uphold the will of the voters, protect our health care infrastructure, keep Arizona tax dollars in Arizona, restore coverage for childless adults and prevent the almost 50,000 childless adults left on AHCCCS from losing their coverage on January 1, 2014 – all at no cost to the State General Fund.

Impact of a “Do-Nothing” Scenario: Loss of $1.7 Billion and 300,000 Arizonans without access to care

The impact of no action on Medicaid coverage means that, from 2011 to 2014, roughly $1.7 billion in annual spending has been removed from the health care industry throughout the state, and almost $700 million from hospitals alone.

The State has taken numerous mitigating steps to temporarily bridge the impact of these reductions such as

  • Safety Net Care Pool
  • KidsCare II
  • City of Phoenix Assessment
  • Supplemental Payments for IHS and tribal facilities
  • Local contributions for DSH and GME
  • Federal match for Prop 202 Trauma Funds

More details about these temporary bridges that expire December 31, 2013 can be found here.

The Governor’s Plan is critical for Hospitals and Clinics: Hospitals and Clinics lose millions without the Governor’s Plan

In the absence of support of the Governor’s proposal, hospitals will be facing significant lost revenue and increased uncompensated care as individuals who are not able to obtain AHCCCS coverage continue to seek care in emergency rooms.

To provide context for the hospital specific impact of no action, below is information on AHCCCS spending (both in total and specifically on childless adults) from October 1, 2010 to September 30, 2011, by Arizona hospital.

Total spend on care for childless adults: Hospitals

In addition to spending in hospitals, AHCCCS also spent approximately $179 million during the same time period on federally qualified health centers and rural health clinics. Of this amount, approximately $35,939,272 was spending on childless adults.

Total spend on care for childless adults: Health Centers and Rural Clinics