Governor Jan Brewer's attempts to dig Arizona out of its very deep economic shit hole have earned her well-deserved criticism for trading dollars for lives -- literally. The national spotlight shined brightly on Brewer late last year when the news broke that she was tossing dozens of people off the state's organ transplant eligibility list. Nearly 100 Arizonans had been promised the life-saving operations but then the state reneged, and several people have died since the story appeared.
As more than a few critics pointed out, the Governor managed to find $50 million for prisons in the state's $185 million federal stimulus package, but she couldn't allocate $1.5 million to save the lives of 100 Arizonans. It's just coincidence I guess that her Chief of Staff is a former lobbyist for the private prison industry.
But there's more to the story than the transplant tragedy, and today the Feds gave Governor Brewer the okay to continue hacking away.
The state's once-admired Medicaid program is known as AHCCCS -- the Arizona Health Care Cost Containment System. Like any state Medicaid program, there are mandatory requirements and optional coverages, but there was a time other states looked at AHCCCS as a model program. Not so much anymore.
The Governor's effort to reduce Medicaid spending involves removing about 280,000 adults from the AHCCCS rolls, until the new health insurance exchanges begin in 2014. But first Brewer needed Federal permission, or so she and the legislature thought. So last month, as the Arizona Republic reported, Brewer signed legislation to seek Federal approval:
Gov. Jan Brewer signed legislation Friday morning that will formally allow the state to seek permission from the federal government to drop 280,000 people from Arizona's Medicaid rolls.
That letter, which was sent to Kathleen Sebelius, Secretary of Health and Human Services, requested a waiver from a Medicaid provision called the "maintenance of effort," which mandates levels of coverage. Brewer's letter was a test case because other Governors struggling with budget deficits are also considering seeking the waiver. In an excellent article about the social and economic consequences of eliminating the MOE provision, the Center on Budget and Policies Priorities outlines the situation:
The Affordable Care Act requires states to maintain their current Medicaid and Children’s Health Insurance Program eligibility standards until 2014, when new, nationwide Medicaid eligibility standards take effect and state-based health insurance exchanges will begin operating. However, citing state budget problems, a number of Republican governors have asked Congress to repeal these “maintenance of effort” provisions so that they can reduce Medicaid and CHIP expenditures by covering fewer people.
Arizona was the first state to seek relief from the provision's requirements, which Brewer said would save the state $541 million. However, during the debate leading up to Brewer's waiver request Democrats here argued that cutting the healthcare benefits of more than a quarter-million people is not only cruel, it's economically stupid. The CBPP article mentioned above notes that Medicaid expenditures, like unemployment benefits, stimulate the economy -- to the tune of $2.33 for every dollar spent. That's the argument Arizona Democrats made, and expanded upon, last month, as reported in the Arizona Republic:
... the loss of more than $3 billion in federal Medicaid funding over the next two years will cripple the health-care system and result in widespread layoffs, they said. Arizona hospitals rely on AHCCCS for an average of 20 percent of their revenue, with some hospitals, such as Maricopa Medical Center, running at more than 60 percent.
It turns out, however, that Arizona did not need Federal permission at all. As Stephen Lemons just reported in New Times, a letter received today by Brewer from Sebelius says:
I do want to make you aware that the MOE [maintenance-of-effort] provision in the Affordable Care Act does not require Arizona to renew its demonstration as is, beyond its expiration date of September 30, 2011. [full letter pdf]
New Times' Lemons spoke with Democratic Senator Krysten Sinema, who promised a court fight because parts of the Medicaid program Brewer wishes to eliminate were included in a voter-approved proposition:
Sinema vowed a lawsuit on behalf of patients cut off from their medical coverage, pointing out that the voters of Arizona approved an expansion of Medicaid benefits in 2000 with Prop 204, and that the governor and the legislature lacked the authority to override that voter-approved mandate.
Lemons also mentions one happy side effect of Sebelius's position: The Arizona GOP had expected the Feds to deny a waiver from the MOE provision, which would allow Brewer to beat up on Obama and blame him for the state's budget woes. So, slash away Arizona, but it's your hell hole.
At the same time Governor Brewer and the state's GOP-dominated legislature are cutting corporate taxes even more, they're throwing 280,000 low-income adults off the Medicaid rolls. I have no doubt we'll see another letter soon asking permission to eliminate the remaining Medicaid patients -- seniors, children, and people with disabilities. Bet on it. The real pisser is that Brewer's move will harm hundreds of thousands of people and it will not solve the deficit -- in all likelihood it will exacerbate it. And as Arizona edges even closer to the world of Mad Max, there is no chance her corporate incentives are going to attract the high-value employers the state needs.
If you have a Republican Governor, in addition to decimating the pension plans of teachers, fire fighters, and other civil servants, guess what's next? They just got the green light.