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Medicaid expansion: Been there, done that

June 13, 2013 J,

ACTION ALERT

To all Arizona taxpayers and health care consumers:

When it comes to the fiscal costs and human damage of expanding Medicaid/AHCCCS under ObamaCare, we know that things will turn out badly.  How do we know?  Because we’ve been there, and we’ve done that.  Here is what past experience, here in Arizona and elsewhere, tells us about the ObamaCare Medicaid expansion:

1)   The Medicaid expansion will cost much more than projected.

2)  The expansion may do nothing to help low-income Arizonans — and could hurt them.

3)  The so-called “hidden health tax” won’t get fixed.

4)  Arizona must bargain hard to get a better deal.

5)  The disgusting ploy to gut Prop 108 taxpayer protections will lead to more tax hikes.

You can read more about each of those items below, and take action at www.urapc.org

1)  The Medicaid expansion will cost much more than projected.

None of the promised fiscal results of Arizona’s last Medicaid/AHCCCS expansion (enacted by voters through Prop 204 in 2000) actually materialized.  Prop 204 backers promised that the AHCCCS expansion would save money in the state budget.  The Joint Legislative Budget Committee was somewhat wiser, knowing that the expansion would cost the state money.  The committee projected that covering the Prop 204 population would cost $389 million in 2008.  But the actual cost was $1.623 billion — four times as expensive as projected! 

And of course, the projected $2 billion in federal matching funds is not “free.” Certainly not for federal taxpayers — including millions of Arizonans.  According to the Goldwater Institute’s Christina Corieri, if Arizona and 11 other fence-sitter States join the 18 States that have already said No to the ObamaCare Medicaid expansion, the country could save $609 billion by 2022.  That’s real money — even in Washington!

2)  The expansion may do nothing to help low-income Arizonans — and could hurt them.

Several studies suggest that Medicaid may actually hurt its supposed beneficiaries, but there has been only one randomized study (the Oregon Health Insurance Experiment) comparing persons on Medicaid to persons having no insurance at all.  According to results released recently, the study has so far failed to find any evidence that putting people on Medicaid saved any lives or made any improvements in several objective health markers (blood pressure, cholesterol levels, and diabetes).

Things will get worse in AHCCCS the longer ObamaCare goes without being repealed.  In Arizona, according to the Kaiser Family Foundation, 23 percent of doctors say they will not accept AHCCCS patients.  Combine large increases in the Medicaid population with a declining number of doctors, and the result will be longer waiting times for patients.  In medicine, longer waiting times often mean discomfort, disability and death.  Read more about the human cost of the Medicaid expansion HERE.

3)  The so-called “hidden health tax” won’t get fixed.

The proponents of the current Medicaid expansion estimate that there is a “hidden health tax” of $2,000 per family per year in higher insurance premiums caused by uncompensated care (uninsured or underinsured people using the emergency room).  13 years ago, backers of the Prop 204 Medicaid expansion made the same argument, claiming that the expansion was going to relieve the state’s uncompensated care problem.  But according to a Lewin Group study, uncompensated care in Arizona increased by an average of nine percent per year during the first seven years of the Prop 204 Medicaid expansion, and the average family’s health insurance premium increased from $8,972 in 2003 to $14,854 in 2011 – a 66 percent increase.

Before you believe the hospital lobby’s arguments about uncompensated care, be sure to read Christina Corieri’s latest post: Medicaid expansion will line hospitals’ pockets.

4)  Arizona must bargain hard to get a better deal.

The main reason Arizona’s Medicaid system (AHCCCS) is not as bad as that in most other States is that Arizona waited two decades to join the Medicaid programBecause we held out, we were able to bargain for a better deal — a Medicaid program that has been better at controlling costs and has provided better options for patients than in many other States.

But Governor Brewer’s team has failed to even try negotiating with Obama’s department of Health and Human Services (HHS).  In its most recent message about the Section 1115 waiver, HHS said “we do not anticipate that we would authorize enrollment caps or similar policies” while still letting States get 2-to-1 matching dollars.  But of course, “we do not anticipate” is not the same thing as saying “No.”  Right now, HHS is in the position of having to negotiate with States, because 18 States have already said No to the Medicaid expansion, and 12 States are still on the fence.  At this point, we don’t know if HHS really means “No,” because the Governor’s team simply threw up the white flag and capitulated to the demands of the Obama Administration.

Further, the Governor’s cost projections are based on AHCCCS coverage under cookie cutter Medicaid rules — in other words, how much things will cost if we capitulate and run AHCCCS according to federal diktat, without negotiating for better ways to run the program.

5)  The disgusting ploy to gut Prop 108 taxpayer protections will lead to more tax hikes.

Proponents of the ObamaCare Medicaid expansion are trying to do an end-run around Prop 108, the most important taxpayer protection in the Arizona Constitution.  Under Prop 108, it is supposed to take a two-thirds majority of the Legislature to raise taxes.  But Medicaid expansion proponents want to allow an unelected bureaucrat at AHCCCS to raise state taxes (mainly hospital bed taxes) by hundreds of millions of dollars per year — without a two-thirds vote of the Legislature!

In their efforts to squeeze a giant hospital bed tax (“provider tax”) through a tiny loophole in Prop 108, Governor Brewer and others are trying to pretend that the provider tax is not a tax — even though the provider tax is a TAX under the Social Security Act.  They are also trying to pretend that: the provider tax is not allocated according to formula, although it plainly is; the provider tax does not have a limit, although it is limited by federal law to six percent; and, we don’t know how much money will be raised by the tax, even though the Governor and some Legislators are building budgets around the expected revenue.

History shows that removing taxpayer protections inevitably leads to higher taxes.  If Arizona’s Legislators delegate to an AHCCCS bureaucrat the authority to impose gigantic taxes on hospital patients, they will kill Prop 108, clearing the way for other departments and agencies to raise taxes without getting approval by legislative supermajorities.

To block the ObamaCare Medicaid expansion and to stop the end-run around Arizona’s constitutional taxpayer protections, go to www.urapc.org

For Liberty, Tom

Tom Jenney
Arizona Director
Americans for Prosperity
www.aztaxpayers.org
tjenney@afphq.org

 

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