Ariz. faces initial $3.8B Medicaid cost hike
TriValley Central ^ | March 26, 2010 | PAUL DAVENPORT
Posted on Friday, March 26, 2010 2:43:11 PM by greyfoxx39
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Arizona must drop a plan to cut its Medicaid program’s generous eligibility and instead pay an additional $3.8 billion over the next three years under the federal health care overhaul, state officials reported Thursday.
Arizona also stands to pay billions of dollars more in subsequent years than less generous other states would have to pay, even after increased federal funding starts in 2014, the Arizona Health Care Cost Containment System said in a report.
Gov. Jan Brewer and the Republican-led Legislature included a rollback of AHCCCS eligibility to help balance the $8.5 billion budget for the next fiscal year. The rollback would have dropped 310,000 people, roughly a quarter of the 1.3 million people now served.
But AHCCCS officials concluded Thursday that the health care overhaul’s so-called “maintenance of effort” requirements require Arizona to keep its Medicaid program at current levels in order to keep getting federal dollars. They said the state will incur $3.8 billion of added costs for its Medicaid population before increased federal funding starts in 2014.
The report said the state also faces smaller added costs because it also must maintain a children’s health program, KidsCare, that was to be eliminated June 15 under the recently approved state budget.
The report’s finding supports and adds details to statements by Brewer and Republican legislative leaders that the state stands to incur significant, unaffordable costs as a result of the federal health care overhaul.
For the seven years starting in 2014, Arizona will have to spend an additional $7.8 billion, AHCCCS Director Tom Betlach said in the report.
“That is, in essence, over $1 billion per year in new unfunded federal mandates that will be imposed immediately on the state of Arizona,” he said.
If Arizona hadn’t expanded its eligibility and left it at the levels of most other states, its additional costs would be only $1.8 billion during the same seven-year period.
That estimate was based on congressional passage of the reconciliation bill modifying the overhaul bill that President Barack Obama signed into law Tuesday.
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This is going to be the gift that keeps on giving.
