Horizon, Host: Ted Simons

March 22, 2010


Host: Ted Simons

AHCCCS

  |   Video
  • State lawmakers have voted to cut $310,000 from the Arizona Health Care Cost Containment System, Arizona’s health care plan for the poor. John Rivers of the Arizona Hospital and Healthcare Association will address the ramifications of the cuts.
Guests:
  • John Rivers - Arizona Hospital and Healthcare Association
Category: Government

View Transcript
Ted Simons:
Tonight on "Horizon," the House passes health care reform. We'll talk about the impact on Arizona. And hear the pros and cons on a proposed one-cent increase in the state sales tax. That's next on "Horizon." Good evening and welcome to "Horizon." I'm Ted Simons. An investigation is underway into a reported act of vandalism at the Tucson office of democratic representative Gabrielle Giffords. The glass front door at the office and a side glass panel were shattered. No rocks or bricks were found and police are now looking to see if a pellet gun may have been used. U.S. capitol police and Tucson police are investigating. The House passed a historic health care reform bill last night. How will the changes impact Arizona residents and the state's Medicaid program? Here to talk about it is John Rivers, president of the Arizona hospital and healthcare association. Good to see you. Thanks for joining us.

John Rivers:
Thank you, Ted.

Ted Simons:
The health care reform bill. First of all, your thoughts, immediate thoughts.

John Rivers:
Some good, some not so good. It's going to affect people very differently depending on their circumstances. I think if you're uninsured right now, you'll have a different view of this bill as somebody that's insured. If you've ever been denied health coverage because of a pre-existing condition, you're going to view this as somebody that hasn’t. It depends on where you sit and your individual circumstances.

Ted Simons:
For those right now who have health insurance in one way, shape, or form, not much changes?

John Rivers:
I don't think too much is going to change for them, regardless of whether you have Medicare or whether you have private insurance. You're still going to be able to have coverage through your employer, paid for in the same way it is right now with whatever cost-sharing features are in there. How people who are insured right now are going to feel it the most, frankly, is in the tax increases that are going to occur in future years to pay for the reform that's being implemented and phased in, you know, very gradually.

Ted Simons:
They may feel that, but proponents of the plan say if health care costs do indeed come down the next few years, that would be a balancing act.

John Rivers:
I think that's fair to say. I think it's also fair to say there's a lot of skepticism whether that will happen or not. We've all heard the rhetoric on both sides of this issue and there's plenty of it on both sides of the issue. My sense is people intuitively are having a hard time getting their arms around the notion that you can insure 32 million more people and actually spend less money. And we're not partisan in our view of this. We actually favor reform as an association, but I have to tell you I'm as skeptical about that as anybody. I think there are some areas where it's going to cost more, some areas where it's going to cost less, and my guess is 20 years from now your kids and mine are going to be debating who is right in that argument.

Ted Simons:
And the argument includes some rhetoric, as you mentioned. Some are calling this as a government takeover. Do you see this as a government takeover?

John Rivers:
No. I'll be honest with you, I don't know what that phrase means. I think it's a phrase some people use to scare people. I think Republicans are a lot better at scaring people than the Democrats are. I think that is a -- well, I don't know what it means. We have a Medicare program right now, we have a Medicaid program right now, we have a V.A. health system. I guess those are government-run health systems. I don't see anything like that coming out of what Congress has just approved.

Ted Simons:
When Congressman Franks released a statement today saying that this bill, this plan, this reform fundamentally diminishes the best health care system in the world, how do you respond to that?

John Rivers:
I'd like to know how that happens. That would be my response to it. I think from a healthcare provider's point of view, we would probably answer that question would be, well, there are a lot of cuts to health care providers that are going to take place as a part of this reform package. Now, the democratic leadership in Washington rationalized this on the basis, hey, we're sending you 32 million more paying customers, so there has to be a little pain felt on your part. It wasn't quite that crass but almost. I think from our standpoint, okay, there are more paying customers, if you will, in the system, but is there enough money in the system to pay for the care that those 32 million people are going to require? And that's where nobody really knows the answer, in my opinion.

Ted Simons:
Let's get now to Arizona. How does this bill, this plan impact Arizona?

John Rivers:
It’s going to impact us I'd say on the plus side and on the negative side. You know, on the plus side, we presently got about a million and a half people who are uninsured in Arizona. If you're one of those uninsured, there's a really good chance that you're going to have adequate health care coverage in the future as a result of this bill. Where the challenge is going to come in is that the federal government is only -- is basically only paying for this expansion and the programs that we have right now up until the middle of 2011. There's a maintenance of effort requirement that kicks in as a part of the new expanded Medicaid program. We've heard our governor and other officials say we can't afford the Medicaid system now. They've got a point. They have a real problem figuring out how to pay for the Medicaid program that we now have between June of 2011 and January of 2014 when the new Medicaid expansion kicks in.

Ted Simons:
When you say the Medicaid program we now have, that does not include the cuts that were passed by the legislature?

John Rivers:
That does not include the cuts.

Ted Simons:
That's basically locked in by the federal bill, correct? At least if you want to get the maintenance of effort going.

John Rivers:
The cuts by the legislature said a couple of things. Number one, we're not going to have kids care anymore as of June 15th and we're going to have a rollback on what's called a prop 204 population, 310,000 childless adults currently covered by the access program. With the health care reform legislation, pardon me, it now says that if you want to continue to have a Medicaid program or an access program in Arizona, you're going to have to fund that kids care program and you're going to have to fund that prop 204 population. You're not going to be able to cut back eligibility for either one or you won't be able to participate in the federal Medicaid program. So if you're an Arizona lawmaker or governor or whatever, that's going to present you with a big challenge.

Ted Simons:
I was going to say, and now this is not the Senate bill that was passed but will be tinkered with by the Senate to reflect the House Bill. This is the House Bill you're referring to here as far as that Kidscare mandate.

John Rivers:
Yes. And it was I think what's called the sidecar bill or trailer bill that was fixing the bill, the one in the past and didn't. I think the main point, Ted, is we do expect that maintenance of effort requirement to be in the final version that gets signed into law by President Obama. So, you know, I think its good news for a lot of people in Arizona, but there isn't any question that it's going to present our lawmakers with a big, big challenge.

Ted Simons:
In terms of getting that money.

John Rivers:
Finding the money, right.

Ted Simons:
I know that the plan to up the eligibility as far as access is concerned and getting rid of kids care and all sorts of things meant a loss of matching funds. You did a study; your group did a study --

John Rivers:
Yes, we did.

Ted Simons:
That showed the economic impact. Talk to folks about what you're saying the people are going to be hurt by the jobs they won't have.

John Rivers:
There's going to be a wide variety of impact. We asked the ASU business school to do a study for us on what is the impact on Arizona's economy if you shrink health care by $2.7 billion, which is what was in the budget that was approved by the legislature about a month ago or three weeks ago. And the answer that came back was that is the equivalent of a loss of 42,000 jobs. That is the equivalent of shrinking the state's gross domestic product by 3.3 billion. Here we're at a time when we're trying to figure out how to attract more business into the state, how to create more jobs and our policies are having exactly the opposite effect.

Ted Simons:
Again, the governor will say and most lawmakers will say we simply don't have the money.

John Rivers:
Yes. That's what she would say. You know, when we would ask a legislator or the governor, why would you turn down a three-for-one federal match? That's a very highly leveraged expenditure of the state federal dollar. The answer is we don't have the dollar to give you. So, you know, economists have been debating for at least a year about why Arizona doesn't have the dollar, and there are some economists that say, you know, if we had the tax structure in place that we had in 1986 or 1996 even, we wouldn't have the economic crisis that we have today.

Ted Simons:
Last question. The governor and others, you know, they don't necessarily want this to happen, but, again, they say there's no money. And she's been quoted as saying, that if people are in need of emergency care, they'll just go to the emergency rooms. Are hospitals prepared for the onslaught of folks that will hit the emergency rooms?

John Rivers:
No. The governor has said we want people to get primary care so they don't have to go to the emergency room. What will happen now is that our hospital emergency rooms are going to be flooded with people who don't need to be there and they're going to be flooded with people who don't need to be there because they have no other place to go because they've lost their primary, you know, health insurance and access to their primary care doctor. That has an implication that goes way beyond the people that lost their health insurance coverage. It means people like you or me or family or friends having to go to an emergency room, they're going to find instead of getting seen by a physician in 30 or 45 minutes, it might be three or four or five or six hours. This will be something that has an impact on Arizona way beyond the people that have lost their health insurance.

Ted Simons:
John, good to have you here.

John Rivers:
Thanks, Ted.

Tax Increase Debate

  |   Video
  • Voters will be deciding this May whether to increase the state sales tax by one-cent for three years. State Senator Thayer Verschoor of “Ax The Tax,” a group which opposes the increase, will discuss the proposal with John Wright of the Arizona Education Association, who supports the tax increase.
Guests:
  • Thayer Verschoor - State Senator
  • John Wright - Arizona Education Association
Category: Government   |   Keywords: tax,

View Transcript
Ted Simons:
If you'd like to see any of tonight's "Horizon" segments again or view previous editions of "Horizon," check out our website. A one-cent increase in the state sales tax will be on the May 18th ballot. Lawmakers sent the proposed tax increase to the voters in an effort to help balance the state's budget over the next three years. Here to talk about the pros and cons of the tax are state senator Thayer Verschoor, who is the leader of "Ax the tax," a group opposing the plan. Also here is John Wright of the Arizona Education Association. He represents yes on 100, the group supporting the tax. Good to have you both here. Thanks for joining us.

Thayer Verschoor:
Thank you.

Ted Simons:
Let's start with you, Senator. The governor says this tax is needed. Is she wrong?

Thayer Verschoor:
Yes. This tax is a bad idea. It's the wrong time for this tax. Right now we're struggling in our economy. We're trying to recover. We have the opportunity where we're seeing some of our economy recovering in our retail sales and now we're going to add an 18% tax on top of that, which is going to slow that recovery down, if not stifle it altogether. You know, there are several other reasons. You've got the Goldwater Institute out there that says this tax could cost us 24 to 40,000 jobs a year, and right now what we need to be doing is creating jobs and not losing jobs. So those -- and on top of that, it doesn't solve the problem, you know. And it's particularly a regressive tax that hurts low income and fixed income folks the most.

Ted Simons:
Kind of a rough equation there. How do you resolve that?

John Wright:
These are tough times and it's necessary. It's not the first choice for any of us. But right now with the money that's already been cut out of the state budget for three years adding temporarily one-cent per dollar, a penny for your thoughts, you'll hear Arizona firefighters say a penny for Arizona’s future. To pull us out of this hole, right now we have slashed spending on schools and that is evident in every classroom in Arizona. You just talked about slashing spending on healthcare and that’s going to be evident in emergency rooms. We know that Arizonans are willing to do this. We know that it's temporary and this is exactly the type of measure -- when you're in a deep hole, you have to quit digging, you have to start coming out of it.

Ted Simons:
I asked the governor about her position on this. The spokesperson said she was wrong. The voters voted on this. Were they wrong?

John Wright:
You saw bipartisan opposition and support. All the parties had their own reasons. Yes, there are people who are concerned about the regressive nature of this. We have to be sure we have the necessary money to meet social services and state obligations. Right now there's bipartisan support. The group that comes together to plan this campaign in support of it is extraordinarily varied from businesses to unions, from environmental groups to chambers because it's a broad coalition that recognizes we have to do this now.

Ted Simons:
If this tax vote fails, we're looking at another 900 some odd million dollars in cuts. 60% or so at education in a variety of ways and forms. Can Arizona survive that? Is that good for Arizona?

Thayer Verschoor:
I think we have to look at things that are going to create jobs. We're going to have to do some further reductions, even if this tax passes. I mean, you're going to hear talk about if the tax doesn't pass we'll have to do $900 million in further cuts. Well, Ted, we're in a $2.5 billion structural deficit even if this tax passes. There's going to be further cuts on top of that. I think that's one of the reasons so many Democrats voted against this. They know this is going to solve the problem. Any I believe credible economist will tell you that a tax increase will not get you out of a recession. You can't tax your way into prosperity. It hasn't worked in the past; it won't work in the future. What we need to be doing is looking at ways to create jobs, not things that will take jobs away from the economy. That's what this will do.

John Wright:
There are a few numbers getting tossed around. I haven't been able to find where the Goldwater Institute gets credible data that says the jobs go away. The jobs that go away are the bus drivers, nurse assistants. The sort of jobs these funds support that need to continue and those are the jobs we need to keep. Thayer Verschoor and his colleagues voted for the plan B budget. Of course he's a leader in the Senate. He knows what the outcome was going to be. There was some concern. I think you and others expressed about what does this mean for charter schools because those cuts are in there. There's nothing comfortable about this. There is something necessary about this. This is the necessary right choice.

Ted Simons:
Yet the city of Phoenix would wind up having the second highest overall tax rate compared to other cities in the country. Again, how does an economy get started, get going when those kind of tax rates are being thrown around?

John Wright:
I don't think the tax rate is going to bury the economy. I'm not sure what the first largest city is, but I would bet New York City is right up there. New York City is not hurting the way Phoenix is now. They're a thriving city. They bring in business from all over the world. The sales tax in New York City doesn't seem to be driving people away.

Thayer Verschoor:
I think, Ted, I think that's another thing people will be concerned about. You're absolutely right. The Phoenix city council said we're going to raise tax on food 2 cents, unprecedented. That's going to happen. That's not a vote of the people. That's going to happen. That's going to happen right before the vote. You have several cities; my town of Gilbert has an 18% sales tax increase for the town that is going to be on the May 18th ballot. Of course last night we know that the Congress just passed down, there will be huge tax increases and people out there aren't sure. People are looking around and seeing, gosh, I'm getting hit on taxes in my town, from my state, from my federal government. I'm already overtaxed. I'm already spending half of my income on taxes and fees. So I think there's going to be a lot of resistance to actually saying well, I'm going to tax myself further when all of these other taxes are going on out there.

Ted Simons:
Do you have a response?

John Wright:
It’s important to remember this is temporary. This is a temporary bridge to get out of the deficit. It's in the Constitution that it will sunset. It will sunset. It can't get spent by legislature. Do we have the right balance of taxes on property, equipment and income and wealth and sales and let's put together the right package.

Thayer Verschoor:
Ted, I don't think most people out there don't think it will be temporary because there will always be some important emergency just like the transportation tax that was supposed to sunset and prop 400 came eight years ago and we extended that to build light rail. There's always other good reasons to extend that tax. And so I don't think people believe that.

Ted Simons:
There are some people who believe that -- the more conservative members of the State Legislature, yourself included and those who are against this tax, aren't really all that upset that these services are going to be gone. That this is some sort of an attempt, an ideological attempt to dismantle government as it is into a new shape, into a new beast, if you will. Are they wrong?

Thayer Verschoor:
I think there's -- I think there's -- I think as we come to this point, that's a question we have to ask. What is the fundamental role of government? Can we do it more efficiently? Can we do it better? I think just as every company and every household out there has to look at when their income reduces, you know, do I need -- do I need -- do I need the 50-inch TV or will a 26-inch television do? Do I need the Cadillac or will, you know a more economical vehicle that gets me to work do? I think that's what we have to ask. What -- can we do things a lot more efficiently, and I think we can.

John Wright:
We're not talking 50-inch TVs and Cadillacs. We're talking about basic state services. We're talking about Constitutional obligations of the legislature. Is there an ideological agenda here? I think if you look at the language, there might be some. For other cuts in the budget, it doesn't say curtail or suspend. It says permanently eliminate. Permanently eliminate program in education and health care and social services.

Ted Simons:
But the analogy, we hear this analogy a lot. Household finances right now are hurting. They're cutting back. They're having to make ends meet. Why can't the state do that?

John Wright:
And some households are going out and finding a second job. Some households are trying to find additional money, starting entrepreneurial businesses on the side. Some households are trying to do the difficult balancing act. Parents are not going to stop feeding their children and Arizona should not stop educating their children.

Thayer Verschoor:
And raising taxes will make it difficult to keep that job or find a job. When people stop buying stuff, people lay off those employees that sell. When people stop buying stuff, they stop ordering stuff which means manufacturing is down. It's a whole cycle that we get into here. We need to reverse that cycle. You know, this tax -- this tax is just the first tax. If this tax passes, there will be other taxes that folks will ask for rather than reduce the spending in government and reduce the size of government. They'll try to grow it by using other taxes, and quite frankly, you've got several cities out there that will have double digit taxes.

Ted Simons:
Compare and contrast taxes and public services. Where do they balance with you?

Thayer Verschoor:
You know, I think public services you have to look at what's essential. You know protection, police, fire, those things that are essential, those things that are Constitutional. Education, John is right; education is a Constitutional mandate in our Constitution in this state. So I think the legislature has reflected that in the money that it's spent on education. If you look -- if you look at the total number of sales tax revenues coming into the state, it's about $6.3 billion for this year. Out of that 6.3 billion, about 4.6 billion of that is going to K-12 education. Another billion of that is going to university. That doesn't leave a lot left over for other things. I think we've reflected that and I think we'll continue to reflect that.

John Wright:
I think that's just an example that the 6.3 billion we're bringing in is insufficient and it's inadequate to meet the basic needs that the citizens of this state are getting. To reduce the quality of life and make us less attractive for businesses and families, we can't afford that loss.

Ted Simons:
We have all sorts of public safety groups. We have business groups; we have education leaders, lots of relatively heavy hitters, big names coming out in support of the tax. I'm guessing for the most part these are people that want to see Arizona succeed. They want to have Arizona's first in mind for this particular campaign. I'm guessing you feel the same way. Why are they, again, wrong in their idea? These are folks that stand to lose a lot if this tax goes through and the economy takes a dump.

Thayer Verschoor:
I think you just nailed it. These are folks that receive a lot of government money and they want to keep that money going. I think what we need to look at-- I mean, we've seen this over and over again. You know, you can keep throwing more money at the problem and it doesn't necessarily fix the problem. You need to look at things that are outcomes. You have groups that are out there, we talked about how much money is going to education, how much they're looking to lose, another 600 million. You have the hospital association. They're looking at losing a billion dollars. When you look at them, when you look at those choices, it's nothing for them to kick in 100 grand or 200 grand to --

John Wright:
I'm not sure how the Arizona chamber of commerce and industry is getting a whole lot of government money to spend. They believe this is good for business and industry in Arizona. When you have business groups representing a broad cross-section of our private sector, when you have individual businesses, greater Phoenix leadership, the leaders of some of the most successful private enterprises in Phoenix in Arizona, when you have that group coming together with the rest of us, I think that's a coalition representative of the state and representative of the state's needs.

Ted Simons:
We'll stop it right there. Great discussion. Thanks so much.

John Wright:
Thank you.

Thayer Verschoor:
My pleasure.

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