Horizon, Host: Ted Simons

May 1, 2007


Host: Matthew Whitaker

Arizona Stories


  • Tuesday, HORIZON will begin airing new segments from its iconic series Arizona Stories. These features present in-depth examinations of the people, places and events that shaped Arizona’s history.
Guests:
  • Kirk Adams - State Representative
  • Steve Farley - State Representative


View Transcript
>>Matthew Whitaker:
Tonight on Horizon, a state-run healthcare plan for small businesses asking for funding from the State. State lawmakers join us to discuss it. Plus, we begin our feature series, "Arizona Stories". Tonight, the rich tale of a place that was both a city and legend that shapes part of Arizona's history. Those stories, next, on Horizon.

>>Announcer:
Horizon is made possible by contributions from the Friends of Eight, members of your Arizona PBS Station. Thank you.

>>Matthew Whitaker:
Good evening. I'm Matthew Whitaker. Welcome to Horizon. Before we get to those stories, we have some special guests in the studio next door tonight. It is Phone-A-Lawyer Night here at Eight. You can call the number on your screen and get free legal advice by telephone. Attorneys from the Maricopa County Bar Association are taking your calls until 9:00 tonight. That number is 480-965-1998.

>>Matthew Whitaker:
Thousands marched from the [Arizona State] Fairgrounds to the Capitol today. The May Day march comes a year after national economic boycotts by Hispanics, which followed marches last year. Today, participants were demonstrating for comprehensive immigration reform. Meanwhile, a counter demonstration at the capitol included organizations opposed to the march. Many of them collecting signatures for potential ballot propositions aimed at curbing Illegal Immigration. There were few in number compared to those who gathered on Wesley Bolin plaza. A sea of American Flags flew among demonstrators with signs chanting "Sí, Se Puede: Yes, We Can."

>>Elias Bermudez:
This is truly a response from the people. It doesn’t matter who the leader is. It doesn’t matter who the organization is. It is the people who is responding, and the people that we owe ourselves to. These people have fear, but they turn their fear into courage, and they’re here telling the Congress of the United States that they must act, and they must act now. The problems are the border, the insecurity of our border needs to be resolved, and needs to be resolved by the legal mechanism where people can come here legally, because right now we have none.

>>Buffalo Rick Galeener:
I have a nice house and the guy next door doesn't have it. He has a trailer. Does that give him the right to move into my house? No, it doesn't. It's the same thing. If you want to work, and you want to come to this country legally, we’re more than willing to help you and give you every advantage in the world. That's what this country is about. But to come here and demand services, demand free things, it's just not the American Way.

>>Gov. Janet Napolitano:
For the people who are marching, they still want to make a point. And, you know, march or no march, I think we still need the US Congress to pass a comprehensive immigration bill. And until they do that, they are really shortchanging states like Arizona, particularly states like Arizona that sit on the border. So the march is one thing, but it doesn't relieve the Congress of its responsibility.

>>Matthew Whitaker:
The governor made those comments today at a news conference where she revealed the new Arizona State Quarter. The coin will feature two iconic Arizona images: the Grand Canyon and the Saguaro Cactus. Governor Napolitano released the official quarter design with students at Hamilton Elementary School in Phoenix and talked about the process of picking the quarter.

>>Gov. Janet Napolitano:
It really paid off. The Governor's Office received more than 4,200 ideas for the design of the Quarter, and it came from 79 different communities across our State. Now, the commission, once they got all those ideas, they had to get in the process of narrowing it down to the finalists. And they narrowed it down to five designs: one was the Grand Canyon. One was the Grand Canyon with a Saguaro Cactus. One was the Saguaro Cactus with the desert. One was Major John Wesley Powell's expedition through the Grand Canyon. And one was the Navajo Codetalkers. So once we had the 5 finalists, we then asked Arizonans for their input once again. And through an online ranking process, 112,000 Arizonans, that's a lot, 112,000 Arizonans submitted their rankings of the five designs.

>>Matthew Whitaker:
The governor selected the design ranked highest by Arizonans who voted on the Internet.

>>Matthew Whitaker:
More than 26,000 people in the State are enrolled in medical coverage through Healthcare Group of Arizona. The health plan, operated by the Arizona Healthcare Cost Containment System, is for small businesses and individuals who are employees of the State and political subdivisions. Administrators of Healthcare Group say that they are running in the red, and need funding to stay viable. Here with two differing views about Healthcare Group of Arizona are Representative Kirk Adams and Representative Steve Farley. I want to welcome both of you to Horizon, and thank you for joining us.

>>Representative Kirk Adams:
Thank you.

>>Matthew Whitaker:
I want to begin with you, Representative Farley. I have a question for you. What exactly is Healthcare Group, and how exactly do they operate?

>>Representative Steve Farley:
Well, Healthcare Group was a plan which started about 25 years ago, which helps provide coverage for extremely small businesses. Actually, groups of 50 or less, but 95\% of the people covered right now are groups of three or less. These are people who are self-employed, they are small businesses. And they represent, really, an important part of the Arizona economy. At the same time, because their groups so small, private health insurers haven't been offering plans that will cover them for a price that they can afford. And they also haven't been covering them when they preexisting conditions, certain health conditions, that will include them. So, the state stepped in, initially in 1982, to cover these people who have basically no other place to go. In 2004, the State Legislature decided to set them free from state funding and allow them to market in certain limited way. Since then, the membership has doubled approximately to about just over 26,000, as you said, today.

>>Matthew Whitaker:
OK, and so, why are they running in the red?

>>Representative Steve Farley:
Well, part of that happened, the seeds of that were sowed in 2004, when the Legislature set them free. Unfortunately, they did the equivalent of saying “sink or swim”, and then tied boulders to the feet of Healthcare Group and threw it in the river. What they did was they put obstacles in the way. They said that you cannot default to access rates for hospital stays. So, in effect, the plan has to pay full fare any time someone is hospitalized, which is a fare that nobody else pays. They put a six-month “bare period” in place, saying that you have to go without health insurance at all for six months in order to qualify. So the people that finally did go through that six-month waiting period were people who really needed health insurance. They tended to be more sick, and they were even sicker because they had to wait six months without health insurance. They also didn't allow people who were sold insurance to take a commission on renewals. It was just on initial. All these things made the situation pretty bad, and the situation which the people who were in Healthcare Group tended to be more sick than the general public, and over the last few months of last year, there was a huge spike in hospitalizations. And that's created the situation we are in today.

>>Matthew Whitaker:
OK, Representative Adams, would you like to comment on, chime in on what he said?

>>Representative Kirk Adams:
Yea, absolutely. That reminds me of the Democratic Statesman Daniel Patrick Moynihan, who says everyone is entitled to their own opinion, but not to their own facts. The fact is the bill Representative Farley is referring to is Senate Bill 1168, which was passed out of the Legislature and signed by the Governor. The interesting thing about that bill is that it was supported by the Director of Access, Mr. Tony Rogers, who testified in behalf of the bill, as did the Arizona Public Health Association. So, it was an Access Bill. We have to remember that Healthcare Group is under the direction of Access, which is an Executive Agency, which is under the management of the Governor's Office. So the problems that Healthcare Group are experiencing are problems of management as well as structure.

>>Matthew Whitaker:
OK. Well, is having a Healthcare Group, is-- how important is it? And is it viable? I guess is the question.

>>Representative Steve Farley:
Well, it's vitally important. I have received many, many emails, scores of emails from people over the last few months who are Healthcare Group members. They have said Healthcare Group has quite literally saved their lives. Healthcare Group, in one case, the guy said it allowed him to get married because his wife wasn't going to be able to be covered on any other health insurance plan because of a preexisting condition, and Healthcare Group enabled him to do that. It covers people who are working hard, and don't have really any other options. I mean, if there was actual private coverage from healthcare insurance companies in the State that offered affordable coverage and covered these preexisting conditions for very small groups, we wouldn't have to have Healthcare Group. But as it is, as things are going, Healthcare Group is providing a need that isn't being met anywhere else, so it's vitally important to these people.

>>Matthew Whitaker:
OK. You want to respond to that?

>>Representative Kirk Adams:
Yea, the second half of your question was: is it viable? First half I agree with. It is vitally important to a certain segments of our population in Arizona. Those 26,000 people who currently rely upon Healthcare Group for their health insurance. But the second part of your question was: is it viable? And the answer is right now, it is not viable. As a matter of fact, the losses of Healthcare Group are $23 million. And by some estimates as high as $27 million in fiscal year 2007. That means that Healthcare Group is losing over $2 million a month. Now, why that is a problem? That's a problem because those dollars are needed to be able to pay claims. As recently as March 29, the Director of Access testified in front of the Senate Health Committee that Healthcare Group was on plan and was going to break even by 2009, which is a department goal. Two weeks later, he sent a letter completely reversing his previous statements, telling us Healthcare Group had a $23 million deficit, and they are requesting an $8 million emergency bailout for Healthcare Group so they could pay claims that have already occurred. Now, the only reason the person carries insurance or pays for insurance is so that someone can pay those medical claims when they need them most. And so, I think it's incumbent upon this Lgislature to make sure that we put forward a plan that makes Healthcare Group stable and viable into the future, so that those people who we, the State of Arizona sell insurance to, can count on us to pay those claims well into the future.

>>Matthew Whitaker:
OK, and you propose some changes to the operation of Healthcare Group. What exactly did you propose?

>>Representative Kirk Adams:
I had a bill, House Bill 2498, that would increase the transparency in Healthcare Group, which is one of the problems that we have. As a Legislature, we don't have the ability to get accurate data on what's actually happening inside of Healthcare Group. The recent sort of “April Surprise” that came forward with this letter, of this $23 million deficit, illustrates that perfectly. The second thing we did was try to provide some financial accountability to Healthcare Group, so that we can make sure that it was stable in the future. That bill is dead right now. But we have to do is we have to address the immediate problem with Healthcare Group. And that is they need an immediate appropriation to continue to keep going. But to do that without additional reforms, I think is a mistake and will only make the problem much, much bigger in the future. When you find yourself in a hole, the first thing you have to do is stop digging. Healthcare Group is in a hole. And we need to stop digging by capping enrollment right now until we get a handle on this problem.

>>Matthew Whitaker:
OK.

>>Representative Kirk Adams:
When we implement some of the other reforms that Access has suggested as well.

>>Matthew Whitaker:
Well, did you propose restructuring completely?

>>Representative Kirk Adams:
My initial bill did propose a complete restructuring in terms of the regulatory environment. But now that-- but I got to tell you when I proposed that legislation, it was based upon my review of the limited financial data that I had. And I predicted that over the next year, the claims costs for Healthcare Group would crescendo to a point where there would be a major bailout. What I didn't know is that it would happen so soon, literally a month after the bill was introduced. So the problem is more acute than even I had anticipated, and we need to address it now.

>>Matthew Whitaker:
OK. And Representative, you want to respond.

>> Representative Steve Farley:
I agree with Representative Adams we do want to be able to help Healthcare Group through this current crisis, and we do need to make reforms to make sure that it does not face this crisis in the future. We totally agree on that. However, things like enrollment caps will do precisely the opposite. An enrollment cap means we will not accept new members beyond who is there today. Who is there today are people who are more sick than the average population. If we are able to grow Healthcare Group dramatically, by eliminating some of these obstacles that the Legislature did put in place of Healthcare Group in 2004, then we would be able to grow Healthcare Group dramatically and bring in healthy people who are paying premiums. The fact is that if you are not allowing people to join who are healthy, you end up with that concentrated pool of sick people, and you don't have more people paying premiums who are healthy to be able to help with that. So if we can do that, and remember that deficit of $23 million, 10 to $12 million of that can be attributed only to that requirement in the Legislature put on Healthcare Group that it not default to access hospital rates. If we can do that as a reform, and allow it to default to access hospital rates, we will be paying dramatically less, $10 million to $12 million this year out of that deficit for hospital rates, and you can basically stop that type of self-inflicted bleeding.

>>Matthew Whitaker:
OK. This is an important issue and I can tell you want to respond to that. So--

>>Representative Kirk Adams:
Yea. There's a basic rule of economics. If you are selling each widget at a loss, selling more widgets doesn't-- it only increases your losses. And so selling insurance premiums at a loss, the more we sell only will increase the total amount of losses that we are experiencing. And when you have a program that's literally bleeding, bleeding out right now. In fact, the Management of Access predicted or forecast an $8 million deficit for fiscal year 2007. The actual deficit, as we know right now, is $23 million. So clearly they do not have a handle on what is really happening inside Healthcare Group. And all we are saying is this. Look, we have to figure this out, and the way to figure that out right now is to cap this program so we do less damage until we figure out exactly what's happening, then let's address it for the long term. But short-term, you got to cap it. Long term, you have to address some of the issues that Representative Farley brought up relative to the uninsurables, those people what can't go anywhere else to get this coverage. And so part of this legislation that I'll be proposing very soon will establish an Interim Study Committee to look at developing a “high-risk pool” for the State of Arizona, so you can get those very sick people coverage and fix Healthcare Group at the same time.

>>Matthew Whitaker:
OK, and quickly, because we have a couple minutes. Is this a budget issue? I mean, is Healthcare Group going to need an appropriation for this?

>>Representative Kirk Adams:
Yes. Absolutely.

>>Matthew Whitaker:
OK.

>>Representative Steve Farley:
Yes, I agree on that also. I would disagree. I think it's important to point out that people are not widgets. Particularly when it comes to health insurance. And the reason enrollment cap would not work is because the people you want to attract to a health insurance pool are people who are lower risk than the current high-risk pool. I am happy we are putting a task force together this summer. I am hoping to be able to help with that this summer because I think we do need to look at maybe a separate high-risk pool, and make that happen. I think we can look at a future in which we are able to cover all the people who need to have their coverage who aren't getting coverage from the private sector right now, and the small business sector but it needs to make sure we are getting rid of these obstacles and coming up with a cooperative plan. I would love to this come into this session and have a bipartisan plan to make sure all the people who desperately depend on Healthcare Group can feel rest assured they will have that coverage into the future.

>>Matthew Whitaker:
Final question, where do we go? Where do we move now?

>>Representative Kirk Adams:
Well, number one we don't do is we don't stick with the status quo. That's clearly not working, and it puts all 26,000 current subscribers of Healthcare Group at risk. Every single one of them is at risk under this current plan. So we do have to cap enrollment. We have to establish a high-risk pool. We have to make sure that access follows through on increasing rates and deductibles and premiums. All those things that are economically necessary so that those 26,000 people can be assured that the policy that the state of Arizona sold them will be there in the future to cover their claims costs.

>>Matthew Whitaker:
OK. Representative Adams, Representative Farley, thank you for joining us on “Horizon” . Thank you.

>>Representative Steve Farley:
Thank you, it's been a pleasure.

>>Representative Kirk Adams:
Thank you.

>>Matthew Whitaker:
If you were a kid growing up in the Valley in the 60's and 70's, there was a destination that would create unbridled excitement and anticipation. It was a place where the Old West came alive and Papago Park. That place no longer exists, but the legend remains. And tonight's "Arizona story" producer Larry Lemmons and videographer Richard Torruellas take us to the past and beyond in search of a Legend City.

>>Larry Lemmons:
A legend is told of a place where children could go. Where the Old West lived within the gates of the city. Today in that place a building now stands on the land they once called Legend City.

>>John Baker:
I got to go to Legend City for the very first time that summer of '63. Sadly, I have no recollection of that visit because I was only five years old. But I'm told we saw Wallace & Ladmo, and Vonda Kay Van Dyke, and we had a great time.

>> Legend City was the valley's first amusement park. It sat on 30 acres in Papago Park. From the moment it opened its gates in 1963, children and their parents adored the park's Old West theme. It survived 20 years before it ended its run in 1983. All that remains of that time are artifacts, some of which were collected by Glendale resident John Baker.

>>John Baker:
This is a Legend City pennant from the early days of the park, circa 1963. It features the original Legend City logo. This was worn by the young ladies who would sell Ice Cream at the Shamrock Ice Cream Parlor at Legend City. This sign adorned the Antique Car ride at Legend City for many years.

[Ghosts of Legend City by Dolan Ellis plays]

>>Larry Lemmons:
Baker created the Legend City website.

>>John Baker:
Through the magic of the Internet, we are able to visit these places that no longer exist in reality.

>>Larry Lemmons:
The journey to the Virtual Legend City can be made quickly and easily. To discover the source of the real Legend City requires a journey of greater distance. Time might very well run constantly, like the waters of a river. There is a timelessness about the beauty of Provo, Utah. Nestled between snow capped peaks and Lake Utah. It's the home of Brigham Young University and the Crandall Historical Printing Museum.

>>Lewis Crandall:
this is a replica of the first printing press. It's a replica. But it's a real printing press. This prints just like Gutenberg would have printed 600 years ago.

>>Larry Lemmons:
Lewis Crandall created this homage to the history of printing. But while in his 20's, the young man who owned an advertising agency in Phoenix, made a trip to Disneyland that changed his life.

>>Lewis Crandall:
All the way back, all I could think about: we need a Disneyland for Phoenix. My first idea was we would make something to show the history of Arizona. And that's when we came up with the idea of maybe making a part that would show the legends of Arizona. Someone came up with the idea, and it was me because Lewis Crandall Legend City, I thought that would be kind of a fun tie-in. There's my drawing of Legend City. Now, we did at this time have that piece of property. And so we, it had two gullies, one going on the east side, and one on the west side. So that would be a perfect place to put a lake, and the perfect place to put a ravine there, you see.

>>Larry Lemmons:
Managers of Disneyland and Six Flags over Texas helped the young entrepreneur. Many people in Phoenix also supported Crandall with his ambitious adventure. The Board of Directors was founded and stocks were sold. Anticipation was feverish in the Valley as the park was being built. Headlines heralded the arrival of the train, and hundreds showed up for opening day in the summer of 1963. Even Governor [Paul] Fannin. Nevertheless there was a smaller crowd than expected.

>>Lewis Crandall:
Everybody loved Legend City. But the only problem it was so blinking hot down there.

>>Larry Lemmons:
But the kids let their imaginations run free.

>>John Baker:
It had a very magical atmosphere for a kid. Of course, it was an Old West environment, which was very popular at that time. My strongest memories are of attractions like the Lost Dutchman Mine ride which, for many people, is was the most popular attraction at the park. The river ride was always very popular. Probably second only to the Dutchman Mine.

>>Larry Lemmons:
Despite the quality of the park, the heat and the lack of attendance began to take a toll. Crandall and his Board were running into financial difficulties after only the first year.

>>Lewis Crandall:
We were struggling. That first year was tough. Worried. A fabulous park. I had meetings with the Governor at the time, pleading with him to help us. This park's going to go under if we don't do something about it.

>>Larry Lemmons:
A decision was made to replace Crandall with an experienced manager.

>>Lewis Crandall:
In fact, I was -- I voted for that. I felt with he needed a real park operator.

>>Larry Lemmons:
Crandall would return to Legend City to assist subsequent owners, but the park eventually began a slow decline.

>>Lewis Crandall:
And about that time, I kind of lost track of Legend City. I was proud of the fact that it was still in existence, people loved Legend City.

>>John Baker:
1980 was the last time I was there. By that time I was a young adult. I was 22 years old. And Legend City, of course, was nearing the end. And the thing I remember most about that is was the park was very run down. None of the rides worked properly anymore. They just let it go. And so I remember feeling very sad that Legend City had come to that.

>>Larry Lemmons:
Today, Lewis Crandall is deeply satisfied telling the history of printing from the Gutenberg Bible to the Book of Mormon. But also today, sharing a common nostalgia with many Arizonans. He looks back fondly at that time, when he built a city for the children of Phoenix.

>>Lewis Crandall:
Well, all my whole life was with Legend City. I loved the place. It was a major part of my life. The thrill of my life was able to build a Disneyland. A Disneyland for Arizona. Legend City.

>>Matthew Whitaker:
We will be featuring "Arizona stories" segments each Tuesday night here on “Horizon”. And starting June 12, you can see the new series of the half hour program "Arizona Stories" every Tuesday night at 7:30 PM.

>>David Majure:
How can a school meet, even greatly exceed, State measurements of students achievement, but fail when it comes to the Federal standard for Adequate Yearly Progress? It's not as uncommon as it might sound. Join us as we explore how we grade students and their schools Wednesday at 7:00, on Horizon.

>>Matthew Whitaker:
Before we leave tonight, a reminder. You can call the number on your screen and get free legal advice by phone. Attorneys from the Maricopa County Bar Association are here for “Phone-a-Lawyer” night answering calls in the studio until 9:00. That number is 480-965-1998. Thanks for joining us on this Tuesday evening. I'm Matthew Whitaker. Good night.

>>Announcer:
If you have comments about Horizon, please contact us at the addresses listed on your screen. Your name and comments may be used on a future edition of Horizon.

>>Announcer: Horizon is made possible by contributions from the “Friends of Eight”, members of your Arizona PBS Station. Thank you.

Healthcare Group


  • Healthcare Group, a state-run health care plan for small business, is running at a deficit and asking for funding from the state. State lawmakers Representative Kirk Adams and Representative Steve Farley join us to discuss it.
Guests:
  • Kirk Adams - State Representative
  • Steve Farley - State Representative
Category: Medical/Health

View Transcript
>>Matthew Whitaker:
Tonight on Horizon, a state-run healthcare plan for small businesses asking for funding from the State. State lawmakers join us to discuss it. Plus, we begin our feature series, "Arizona Stories". Tonight, the rich tale of a place that was both a city and legend that shapes part of Arizona's history. Those stories, next, on Horizon.

>>Announcer:
Horizon is made possible by contributions from the Friends of Eight, members of your Arizona PBS Station. Thank you.

>>Matthew Whitaker:
Good evening. I'm Matthew Whitaker. Welcome to Horizon. Before we get to those stories, we have some special guests in the studio next door tonight. It is Phone-A-Lawyer Night here at Eight. You can call the number on your screen and get free legal advice by telephone. Attorneys from the Maricopa County Bar Association are taking your calls until 9:00 tonight. That number is 480-965-1998.

>>Matthew Whitaker:
Thousands marched from the [Arizona State] Fairgrounds to the Capitol today. The May Day march comes a year after national economic boycotts by Hispanics, which followed marches last year. Today, participants were demonstrating for comprehensive immigration reform. Meanwhile, a counter demonstration at the capitol included organizations opposed to the march. Many of them collecting signatures for potential ballot propositions aimed at curbing Illegal Immigration. There were few in number compared to those who gathered on Wesley Bolin plaza. A sea of American Flags flew among demonstrators with signs chanting "Sí, Se Puede: Yes, We Can."

>>Elias Bermudez:
This is truly a response from the people. It doesn’t matter who the leader is. It doesn’t matter who the organization is. It is the people who is responding, and the people that we owe ourselves to. These people have fear, but they turn their fear into courage, and they’re here telling the Congress of the United States that they must act, and they must act now. The problems are the border, the insecurity of our border needs to be resolved, and needs to be resolved by the legal mechanism where people can come here legally, because right now we have none.

>>Buffalo Rick Galeener:
I have a nice house and the guy next door doesn't have it. He has a trailer. Does that give him the right to move into my house? No, it doesn't. It's the same thing. If you want to work, and you want to come to this country legally, we’re more than willing to help you and give you every advantage in the world. That's what this country is about. But to come here and demand services, demand free things, it's just not the American Way.

>>Gov. Janet Napolitano:
For the people who are marching, they still want to make a point. And, you know, march or no march, I think we still need the US Congress to pass a comprehensive immigration bill. And until they do that, they are really shortchanging states like Arizona, particularly states like Arizona that sit on the border. So the march is one thing, but it doesn't relieve the Congress of its responsibility.

>>Matthew Whitaker:
The governor made those comments today at a news conference where she revealed the new Arizona State Quarter. The coin will feature two iconic Arizona images: the Grand Canyon and the Saguaro Cactus. Governor Napolitano released the official quarter design with students at Hamilton Elementary School in Phoenix and talked about the process of picking the quarter.

>>Gov. Janet Napolitano:
It really paid off. The Governor's Office received more than 4,200 ideas for the design of the Quarter, and it came from 79 different communities across our State. Now, the commission, once they got all those ideas, they had to get in the process of narrowing it down to the finalists. And they narrowed it down to five designs: one was the Grand Canyon. One was the Grand Canyon with a Saguaro Cactus. One was the Saguaro Cactus with the desert. One was Major John Wesley Powell's expedition through the Grand Canyon. And one was the Navajo Codetalkers. So once we had the 5 finalists, we then asked Arizonans for their input once again. And through an online ranking process, 112,000 Arizonans, that's a lot, 112,000 Arizonans submitted their rankings of the five designs.

>>Matthew Whitaker:
The governor selected the design ranked highest by Arizonans who voted on the Internet.

>>Matthew Whitaker:
More than 26,000 people in the State are enrolled in medical coverage through Healthcare Group of Arizona. The health plan, operated by the Arizona Healthcare Cost Containment System, is for small businesses and individuals who are employees of the State and political subdivisions. Administrators of Healthcare Group say that they are running in the red, and need funding to stay viable. Here with two differing views about Healthcare Group of Arizona are Representative Kirk Adams and Representative Steve Farley. I want to welcome both of you to Horizon, and thank you for joining us.

>>Representative Kirk Adams:
Thank you.

>>Matthew Whitaker:
I want to begin with you, Representative Farley. I have a question for you. What exactly is Healthcare Group, and how exactly do they operate?

>>Representative Steve Farley:
Well, Healthcare Group was a plan which started about 25 years ago, which helps provide coverage for extremely small businesses. Actually, groups of 50 or less, but 95\% of the people covered right now are groups of three or less. These are people who are self-employed, they are small businesses. And they represent, really, an important part of the Arizona economy. At the same time, because their groups so small, private health insurers haven't been offering plans that will cover them for a price that they can afford. And they also haven't been covering them when they preexisting conditions, certain health conditions, that will include them. So, the state stepped in, initially in 1982, to cover these people who have basically no other place to go. In 2004, the State Legislature decided to set them free from state funding and allow them to market in certain limited way. Since then, the membership has doubled approximately to about just over 26,000, as you said, today.

>>Matthew Whitaker:
OK, and so, why are they running in the red?

>>Representative Steve Farley:
Well, part of that happened, the seeds of that were sowed in 2004, when the Legislature set them free. Unfortunately, they did the equivalent of saying “sink or swim”, and then tied boulders to the feet of Healthcare Group and threw it in the river. What they did was they put obstacles in the way. They said that you cannot default to access rates for hospital stays. So, in effect, the plan has to pay full fare any time someone is hospitalized, which is a fare that nobody else pays. They put a six-month “bare period” in place, saying that you have to go without health insurance at all for six months in order to qualify. So the people that finally did go through that six-month waiting period were people who really needed health insurance. They tended to be more sick, and they were even sicker because they had to wait six months without health insurance. They also didn't allow people who were sold insurance to take a commission on renewals. It was just on initial. All these things made the situation pretty bad, and the situation which the people who were in Healthcare Group tended to be more sick than the general public, and over the last few months of last year, there was a huge spike in hospitalizations. And that's created the situation we are in today.

>>Matthew Whitaker:
OK, Representative Adams, would you like to comment on, chime in on what he said?

>>Representative Kirk Adams:
Yea, absolutely. That reminds me of the Democratic Statesman Daniel Patrick Moynihan, who says everyone is entitled to their own opinion, but not to their own facts. The fact is the bill Representative Farley is referring to is Senate Bill 1168, which was passed out of the Legislature and signed by the Governor. The interesting thing about that bill is that it was supported by the Director of Access, Mr. Tony Rogers, who testified in behalf of the bill, as did the Arizona Public Health Association. So, it was an Access Bill. We have to remember that Healthcare Group is under the direction of Access, which is an Executive Agency, which is under the management of the Governor's Office. So the problems that Healthcare Group are experiencing are problems of management as well as structure.

>>Matthew Whitaker:
OK. Well, is having a Healthcare Group, is-- how important is it? And is it viable? I guess is the question.

>>Representative Steve Farley:
Well, it's vitally important. I have received many, many emails, scores of emails from people over the last few months who are Healthcare Group members. They have said Healthcare Group has quite literally saved their lives. Healthcare Group, in one case, the guy said it allowed him to get married because his wife wasn't going to be able to be covered on any other health insurance plan because of a preexisting condition, and Healthcare Group enabled him to do that. It covers people who are working hard, and don't have really any other options. I mean, if there was actual private coverage from healthcare insurance companies in the State that offered affordable coverage and covered these preexisting conditions for very small groups, we wouldn't have to have Healthcare Group. But as it is, as things are going, Healthcare Group is providing a need that isn't being met anywhere else, so it's vitally important to these people.

>>Matthew Whitaker:
OK. You want to respond to that?

>>Representative Kirk Adams:
Yea, the second half of your question was: is it viable? First half I agree with. It is vitally important to a certain segments of our population in Arizona. Those 26,000 people who currently rely upon Healthcare Group for their health insurance. But the second part of your question was: is it viable? And the answer is right now, it is not viable. As a matter of fact, the losses of Healthcare Group are $23 million. And by some estimates as high as $27 million in fiscal year 2007. That means that Healthcare Group is losing over $2 million a month. Now, why that is a problem? That's a problem because those dollars are needed to be able to pay claims. As recently as March 29, the Director of Access testified in front of the Senate Health Committee that Healthcare Group was on plan and was going to break even by 2009, which is a department goal. Two weeks later, he sent a letter completely reversing his previous statements, telling us Healthcare Group had a $23 million deficit, and they are requesting an $8 million emergency bailout for Healthcare Group so they could pay claims that have already occurred. Now, the only reason the person carries insurance or pays for insurance is so that someone can pay those medical claims when they need them most. And so, I think it's incumbent upon this Lgislature to make sure that we put forward a plan that makes Healthcare Group stable and viable into the future, so that those people who we, the State of Arizona sell insurance to, can count on us to pay those claims well into the future.

>>Matthew Whitaker:
OK, and you propose some changes to the operation of Healthcare Group. What exactly did you propose?

>>Representative Kirk Adams:
I had a bill, House Bill 2498, that would increase the transparency in Healthcare Group, which is one of the problems that we have. As a Legislature, we don't have the ability to get accurate data on what's actually happening inside of Healthcare Group. The recent sort of “April Surprise” that came forward with this letter, of this $23 million deficit, illustrates that perfectly. The second thing we did was try to provide some financial accountability to Healthcare Group, so that we can make sure that it was stable in the future. That bill is dead right now. But we have to do is we have to address the immediate problem with Healthcare Group. And that is they need an immediate appropriation to continue to keep going. But to do that without additional reforms, I think is a mistake and will only make the problem much, much bigger in the future. When you find yourself in a hole, the first thing you have to do is stop digging. Healthcare Group is in a hole. And we need to stop digging by capping enrollment right now until we get a handle on this problem.

>>Matthew Whitaker:
OK.

>>Representative Kirk Adams:
When we implement some of the other reforms that Access has suggested as well.

>>Matthew Whitaker:
Well, did you propose restructuring completely?

>>Representative Kirk Adams:
My initial bill did propose a complete restructuring in terms of the regulatory environment. But now that-- but I got to tell you when I proposed that legislation, it was based upon my review of the limited financial data that I had. And I predicted that over the next year, the claims costs for Healthcare Group would crescendo to a point where there would be a major bailout. What I didn't know is that it would happen so soon, literally a month after the bill was introduced. So the problem is more acute than even I had anticipated, and we need to address it now.

>>Matthew Whitaker:
OK. And Representative, you want to respond.

>> Representative Steve Farley:
I agree with Representative Adams we do want to be able to help Healthcare Group through this current crisis, and we do need to make reforms to make sure that it does not face this crisis in the future. We totally agree on that. However, things like enrollment caps will do precisely the opposite. An enrollment cap means we will not accept new members beyond who is there today. Who is there today are people who are more sick than the average population. If we are able to grow Healthcare Group dramatically, by eliminating some of these obstacles that the Legislature did put in place of Healthcare Group in 2004, then we would be able to grow Healthcare Group dramatically and bring in healthy people who are paying premiums. The fact is that if you are not allowing people to join who are healthy, you end up with that concentrated pool of sick people, and you don't have more people paying premiums who are healthy to be able to help with that. So if we can do that, and remember that deficit of $23 million, 10 to $12 million of that can be attributed only to that requirement in the Legislature put on Healthcare Group that it not default to access hospital rates. If we can do that as a reform, and allow it to default to access hospital rates, we will be paying dramatically less, $10 million to $12 million this year out of that deficit for hospital rates, and you can basically stop that type of self-inflicted bleeding.

>>Matthew Whitaker:
OK. This is an important issue and I can tell you want to respond to that. So--

>>Representative Kirk Adams:
Yea. There's a basic rule of economics. If you are selling each widget at a loss, selling more widgets doesn't-- it only increases your losses. And so selling insurance premiums at a loss, the more we sell only will increase the total amount of losses that we are experiencing. And when you have a program that's literally bleeding, bleeding out right now. In fact, the Management of Access predicted or forecast an $8 million deficit for fiscal year 2007. The actual deficit, as we know right now, is $23 million. So clearly they do not have a handle on what is really happening inside Healthcare Group. And all we are saying is this. Look, we have to figure this out, and the way to figure that out right now is to cap this program so we do less damage until we figure out exactly what's happening, then let's address it for the long term. But short-term, you got to cap it. Long term, you have to address some of the issues that Representative Farley brought up relative to the uninsurables, those people what can't go anywhere else to get this coverage. And so part of this legislation that I'll be proposing very soon will establish an Interim Study Committee to look at developing a “high-risk pool” for the State of Arizona, so you can get those very sick people coverage and fix Healthcare Group at the same time.

>>Matthew Whitaker:
OK, and quickly, because we have a couple minutes. Is this a budget issue? I mean, is Healthcare Group going to need an appropriation for this?

>>Representative Kirk Adams:
Yes. Absolutely.

>>Matthew Whitaker:
OK.

>>Representative Steve Farley:
Yes, I agree on that also. I would disagree. I think it's important to point out that people are not widgets. Particularly when it comes to health insurance. And the reason enrollment cap would not work is because the people you want to attract to a health insurance pool are people who are lower risk than the current high-risk pool. I am happy we are putting a task force together this summer. I am hoping to be able to help with that this summer because I think we do need to look at maybe a separate high-risk pool, and make that happen. I think we can look at a future in which we are able to cover all the people who need to have their coverage who aren't getting coverage from the private sector right now, and the small business sector but it needs to make sure we are getting rid of these obstacles and coming up with a cooperative plan. I would love to this come into this session and have a bipartisan plan to make sure all the people who desperately depend on Healthcare Group can feel rest assured they will have that coverage into the future.

>>Matthew Whitaker:
Final question, where do we go? Where do we move now?

>>Representative Kirk Adams:
Well, number one we don't do is we don't stick with the status quo. That's clearly not working, and it puts all 26,000 current subscribers of Healthcare Group at risk. Every single one of them is at risk under this current plan. So we do have to cap enrollment. We have to establish a high-risk pool. We have to make sure that access follows through on increasing rates and deductibles and premiums. All those things that are economically necessary so that those 26,000 people can be assured that the policy that the state of Arizona sold them will be there in the future to cover their claims costs.

>>Matthew Whitaker:
OK. Representative Adams, Representative Farley, thank you for joining us on “Horizon” . Thank you.

>>Representative Steve Farley:
Thank you, it's been a pleasure.

>>Representative Kirk Adams:
Thank you.

>>Matthew Whitaker:
If you were a kid growing up in the Valley in the 60's and 70's, there was a destination that would create unbridled excitement and anticipation. It was a place where the Old West came alive and Papago Park. That place no longer exists, but the legend remains. And tonight's "Arizona story" producer Larry Lemmons and videographer Richard Torruellas take us to the past and beyond in search of a Legend City.

>>Larry Lemmons:
A legend is told of a place where children could go. Where the Old West lived within the gates of the city. Today in that place a building now stands on the land they once called Legend City.

>>John Baker:
I got to go to Legend City for the very first time that summer of '63. Sadly, I have no recollection of that visit because I was only five years old. But I'm told we saw Wallace & Ladmo, and Vonda Kay Van Dyke, and we had a great time.

>> Legend City was the valley's first amusement park. It sat on 30 acres in Papago Park. From the moment it opened its gates in 1963, children and their parents adored the park's Old West theme. It survived 20 years before it ended its run in 1983. All that remains of that time are artifacts, some of which were collected by Glendale resident John Baker.

>>John Baker:
This is a Legend City pennant from the early days of the park, circa 1963. It features the original Legend City logo. This was worn by the young ladies who would sell Ice Cream at the Shamrock Ice Cream Parlor at Legend City. This sign adorned the Antique Car ride at Legend City for many years.

[Ghosts of Legend City by Dolan Ellis plays]

>>Larry Lemmons:
Baker created the Legend City website.

>>John Baker:
Through the magic of the Internet, we are able to visit these places that no longer exist in reality.

>>Larry Lemmons:
The journey to the Virtual Legend City can be made quickly and easily. To discover the source of the real Legend City requires a journey of greater distance. Time might very well run constantly, like the waters of a river. There is a timelessness about the beauty of Provo, Utah. Nestled between snow capped peaks and Lake Utah. It's the home of Brigham Young University and the Crandall Historical Printing Museum.

>>Lewis Crandall:
this is a replica of the first printing press. It's a replica. But it's a real printing press. This prints just like Gutenberg would have printed 600 years ago.

>>Larry Lemmons:
Lewis Crandall created this homage to the history of printing. But while in his 20's, the young man who owned an advertising agency in Phoenix, made a trip to Disneyland that changed his life.

>>Lewis Crandall:
All the way back, all I could think about: we need a Disneyland for Phoenix. My first idea was we would make something to show the history of Arizona. And that's when we came up with the idea of maybe making a part that would show the legends of Arizona. Someone came up with the idea, and it was me because Lewis Crandall Legend City, I thought that would be kind of a fun tie-in. There's my drawing of Legend City. Now, we did at this time have that piece of property. And so we, it had two gullies, one going on the east side, and one on the west side. So that would be a perfect place to put a lake, and the perfect place to put a ravine there, you see.

>>Larry Lemmons:
Managers of Disneyland and Six Flags over Texas helped the young entrepreneur. Many people in Phoenix also supported Crandall with his ambitious adventure. The Board of Directors was founded and stocks were sold. Anticipation was feverish in the Valley as the park was being built. Headlines heralded the arrival of the train, and hundreds showed up for opening day in the summer of 1963. Even Governor [Paul] Fannin. Nevertheless there was a smaller crowd than expected.

>>Lewis Crandall:
Everybody loved Legend City. But the only problem it was so blinking hot down there.

>>Larry Lemmons:
But the kids let their imaginations run free.

>>John Baker:
It had a very magical atmosphere for a kid. Of course, it was an Old West environment, which was very popular at that time. My strongest memories are of attractions like the Lost Dutchman Mine ride which, for many people, is was the most popular attraction at the park. The river ride was always very popular. Probably second only to the Dutchman Mine.

>>Larry Lemmons:
Despite the quality of the park, the heat and the lack of attendance began to take a toll. Crandall and his Board were running into financial difficulties after only the first year.

>>Lewis Crandall:
We were struggling. That first year was tough. Worried. A fabulous park. I had meetings with the Governor at the time, pleading with him to help us. This park's going to go under if we don't do something about it.

>>Larry Lemmons:
A decision was made to replace Crandall with an experienced manager.

>>Lewis Crandall:
In fact, I was -- I voted for that. I felt with he needed a real park operator.

>>Larry Lemmons:
Crandall would return to Legend City to assist subsequent owners, but the park eventually began a slow decline.

>>Lewis Crandall:
And about that time, I kind of lost track of Legend City. I was proud of the fact that it was still in existence, people loved Legend City.

>>John Baker:
1980 was the last time I was there. By that time I was a young adult. I was 22 years old. And Legend City, of course, was nearing the end. And the thing I remember most about that is was the park was very run down. None of the rides worked properly anymore. They just let it go. And so I remember feeling very sad that Legend City had come to that.

>>Larry Lemmons:
Today, Lewis Crandall is deeply satisfied telling the history of printing from the Gutenberg Bible to the Book of Mormon. But also today, sharing a common nostalgia with many Arizonans. He looks back fondly at that time, when he built a city for the children of Phoenix.

>>Lewis Crandall:
Well, all my whole life was with Legend City. I loved the place. It was a major part of my life. The thrill of my life was able to build a Disneyland. A Disneyland for Arizona. Legend City.

>>Matthew Whitaker:
We will be featuring "Arizona stories" segments each Tuesday night here on “Horizon”. And starting June 12, you can see the new series of the half hour program "Arizona Stories" every Tuesday night at 7:30 PM.

>>David Majure:
How can a school meet, even greatly exceed, State measurements of students achievement, but fail when it comes to the Federal standard for Adequate Yearly Progress? It's not as uncommon as it might sound. Join us as we explore how we grade students and their schools Wednesday at 7:00, on Horizon.

>>Matthew Whitaker:
Before we leave tonight, a reminder. You can call the number on your screen and get free legal advice by phone. Attorneys from the Maricopa County Bar Association are here for “Phone-a-Lawyer” night answering calls in the studio until 9:00. That number is 480-965-1998. Thanks for joining us on this Tuesday evening. I'm Matthew Whitaker. Good night.

>>Announcer:
If you have comments about Horizon, please contact us at the addresses listed on your screen. Your name and comments may be used on a future edition of Horizon.

>>Announcer: Horizon is made possible by contributions from the “Friends of Eight”, members of your Arizona PBS Station. Thank you.

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