Ted Simons: Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. A letter from the federal government is helping define the state's battle over Medicaid expansion. Here to talk about what the Feds are saying and what options Arizona now faces is Mary K Reinhart, who's been covering the story for "The Arizona Republic." Thanks for joining us.
Mary K. Reinhart: Thank you.
Ted Simons: There's so much going on here. Let's start with what exactly the Feds said to Arizona last week.
Mary K. Reinhart: The Feds issued a nine-page FAQ in response to questions multiple states have been asking. They aren't exactly real quick on the response. Questions have been sort of piling up. This one from Arizona dates back to late last year. What if we wanted to continue to fund these childless adults with this waiver that we have that will expire at the end of the year, but we want the enrollment to be capped. Would you think about maybe funding it the way you normally do, a - federal match. At the end of that list they said to Arizona, not likely.
Ted Simons: Not a no definitely, but no otherwise.
Mary K. Reinhart: Right. We haven't formally asked what's called a waiver. We haven't made that formal ask. But this was for the Governor's purposes enough of a no to send a letter to legislative leaders saying, see, this isn't going happen, you're not going to get any money from the Feds if you continue to freeze on this population.
Ted Simons: So, this is something that we have to decide or should decide by the end of the year, correct? People will be falling off at the end of the year.
Mary K. Reinhart: That this program for childless adults, people who don't have kids who are 0-100 percent of the poverty level, if we expand. The current program we have right now expires December 31st. That means it goes away. The Affordable Care Act, the federal legislation doesn't -- it sort of has a hole in it where these people cannot go on the exchange to get their needs met. They are sort of out there without anything if we don't expand at this point, unless we continue this program somehow on our own.
Ted Simons: The people you talked to, were they surprised the Feds played a little hardball here?
Mary K. Reinhart: I think some of the Republicans who opposed expansion were a bit surprised. In the past couple of months, they said, the Obama administration won't do this. It's the Obama administration saying, no, we're not going to fund these people. You are on your own. Well, it's the same argument the Governor's office and the expansion proponents are using, we can't throw these people out. The legislature, you have a moral obligation to expand Medicaid so these people don't fall off. Without anything happening, if we did nothing, they indeed would fall off the Medicaid rolls and have no insurance.
Ted Simons: Similar argument on either side of the scales.
Ted Simons: The Governor took this letter or memo and told lawmakers, you have four options. There seem to be five options. First of all, you keep the freeze at the level it is now, you don't expand it higher. Cover remaining childless adults. Eight hundred-fifty million dollars cost to the state, something along those lines?
Mary K. Reinhart: These are estimates. The freeze stays on, remember the number of people we cover gradually declines as it has from 220,000 to something like 85,000. We continue to see fewer and fewer people that we'd have to cover if we continue the freeze under that scenario. Yeah, in the 800 million dollar range.
Ted Simons: Anyone pushing for this?
Mary K. Reinhart: The conservative Republicans in the legislature.
Ted Simons: That's their number one goal right there?
Mary K. Reinhart: Yeah, to continue the freeze and fund it with state funds. If the Feds say no, we can do it alone. We have the rainy day fund, it's about 450 million dollars, we have a carry-forward fund somewhere in the 600 million dollar range. It’s doable for at least three years to cover this population.
Ted Simons: We're talking about eliminating coverage for childless adults altogether. It would cost the state zero, as far as the general fund is concerned, but people would be bouncing off this thing in mid treatment, wouldn't they?
Mary K. Reinhart: Yes, Aand having voters approving coverage to this population twice. We did in say we wanted the population to be covered under our Medicaid program.
Ted Simons: Anyone really pushing hard for this?
Ted Simons: I don't think they are talking about throwing people off. Even the most conservative Republican opponents of expansion are saying we're not going throw people off who are -- you know, people in mid treatment for cancer, people on dialysis, people with serious mental illness, I don't think there's any support for doing that. Okay. Third option, you end the freeze which reinstates the two to one federal match, but it costs the state a lot of money over the next three years.
Mary K. Reinhart: And you still have to get a separate approval to cover those people if you're not covering them all the way to the 133, which is what the Obama administration wants us to do.
Ted Simons: Anyone want that aspect?
Mary K. Reinhart: Not too much. That's a lot of money, yeah.
Ted Simons: One point three billion. Let’s talk about the Governor's plan, the fourth option, that’s the one she's pursuing, pay for expansion with the hospital assessment. And that brings in a lot of money.
Mary K. Reinhart: It brings in a lot of federal money and a little more -- right, it does. It actually is a net gain to the state. Because the hospitals, the hospital assessment brings in more than we actually need for our increased share. The -- when you insure more people, it costs more money. The Feds pay for 90 to 100 percent of that for the foreseeable future, that's in the Affordable Care Act, that's in the legislation. The hospital assessment the Governor has put into her proposal is really sort of a way to say, See, we won't have to spend more money because the hospitals, who have been taking care of an increasing number of insured patients, are willing the tax themselves drawing down even more federal money netting about 100 million dollars for the general fund.
Ted Simons: Indeed not only netting a hundred million dollars for the General Fund, but eight billion dollars in federal funds over the next three years. That's why the Governor and those who support this says there really is no choice.
Mary K. Reinhart: That's what they say.
Ted Simons: Yes, is that getting traction?
Mary K. Reinhart: Well, it's the 64,000 dollar question. It has traction among Democrats who have been supportive of the Governor's plan, and a handful of Republicans in both chambers. There have been pretty consistently enough votes in the Senate for a simple majority. And in the House, close, probably also a simple majority. There are very, you know, strong groups of vocal conservative Republicans in the legislature, the President of the Senate and the House Speaker who decide what bills get heard, and many others frankly who don't believe, A, the federal money will last, that this is a sustainable property tax. They don't think this money is going to be there. They think we'll end up insuring all of these people and get stuck with the bill. They don't think it's the right thing to do in the midst of a significant federal deficit. That that eight billion dollars It's not free money, it's our money. We don't want to make the deficit any worse than it already is, and so we're going do our part to not make it worse than it already is.
Ted Simons: Let’s go on to the fifth option. Thegovernor did not mention this. And that is to go straight to the ballot. How much traction is that getting?
Mary K. Reinhart: It’s getting a little more, the later we get into the session. More and more people are talking about it. It is an option, some of us around for a few years remember from 2009, that's how we got out of the one-cent sales tax debacle, 17 special sessions in a row or whatever you want to call it. It is a way out. Senate President Andy Biggs said, I don't do it, it'll be a dictating of our job that we were sent here to do. So a lot things can happen and probably will in the next couple of months. That is an option more people are talking about.
Ted Simons: Will that get to a ballot? Could there be a special election in time to save those folks who would drop off at the end of the year?
Mary K. Reinhart: More research is needed on that issue.
Ted Simons: Yes, yes.
Mary K. Reinhart: If you recall in early 2010, it took until early to get that on the ballot, and we voted on it in May. The secretary of state needs lead time to make it happen. A statewide election isn't just a drop of a hat. But there could be sort of a bridge put in place, if they wanted to put it on the ballot, maybe you pay for those folks and keep them on insurance until the election is held.
Ted Simons: All right. Wow, good stuff, good to have you here. Thanks for joining us.
Mary K. Reinhart: Thank you.