PHOENIX (AP) — Arizona Gov. Jan Brewer, R, has built a political career in standing up to the federal government over everything from immigration to health care.
She surprised almost everyone when she announced last week that she plans to push for an expansion of the state’s Medicaid program under the Patient Protection and Affordable Care Act of 2010 (PPACA) — and to fund the expansion by raising taxes.
A conservative Republican, Brewer is believed to be the first governor to publicly come up with a way to fund the controversial Medicaid expansion. Not even California Gov. Jerry Brown, a Democrat in a state that largely supports PPACA, has come out with a plan for paying for Medicaid expansion.
Her proposal to add about 300,000 low-income Arizonans to her state’s Medicaid plan relies on funding from hospitals through a so-called provider tax. The idea is already used to fund some Medicaid plans in 39 states, but none have tapped it to pay for the federal expansion and many have at least some room to expand their hospital taxes.
The Medicaid expansion is intended to cover about half of the 30 million uninsured people expected to eventually gain coverage under PPACA. PPACA expanded Medicaid to cover low-income people making up to 138 percent of the federal poverty level, or about $15,400 a year for a single person. That provision will mainly benefit low-income childless adults, who currently can’t get Medicaid in most states. Separately, the overhaul provides subsidized private insurance for middle-class households.
The District of Columbia and 17 states have opted to expand their Medicaid rolls, but few have been explicit in how they’ll pay for expansion, according to the Kaiser Commission on Medicaid and the Uninsured. Some GOP governors, including Rick Perry in Texas, Bobby Jindal in Louisiana, and Nikki Haley in South Carolina, have opted out, citing philosophical differences as well as worries about costs.
Under PPACA, Washington would pay the entire cost of the Medicaid expansion for the first three years, gradually phasing down to 90 percent of the cost after that. It’s a far more generous matching rate than the federal government provides for other parts of the Medicaid program that’s designed to get states to sign on.
But Arizona appears to be unique in that it will see large costs immediately because of how its existing plan is arranged. So it needs to come up with new funding by January, while other states don’t.
Brewer is bucking party and philosophical lines and blazing a unique path in the health care debate. Time will tell if others follow her lead.
Under PPACA, Washington would pay the entire cost of the Medicaid expansion for the first three years, gradually phasing down to 90 percent of the cost after that. It’s a far more generous matching rate than the federal government provides for other parts of the Medicaid program that’s designed to get states to sign on.
But Arizona appears to be unique in that it will see large costs immediately because of how its existing plan is arranged. So it needs to come up with new funding by January, while other states don’t.
Brewer is already facing opposition from budget hawks in her own party on the issue. Two bills have already been introduced that would essentially block her efforts.
She has found supporters, however, among many Arizona hospital executives and business groups, including the Chamber of Commerce, a leading opponent of raising taxes.
For hospitals stuck with millions of dollars in uncompensated care each year, agreeing to be taxed makes sense. They pay 6 percent of their revenues and get a much larger amount back from Medicaid from the newly insured.