Arizona Gov. Signs Bill Authorizing Waiver From Medicaid Provision
Last week, Arizona Gov. Jan Brewer (R) signed legislation that would authorize her to submit a formal request for a waiver from a Medicaid provision in the federal health reform law, the Washington Post reports.
Brewer's action makes Arizona the first state to seek a reprieve from a provision in the overhaul that prohibits states from restricting Medicaid eligibility (Aizenman, Washington Post, 1/23).
Earlier this month, 33 governors and governors-elect, including Brewer, in a letter called on the administration and Congress to eliminate the provision, which stipulates that states that reduce Medicaid enrollment will lose federal matching funds. Federal funds on average account for 57% of states' Medicaid expenses.
Under the health reform law, states cannot change their Medicaid eligibility rules until they have a health insurance exchange in place.
However, states can limit eligibility for higher-income adults who are not pregnant and do not have disabilities. To avoid losing federal matching funds, some states have begun cutting optional Medicaid benefits, such as vision, dental and prescription services. Some states also have considered ending participation in the program altogether (California Healthline, 1/7).
Details of Arizona's Waiver Request
Under Brewer's waiver request, all 250,000 state Medicaid beneficiaries who do not have children would no longer be eligible, while another 30,000 parents whose annual incomes are more than $10,830 also would lose coverage.
Brewer's staff estimated that if the waiver is granted six months into fiscal year 2012, the state would save about $541 million, followed by another $900 million the following fiscal year (Washington Post, 1/23).
The proposed reduction in the program's enrollment would account for about 20% of the state's total Medicaid enrollment, according to Healthcare Finance News. If the waiver is granted, Arizona would forfeit more than $1 billion in federal Medicaid matching funds (Anderson, Healthcare Finance News, 1/21).
Arizona's request "is widely regarded as a long shot" because administration officials have indicated little interest in allowing states to tighten eligibility standards, the Post reports.
Request Receives Criticism; State Officials Defend Actions
Medicaid advocates and some Arizona lawmakers have described Republicans' arguments for the waiver as "political posturing at best and heartless shortsighted policy at worst," according to the Post.
Beth Lazare, Brewer's deputy policy director, rejected the criticism and called the waiver request a genuine effort to address the state's projected budget deficit of nearly $2 billion over the next two fiscal years.
Lazare said Brewer has no alternative plan to resolve the issue, adding, "This is not a political ploy." Lazare said, "This is our plan. We don't see a whole lot of other options" (Washington Post, 1/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.