Arizona on Tuesday became the first state to officially ask the federal government's permission to eliminate Medicaid coverage for hundreds of thousands of low-income residents in an effort to close a massive budget gap.

In a four-page letter to Health and Human Services Secretary Kathleen Sebelius, and an accompanying 19-page proposal to the Centers for Medicare & Medicaid Services, Gov. Jan Brewer says she needs relief from a federal mandate requiring states to maintain current eligibility levels.



Brewer's letter | FAQ

Arizona wants to drop 280,000 recipients from the Arizona Health Care Cost Containment System by Oct. 1. Brewer's office has said the move is necessary because Arizona is facing a $763.6 million deficit in the current fiscal year and a $1.15 million deficit in fiscal 2012.

The governor said her office had not yet begun work on a contingency budget should the waiver request be denied. But she said she is hopeful that federal government will give Arizona "the flexibility" it needs. She is trying to schedule an in-person meeting with Sebelius within the next month.

"I am optimistic. . . . I am very optimistic that the federal government will step up," Brewer said, adding that she "can't imagine" that the Obama administration will "completely shut the door on us."

Though the cuts have been billed as affecting only childless adults, about 30,000 of those who would lose coverage are parents and about 11,000 are children. Brewer's budget director said they expect to re-qualify the kids under another Medicaid category.

The governor, who initially called Tuesday a "red-letter day" - a reference to Arizona being the first state to push back against the federal health-care reform eligibility mandate - later clarified those remarks. She said she was making the request with a "heavy heart."

"It's difficult because we know people are depending, and have been dependent, on the AHCCCS program," Brewer said.