Senate health bill will 'blow a hole' in Arizona budget, business leaders say

Ken Alltucker | The Republic | azcentral.com

Show Caption Hide Caption CBO: 22 million people could lose health care coverage The Congressional Budget Office estimates twenty-two million fewer people would be insured by 2026 under the GOP's proposed health care plan.

Arizona health-care and business leaders warn that Senate Republicans' bill to replace the Affordable Care Act would trigger deep cuts to the health-care system that could ripple through the state's budget and economy.

Hospital leaders said the Senate bill, called the Better Care Reconciliation Act, would eliminate coverage for low-income families on Medicaid and would significantly increase uncompensated care at hospitals.

On Monday, the top executive of the Arizona Chamber of Commerce predicted in a letter to U.S. Sens. John McCain and Jeff Flake that the Senate bill would harm the state's economy and "blow a hole" in the state budget.

The letter from the Arizona Chamber was delivered the same day the nonpartisan Congressional Budget Office estimated the Senate Republicans' bill would increase the number of uninsured Americans by 22 million. That is one million fewer uninsured people than the version that House Republicans approved in May.

Senate leaders are hopeful for a vote before the end of this week on the legislation to replace "Obamacare," the sweeping 2010 health law that expanded Medicaid coverage for low-income families and remade the private health-insurance market for individuals who directly purchased coverage.

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While Republican leaders have been critical of President Barack Obama's signature health bill, the heated chatter over the GOP's health-reform bills in the House and now Senate show how difficult and divisive health-care reform can be.

The largest reduction would cut $772 billion from Medicaid, the federal-state program that provides coverage to low-income families and the disabled. The CBO forecast that the Senate bill would result in a net reduction in federal spending of $321 billion through 2026.

How Medicaid cuts could affect Arizona

Analysis: CBO report predicts more uninsured The non-partisan Congressional Budget Office released a report saying that the Senate health care bill would result in 22 million more uninsured Americans over the next decade. AP reporter Ricardo Alonso-Zaldivar breaks down the findings. (June 26)

In Arizona, hospital and health leaders are particularly worried about the proposed reductions to the Medicaid program, which provides coverage for about one in five people in this state.

"One of our tenets has been, if you are going to replace the ACA, you cannot increase the number of uninsured," said Steve Purves, CEO of Maricopa Integrated Health System.

Purves said Maricopa, which serves as the region's main safety-net hospital system, would see a direct increase of $55 million to $75 million in uncompensated care should the Senate bill pass Congress.

Purves said Obamacare's Medicaid expansion has allowed his health system and other hospitals to emphasize preventive care, in which insured patients get regular care to better manage chronic health conditions. If the Medicaid expansion is rolled back, Purves predicts more patients will lose their health insurance, delay preventive health care and seek emergency care when their health worsens.

The state's Medicaid program, called the Arizona Health Care Cost Containment System, estimated that the rollback of the Medicaid expansion could jeopardize coverage to nearly 400,000 adults who gained coverage under the expansion.

That includes 28,900 adults with cancer, 80,800 with a mental-health diagnosis and 47,100 with a substance-abuse disorder.

Shifting costs to the state

AHCCCS estimated the Senate bill would cost the state $7.1 billion through 2026 due to a loss of federal match funding, the elimination of a local hospital assessment and inflationary factors.

The direct impact to the state's budget would be $2.9 billion under the Senate bill — slightly less than House bill's $3.3 billion tab for Arizona.

Either way, business leaders are worried about the prospects of such a large cost shift from the federal to state government.

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Glenn Hamer, president and CEO of the Arizona Chamber of Commerce, applauded the Senate bill's efforts to reduce taxes and replace parts of the Affordable Care Act.

But he said the Senate bill would place a large burden on state government.

"The proposed cuts to (Medicaid) would negatively impact Arizona's economy and blow a hole in the state budget that would result in the state's inability to meet core government responsibilities," Hamer wrote in a letter to McCain and Flake, citing a possible ripple effect to education and transportation.

Gov. Doug Ducey, a longtime critic of the Affordable Care Act, expressed similar concerns in a letter last week to McCain.

Among other items, Ducey highlighted an "early expander penalty" that punished Arizona and other states that expanded Medicaid eligibility before the Affordable Care Act. Arizona's expansion came in 2000 with the voter-approved Proposition 204, which extended coverage to adults earning up to 100 percent of the federal poverty level.

Ducey wrote his critique last Wednesday, a day before the Senate released details of its bill. A spokesman said his staff is assessing the Senate bill.

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McCain and Flake have both signaled that they will take a cautious approach to the bill. Neither has publicly disclosed a position.

Hospital leaders also expressed concerns about the fast pace of the Senate bill, with Senate Majority Leader Mitch McConnell, R-Ky, pushing for a vote before the end of the week.

"We are so much further down the road and now there is a possibility this will be American health policy," said Greg Vigdor, president and CEO of the Arizona Hospital and Healthcare Association.

Concern over pre-existing conditions

Arizonans protest at U.S. Sen. Jeff Flake's office A group of Arizonans marched into U.S. Sen. Jeff Flake's office at 10:40 a.m. and told staff working there to call Flake right away and have him give his position on the American Health Care Act. Sean Na/azcentral.com

Meanwhile, other health-care groups have held meetings, rallies and other events to highlight their concerns about the bill.

On Monday, Phoenix Mayor Greg Stanton joined a coalition of organizations representing seniors, children and low-income families at a conference in Phoenix explaining how an Affordable Care Act replacement could affect different groups.

One of the speakers, Sergio Rodriguez, 34, said he worries that the GOP Senate bill could make it more difficult for people with existing medical conditions.

Under the Affordable Care Act, insurers can’t deny coverage to someone based on an existing medical condition. The Senate bill would keep guaranteed coverage in place, but insurers could shut out coverage for six months if a person does not maintain continuous coverage.

Rodriguez was diagnosed with multiple sclerosis nearly a decade ago.

“I was perfectly healthy,” Rodriguez said. “Then one day I couldn’t walk or talk. Facial paralysis. ... Life can change in the blink of an eye.”

Before the Gilbert man spent 45 days in the hospital and was diagnosed with multiple sclerosis, he had not given much thought to the importance of health insurance.

Rodriguez now takes prescription drugs that manage his disease. He's able to work and maintain a productive life, but the medication costs $7,200 each month.

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He has health insurance through his employer, a non-profit, but he knows that the existing health law, the Affordable Care Act, forbids insurers from denying coverage based on his health condition.

"Insurance is always at the forefront of my thoughts," Rodriguez said. "Even before I decide what my next move is going to be, I have to think, 'Will I be insured? Will it be good insurance? Will it cover my neurologist and all my other specialty care that I need to be able to sustain my life?' "

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