Arizona legislator wants to let uninsured buy Medicaid coverage

Uninsured Arizonans could buy coverage through the public-health program for the poor under a proposal from a Phoenix legislator.

Rep. Kelli Butler, a Phoenix Democrat, said she will introduce a bill this legislative session that would either allow uninsured Arizonans to buy Medicaid coverage or direct state officials to study what it would take to enact such a coverage expansion.

Butler said the Medicaid buy-in option would provide a practical insurance option for residents who don't qualify for subsidized plans through the Affordable Care Act marketplace.

Butler emphasized that her proposal would require consumers to pay the full cost of their insurance coverage.

"We are still working through the details," Butler said. "I intend to introduce the bill so we can begin the conversation and move the ball forward on the idea."

Other states have pursued similar bills, but they have failed to expand insurance coverage. The Nevada Assembly last year passed a Medicaid buy-in bill that was vetoed by Republican Gov. Brian Sandoval. A similar Minnesota bill last year stalled in that state's legislature.

Butler's proposal will face an uphill battle at the Arizona Legislature, too.

Arizona Sen. Nancy Barto, who chairs the Senate's health committee, said such a bill likely would not get a hearing in her committee.

The Phoenix Republican is wary of expanding the government's role in health care and potentially contributing to the national debt, she said. She also worries that allowing more people on public health insurance may hurt the poor and disabled by threatening the stability of the overall program.

"The first order of business when one is in a deep hole is to stop digging," Barto said.

'Solving a problem'

Butler said she wants to give consumers who have been squeezed by the shifting private insurance market another option.

Non-ACA individual insurance options have narrowed as most insurers have dropped out of the market while others remained and significantly hiked rates last year.

Nearly nine out of 10 Arizonans who obtained coverage through the Affordable Care Act marketplace last year received tax-credit subsidies that offset the cost of their monthly insurance premium.

However, individuals who earn four times the federal poverty level — $47,520 for an individual or $97,200 for a family of four — don't qualify for the health law's subsidies. That means they must pay the entire tab for insurance coverage.

Consumers who qualify for subsidized coverage have not experienced the full effect of the marketplace's price increases. But thousands of Arizonans who earn too much to qualify for subsidized coverage have had fewer and much more expensive choices.

"I can’t imagine why everyone wouldn’t support this," Butler said. "It is solving a problem in a real way."

Butler met with a stakeholder group last month to float the proposal.

Her idea is to require AHCCCS to calculate a per-beneficiary cost along with an administrative fee to ensure there is no added cost to the state or federal government.

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She said the proposal also would likely require an individual to be uninsured for a period of time, possibly six months, before they are able to buy coverage. Such a "go-bare" period could discourage individuals from waiting until they are sick to sign up for coverage.

Butler said that a Medicaid buy-in option would appeal to people who are not offered insurance through their employer as well as small businesses and entrepreneurs.

Dr. Daniel Derksen, a University of Arizona professor and director of the Arizona Center for Rural Health, said that the buy-in idea could be an option for current Medicaid recipients should they land a new or better-paying job.

In that sense, Derksen argued it would complement Gov. Doug Ducey's efforts to add a work requirement and five-year eligibility limit for able-bodied adults.

"It's another innovation that would go toward individuals who are able-bodied. It would allow them to pay for their own Medicaid coverage," Derksen said.

Medicaid program faces other issues

Arizona's Medicaid agency, the Arizona Health Care Cost Containment System, also is grappling with two other major eligibility proposals.

AHCCCS submitted a waiver to the federal government that seeks changes such as imposing a five-year lifetime eligibility limit and requiring able-bodied adults to be employed or looking for work in order to maintain coverage.

Furthermore, Arizona is among several states on the verge of running out of money for a program that provides insurance for low-income children due to Congressional inaction. Congress has not reauthorized the federal Children's Health Insurance Program — known as KidsCare in Arizona — since Oct. 1, 2017, the start of the federal fiscal year.

Arizona has paid for its KidsCare program, which covers nearly 25,000 low-income children with other funding sources, but one report from Georgetown University's Center for Children and Families predicts Arizona is one of 11 states that would run out of funds in February should Congress fail to act before the end of January.

Ducey addressed the issue in his State of the State speech on Monday.

"I’ve got a message for Congress: Do your job," Ducey said.

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