Brewer one step closer to Arizona Medicaid cuts

PHOENIX - In a 9-4 vote, an Arizona Senate appropriations committee has approved Arizona Gov. Jan Brewer's request to seek federal clearance to suspend Medicaid health care coverage for 280,000 low-income people to help balance the state budget.

The House and Senate held committee hearings on the issue after the special session started Wednesday afternoon. The special session, which Brewer called Tuesday evening, would end Thursday after planned action by the full Legislature.

The Legislature's regular session is already under way, but Brewer spokesman Paul Senseman said authorizing the waiver request during a concurrent special session would allow the request to be submitted sooner to the U.S. Department of Health and Human Services.

The waiver would be to the federal health care overhaul's "maintenance of effort" requirement. That requirement prohibits states from reducing Medicaid eligibility below early 2010 levels and applies until the overhaul expands Medicaid coverage in 2014.

Brewer's proposed suspension of eligibility for about a fifth of the enrollment of the state's Medicaid program is a key element of her budget-balancing plan. It would save the state an estimated $541.5 million, or half of the $1.1 billion shortfall that Brewer has projected for the fiscal year that begins July 1.

If approved, the suspension would begin Oct. 1 and run through Jan. 1, 2014, when the federal care overhaul expands Medicaid nationwide.

Those affected are adults provided coverage under an expansion of eligibility approved by voters in 2000 for the state's Medicaid program, the Arizona Health Care Cost Containment System.

Brewer and Republican legislators contend the state cannot afford to continue providing coverage for the so-called Proposition 204 population because two designated sources of funding -- tobacco tax revenue and money from a settlement with tobacco companies -- have proven inadequate.

Arizona's Medicaid program is more generous than most other states, providing coverage for people with household incomes up to 100 percent of the federal poverty level.

The program's cost has gradually become an increasing burden for the state, particularly during the current budget crisis that began in late 2008.

Democrats legislators oppose the cutback, saying the state should not reduce health care. They also say the state should not thwart voters' decision in 2000 to expand eligibility.

Republicans argue that the 2000 law gives lawmakers leeway to reduce the program to fit available funding.