As state governors begin to address budget deficits, many may follow the example of Arizona Governor Jan Brewer and consider cutting both Medicaid and children’s health insurance programs (CHIP).
Governor Brewer is faced with a projected $3.2 billion deficit for fiscal year 2011. She has proposed as part of her budget the reduction of Arizona’s Medicaid program by cutting enrollment in the program by over 300,000 people and also reducing certain Medicaid benefits.
Read the Governor’s budget here
Governor is requesting a special election to repeal Proposition 204
Arizona passed Proposition 204 in 2000. The legislation expanded the Arizona Health Care Cost Containment System (AHCCS), the state’s version of Medicaid to include all Arizona residents earning up to 100% of the Federal Poverty Level.
The expansion of the AHCCS was to be funded by using tobacco litigation settlement money. Proposition 204 resulted in the growth of the budgets of Health and Welfare agencies in the state from 20.2% of the state’s operating budget to 26.8%. Repeal of Proposition 204 could result in saving the state over $400 million in fiscal year 2011 and almost $1 billion in fiscal year 2012.
Governor also proposes elimination of Arizona’s CHIP insurance
Governor Brewer’s budget also requests elimination of Arizona’s Children’s Health Insurance Program (CHIP) known as “KidsCare.” The KidsCare program currently covers about 47,000 children in Arizona. Elimination of the KidsCare program is projected ot save the state around $23 million.
Arizona’s hospitals warn of cuts in service
A special session of the Arizona Legislature last month authorized a $7.6 million cut to the AHCCS. The Governor has ordered hospitals to transfer any discretionary funds to cover their mandatory expenditures.
The present and future funding cuts can mean that hospitals will not be paid for services that they have already provided or are required to provide under federal laws. This includes the federal requirement that patients to be treated in emergencies regardless of their ability to pay.
At a public hearing in January, Robert Meyer, president and CEO of Phoenix Children’s Hospital, said it is unfair to change the rules in the middle of the game. He said that Phoenix Children’s has already absorbed $45 million in state cuts over the past three years. Further cuts jeopardize specialized services such as pediatric neurology and rheumatology
Hospitals that treat public or uninsured patients are most at risk.
Some hospitals have already closed certain units, including obstetrics units. The AHCCS cuts could mean that some hospitals will lose 50% of their operating budgets.
AHCCS agree that the prospect is dire but they feel they have no option in the face of a $76 million shortfall in their remaining 2010 fiscal year.
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