Obamacare’s Medicaid expansion is not conservative

June 8, 2013 by  

If you’re a registered voter, particularly a Republican, you’ve probably received at least one slick glossy in your mailbox telling you what a “conservative” idea it is for Arizona to accept the Federal Obamacare bribe to expand Arizona’s AHCCCS program.  It’s not…and voters need to know the other side of the story:

  • Increase is dramatic and large – not a ‘slight expansion’. This Obamacare expansion will bring more than 300,000 additional people onto Medicaid in Arizona within 3 years (currently, there are 1.2 million).
  • Voters didn’t approve it.  Arizona voters never agreed to pay for Medicaid to the level called for under Obamacare and they agreed to it only when assured the monies would come from the Tobacco Tax – Not the General Fund.  Now the GF makes up most of the cost as more and more people quit smoking.  In addition, in 2010 voters passed the AZ Health Care Freedom Act – sending a strong message expressing opposition to Obamacare in the state.
  • Denies citizens private insurance opportunity.  If Arizona adds those making between 100-138% of the Federal Poverty Limit to our Medicaid (AHCCCS) program, we would deny these citizens the opportunity to obtain private insurance through the exchanges, which would be much better  for them in the long-term plus a better transition from gov’t health care to private coverage.
  • There is no real “out” – expansion will be permanent… despite the Governor’s suggestion that a circuit breaker will be able to extricate AZ, allowing lawmakers to kick 300,000+ people off of Medicaid if the Feds reneg on their end of the bargain, pullback will not only be politically unfeasible, it may not be possible legally.  And Congressional leaders admit the funding is simply not there for Medicaid expansion in the future so the STATES WILL BE ON THE HOOK.  The expansion is permanent and future generations of taxpayers will pay for it.  Read New Medicaid’s Roach Motel
  • Hospital “assessment” is a tax hike PLUS it generates a $100 Million slush fund for the Legislature. The so-called “assessment” on AZ hospitals raises nearly $100 million more in taxes than needed ANNUALLY  to ‘draw down’ the federal matching funds.   Who knows how future governors & Legislatures will use this extra revenue!  And what’s with ignoring voters’ Constitutional mandate (Prop. 108) that taxes only be raised with a 2/3 vote of the Legislature?  This tax will be imposed with only a simple majority of the Legislature.  Might it be because they wouldn’t be able to GET 2/3 of the Legislature to vote for this taxing scheme?   AFP video on provider tax.
  • Taxpayers can’t afford Obamacare Expansion.   43 cents of every Federal dollar spent is borrowed.  Arizona can hardly save the federal budget alone, but the 18 states that have opted out so far will save $424 billion in federal spending over the next 8 years.  Twelve states are still undecided. Read WSJ source here.
  • The myth of lost monies to neighboring states.  If Arizona doesn’t take Washington’s offer of “free” money, that money will not flow to other states.  No federal program is dependent on funding caused by Arizona’s choice.  Instead, the Feds won’t need to borrow nearly a billion $ a year to fund Arizona’s expansion.
  • Loss of Legislative authority.  The Governor’s plan allows the Director of AHCCCS unchecked authority to set the tax hospitals will pay in order to receive federal matching funds.  In other words – authority that constitutionally is in the hands of elected, accountable legislators will be given to a political appointee who would set the tax rate on hospitals going forward.
  • The REAL “hidden health tax.” Proponents claim the privately insured pay up to $2,000 more in insurance premiums due to a hidden health care tax or cost shift due to hospitals’ uncompensated care costs. If this is true, can Arizonans expect to see their insurance costs plummet by that much if Medicaid comes to the rescue?   On the contrary.  The Medicaid explosion will CONTINUE the hidden health tax, not end it.  To obtain federal matching funds for the expansion, hospitals state that they will tax themselves more than $250 million – but in reality they will bury that increase into their cost of services negotiated w/insurers – thus passing the cost onto insurance companies & private businesses & individuals paying health care premiums.
  • Are hospitals losing or winning?  Hospitals insist that this expansion of Obamacare is necessary because they have incurred losses due to “uncompensated” services provided to the poor – but most big hospital systems are not actually losing money.  Their profits have been reduced due to uncompensated care.  Secondly, if hospitals ARE incurring the loss, then they are not passing the loss onto private insurers (hidden health tax).  If they ARE passing the costs of uncompensated care along, the hospitals are not losing as badly as they claim.  Finally — many hospitals have increased capital spending in the past few years in anticipation of the expansion of Obamacare.  And more hospital projects are planned – for instance, Sierra Vista Regional Health Ctr & RegionalCare Hospital Partners (Brentwood, TN) signed a letter of intent to build a new 100-bed hospital, to be completed in 3 years and Carondelet Health Network announced plans to construct an outpatient health & wellness center in Sahuarita to be completed in 2014.  How can they claim million $ losses and expand at the same time?
  • Where’s the transparency?   In light of the $1.6 billion hospitals would gain from expansion of Obamacare, hospitals do not want transparency nor oversight in how they set costs.  Expanding government-funding for Medicaid only continues health care cost-shifting.  Nothing in the plan addresses this or the rising cost of health care in the first place.

The Arizona Legislature’s first priority is to balance the budget.  The promise of “free” federal monies for a few years only temporarily masks Arizona’s and our nation’s fiscal and health care woes rather than addresses them.   Instead, we should promote ways to lower health care and insurance costs so more Arizonans can afford to purchase the services they want and need.  The Obamacare Medicaid Expansion makes an already unsustainable safety net program less so.

Arizona Arizona can continue to fund Medicaid through 2015 without the Obamacare bribe.  The Supreme Court gave states the option whether to expand.  Arizona should exercise its choice.  Read Rep. Warren Petersen’s Why Conservatives Oppose Expansion of Obamacare.

Read 10 Reasons to Decline Medicaid Expansion in AZ

Read further:  Hinkle: The Myth of Free Medicaid Money; Forbes’ Avik Roy: On, Wisconsin: Scott Walker’s rejection of Medicaid expansion a model for the nation; Medicaid expansion will COST Virginians in many ways; Twelve reasons why VA should NOT expand its Medicaid program



One Response to “Obamacare’s Medicaid expansion is not conservative”
  1. gary barto says:

    Dear Senator
    First of all I don’t know what the Govenor is thinking.
    I wonder if you have any relatives in Michigan.
    Thank you Gary Barto

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