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Republican Governor of Arizona Says She'll Back Medicaid Expansion

By Jane Norman, CQ HealthBeat Associate Editor

January 15, 2013 -- Word that Arizona will participate in the health law expansion of Medicaid represents a change of heart for a Republican-led state that was one of the plaintiffs in the lawsuit that challenged the health care law all the way to the Supreme Court.

Arizona Gov. Jan Brewer announced in her State of the State address last week that in 2014, Arizona would extend Medicaid coverage to adults earning up to 138 percent of the federal poverty level, as is called for in the health care law (PL 111-148, PL 111-152). Under the Supreme Court's 2012 ruling, states are allowed to opt out of the expansion without losing all their Medicaid funding.

"Try as we might, the law was upheld by the U.S. Supreme Court," Brewer said in her address. "The president was re-elected, and his party controls the U.S. Senate.

In short, the Affordable Care Act isn't going anywhere—at least not for the time being."

Arizona joins two other nearby Republican governors, Brian Sandoval of Nevada and Susana Martinez of New Mexico, in deciding to expand Medicaid.

A statement on the governor's office web site said that expansion would cost Arizona $154 million in state funds in its first year of implementation but that over time, Arizona will also receive about $1.6 billion in new federal funding for Medicaid. The expansion will add 240,000 adults to the rolls in Arizona and continue covering 50,000 childless adults already enrolled, said Brewer's statement.

She said in her remarks that the expansion will protect rural and safety net hospitals from being pushed to the brink by their growing costs in caring for the uninsured; take advantage of the "enormous" economic benefits brought by the federal funds; and provide health care to thousands of low-income people.

"Saying 'no' to this plan would not save these federal dollars from being spent or direct them to deficit reduction," she said.

"No, Arizona's tax dollars would simply be passed to another state—generating jobs and providing health care for citizens in California, Colorado, Nevada, New Mexico or any other expansion state."

Brewer said that under a plan she devised, the Arizona expansion would automatically roll back its enrollment if the federal reimbursement rates decrease. "I won't allow ObamaCare to become a bait-and-switch," she said.

She also said she would also allow hospitals and health providers to assess a fee upon themselves and use the revenue to gain additional federal Medicaid reimbursements, a tactic already used in other states and one that's been eyed by congressional lawmakers as they seek to rein in the deficit.

The system essentially allows states to ramp up their federal funds to pay for nursing home care. States charge the assessments against providers, and as the assessments increase, so does matching money from the federal government.

Brewer said she is a "deficit hawk" but the federal money is needed. "With the realities facing us, taking advantage of this federal assistance is the strategic way to reduce Medicaid pressure on the State budget," she said.

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