Cutting Medicaid is on the short list of serious options as states face monumental budget deficits. In Arizona, legislative leaders have suggested axing AHCCCS entirely, cutting it back to 33 percent of the federal poverty level (from 100 percent now), giving it back to the counties or performing major surgery on benefits and qualifications.
By way of context, SLHI funded a 2006 study by the ASU Center for Health Information and Research on the impact of Medicaid disenrollment of children on community healthcare use and cost. The study found that a 10 percent disenrollment would increase the cost of care in the community by $3.46 million annually, or $2,121 for every child disenrolled. This is attributed to direct changes in insurance status that result in a shift from less expensive ambulatory settings to emergency departments and increases in hospital days – all at rates, by the way, that are below what it costs hospitals to provide that care.
Instead of a 10 percent Medicaid disenrollment for children, imagine cutting off hundreds of thousands of adults and children. Factor in a loss of $7 billion in federal funding, a critical shortage of providers like primary care physicians, already overcrowded EDs and the loss of even more jobs in a stagnant economy, and you have a recipe for disaster.
Legislative leaders contend that we’re already following a recipe for disaster by propping up a healthcare safety net system we simply cannot afford. Many see no alternative other than kicking the can down the road to counties, cities and towns, individuals, businesses, the nonprofit sector and a healthcare provider industry with already strained operating margins.
Kick the Can may be a short-term, politically expedient game, but it is no substitute for imaginative leadership focused on attracting people and companies to invest in Arizona’s future. What we truly cannot afford is not to make this investment.