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Arizona Legislature should vote for Medicaid expansion (fingers crossed)

There are as many reasons for Arizona’s Republican legislators to vote against expanding Medicaid as there are for voting for it.

But they should hold their noses, cross their fingers and vote yes anyway.

The financial benefits, at least in the short term, outweigh the costs and it’s too soon to tell if the Affordable Care Act, derisively called Obamacare, is the abysmal failure it appears to be heading for.

The goals of the act are to create a system of government and private insurances for the tens of millions of Americans who don’t have or can’t afford health insurance and to reduce the overall cost of healthcare in the country.

But rather than simply expand Medicare to cover everyone, and passing a tax to pay for it, the Congress and President Obama created the most complicated system they could imagine.

Two key parts involved the states, expanding Medicaid – the health insurance for the poor that is run by the states in which both the states and federal government pay for it – and state-run health insurance exchanges.

The Congress gave states the choice of creating exchanges, which are intended to oversee a system of subsidized health insurance plans that are available to anyone to purchase, regardless of pre-existing conditions or other factors that would normally disqualify them. Arizona chose not to participate, so instead the federal government will run Arizona’s exchange.

The states weren’t supposed to have much of a choice in deciding whether to expand their Medicaid rolls to 133 percent of the poverty line (about $15,000 a year for a single person). If a state refused to expand, the federal government under the ACA would have punished the state by stripping all of its federal Medicaid funding.

But the U.S. Supreme Court ruled that provision unconstitutionally coercive on the states, leaving the states free to decide if they wanted to expand their Medicaid rolls.

As a carrot for the states to pass the expansion, the federal government for the first three years mostly covers the cost to the states; about $2 billion a year for Arizona. After that, the feds will only cover about 75-80 percent of the extra cost.

There is a small cost, about $150 million, Arizona must cover for adding back in all the people under 100 percent of the poverty line it kicked out during the Great Recession budget crisis of the past few years.

To pay for that increase, Gov. Jan Brewer, who surprised just about everyone by pushing for the expansion, wants hospitals to pay a “fee.” But the fee looks and acts like a tax, which means under state law at least two-thirds of the Legislature must vote for the expansion for it to pass.

That alone likely dooms the expansion in Arizona. Also, many of the conservative legislators are loathe to vote for a deficit-spending plan they see as destructive to the financial welfare of the country. And many want no part in expanding the roll of government in the health care decisions of Arizonans.

All valid reasons for turning away from the ACA.

But the country’s health care system is fundamentally broken. We don’t know yet if Obama’s complicated system will work to fix it. If all of its pieces are implemented, it might. The idea is to get as many people as possible into the health insurance system and spread the care costs around to as many people as possible, which should help reduce the overall costs of health care, which in turn should benefit the states by reducing the costs of care to government-run health plans.

But if nearly half the states refuse to fully participate in the ACA, as appears likely, than the benefit of those economies of scale are lost. Which puts the success of the ACA in jeopardy.

Which may be a goal for some of the state’s conservative legislators. That, though, is not a valid argument for voting against the expansion.

Trying to screw Obama by screwing over hundreds of thousands of Arizonans caught in the lurch of making too much money to qualify for Medicaid but too little to pay for their own health insurance is not morally defensible.

There is also a separate economic argument for voting for the expansion – the health of the state’s hospitals and ancillary medical providers.

While hundreds of thousands of Arizonans don’t have health insurance, they still get health care, mostly by becoming acutely ill and then going to an emergency room to receive enormously expensive care.

Except they can’t afford that care. The effect is the patient’s already limited financial health is ruined trying to pay the ER bill, and the hospital’s financial health is harmed having to write off most of the patient’s bill.

Which is why nearly all of the state’s hospitals, doctors and other medical providers are lobbying hard for the Legislature to pass the expansion.

The infusion of $2 billion a year into the state’s health care industry will add jobs and have an overall beneficial effect on the state’s economy. Moreover, it will shore up the rural hospitals and urgent care centers that are least able to absorb the uncompensated care caused by the legions of uninsured.

Brewer wants the Legislature to include an opt-out clause in the expansion after three years. She argues that if the ACA isn’t working, if the expansion is to too costly and if the federal government isn’t living up to its promises, or a future Congress repeals the ACA, then the state can revert back to the way things are today – a mess, but a less costly mess.

The best option is to put a three-year sunset clause on the expansion so that if in three years all is going well, the Legislature can vote to continue the expansion for however long it chooses. If all is not well, the Legislature need do nothing and the system reverts back.

Crossing your fingers and hoping for the best is usually a bad way to craft public policy. But in this case, there are no easy solutions. The state might as well try it and see what happens.

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