Tucson CitizenTucson Citizen

State should sidestep fight with feds over stimulus cash

Citizen Staff Writer
Our Opinion

Some battles are worth fighting. But Gov. Jan Brewer’s dispute with the feds, which could cost the state more than $1 billion in stimulus money, is not such a battle.

Arizona stands to lose $1.6 billion – including $300 million already spent to reduce the deficit in the current state budget – if the disagreement over use of stimulus money is not resolved.

The disagreement is highly technical and involves a change made last year. That change required that some enrollees in the Arizona Health Care Cost Containment System must requalify every six months instead of annually.

The federal government ruled the change tightened eligibility standards, methodologies or procedures for the state’s Medicaid program. And that is prohibited under regulations for use of stimulus funding.

The requirement was imposed so that states with severe financial problems would maintain health care services for those in need, without further restricting the services.

Arizona expects to receive up to $4.2 billion in federal stimulus money. But that $1.6 billion for health care is especially valuable because it allows the state to divert some of the money it had been spending on AHCCCS to other purposes.

Arizona did not pick this fight. The federal government began distributing the Medicaid money from the stimulus package before it issued formal guidelines on requirements imposed on states.

But now that the guidelines have been set, Arizona must find some way to comply or return the money. The latter is a fiscal impossibility as the state struggles to balance this year’s budget, not to mention the gaping multibillion-dollar hole in next year’s.

The federal stimulus dollars are crucial to Arizona’s future.

Brewer has challenged the feds’ position, saying people eligible for AHCCCS benefits still would get them. That position is supported by some in the Legislature.

But there is a far simpler way to resolve this. Brewer should seek a legislative change to the eligibility provision. That’s quicker and surer than hoping for the feds to change their minds.

Arizona may well be right. But the federal government holds all the cards. Fighting the feds over this insignificant technicality is not worth the state taking a billion-dollar gamble.

Gov. Brewer is prepared to challenge the federal finding. But this is not worth

taking a

billion-dollar gamble.

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