Ariz. Legislature to consider bid for Medicaid cut

PHOENIX — Arizona legislators were poised Thursday to consider Gov. Jan Brewer's request for authorization to request a federal waiver allowing the cash-short state to temporarily slash its Medicaid enrollment under what officials said would be the first such request by a state.

The House and Senate scheduled action on the bill amid questions about whether the waiver request would be approved by President Barack Obama's administration and whether the legislation would survive an anticipated state constitutional challenge.

Brewer, with backing from fellow Republicans in the Legislature, wants to suspend eligibility of coverage for 280,000 low-income adults, which would save $541.5 million. It's the single biggest element in Brewer's plan to eliminate a projected $1.1 billion shortfall in the next state budget.

The state cannot afford its current Medicaid program and the eligibility reduction is necessary to avert deeper state budget cuts for education and other services than have already been implemented or are included in the proposed budget, Brewer and Republican legislators said.

"There is no funding available," said Senate President Russell Pearce, R-Mesa.

Democratic legislators said the eligibility cutback would hurt both those who lose coverage and the state's health care industry as well as the overall economy.

The Legislature is considering the issue during a special session running concurrently with the 2011 regular session. Brewer's office has said considering it during a special session accelerates when the waiver request will be submitted to the U.S. Department of Health and Human Services.

The eligibility change would reduce enrollment in the state's Medicaid program, formally known as the Arizona Health Care Cost Containment System, by about a fifth. The bulk of those who would lose coverage are all non-pregnant, non-disabled, childless adults and also parents with incomes up to 50 percent of the federal poverty level.

Monica Curry, an AHCCCS assistant director, said the state would file the request as soon as Friday under a Social Security law that gives the Department of Health and Human Services secretary broad discretion to grant waivers on Medicaid.

"We believe this waiver request will be taken seriously by the administration and at the very least will open the door to further dialogue to possible solutions to address Arizona's crisis," Curry said.