Friday, January 28, 2011

Arizona's Brewer has thrown down the gauntlet - will Sebelius pick it up?

There’s apparently at least one way to circumvent some provisions of the healthcare reform act while, at the same time, making the new law seem detrimental to those seeking Medicaid coverage and putting the current administration on the spot - simply ask the government’s permission to cut Medicaid spending in your state. Instructions for doing so are built right into the ACA. Arizona is now trying to do just that, and other states may follow.

To qualify for federal reimbursement for their Medicaid programs, state Medicaid plans may not have any eligibility standards or restrictive determinations of eligibility that were not in effect on the date of enactment of the ACA. There is an exception until January 1, 2014, however, for this “maintenance of effort” standard for states with budget deficits that certify to HHS that they have a deficit for the current fiscal year or are projected to have one for the following year. For those states, the maintenance of effort requirement will not apply to determinations of eligibility for non-pregnant and/or non-disabled adults with incomes above 133% of the federal poverty level.

Now, Arizona governor Jan Brewer wants to be the first to obtain the exception.
 On January 21, 2011, she signed state legislation authorizing her to make a two-year waiver request from the ACA’s maintenance of effort eligibility requirements. Subsequently, on January 25th, she sent a letter to HHS Secretary Kathleen Sebelius requesting the waiver. It’s hard to believe that this doesn’t put Sebelius in a difficult position, since she will probably be criticized regardless of her decision. In her letter, Brewer painted a dire picture of her state’s finances, claiming that Arizona’s Medicaid program represents approximately 30% of the state’s General Fund spending. On the other hand, by granting the waiver, Sebelius will make it possible for Brewer to eliminate or drastically reduce coverage to approximately 280,000 people.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.


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