Sebelius Clears
the Way for Arizona to Shed Adults From Medicaid
Published: February 16, 2011 - New York Times
The Obama administration gave a green light on Tuesday to Arizona’s plan to
remove about 250,000 adults from its Medicaid
rolls, instructing the state that it could circumvent a requirement in the new
health care law that prohibits reductions in eligibility.
In a letter to Gov. Jan
Brewer, the secretary of health and human services, Kathleen
Sebelius, wrote that Arizona’s expansion of Medicaid to cover low-income
childless adults had been enacted a decade ago with special permission from the
federal government, known as a waiver. That waiver, Ms. Sebelius wrote, is
time-limited and expires Sept. 30.
“Neither the Affordable Care Act nor Medicaid law or regulation prior to its
enactment require a state to renew a demonstration beyond its expiration,” Ms.
Sebelius wrote. “Arizona may choose to terminate its current demonstration on
September 30, 2011, and either not pursue a new demonstration or pursue a
different demonstration.”
The secretary said explicitly that the removal of childless adults from the
rolls would not constitute a violation of the health care law’s eligibility
requirements. The law calls for a major expansion of Medicaid eligibility in
2014, when all states must begin covering low-income adults.
A handful of states, including Arizona, have already been doing that, with
the federal government agreeing to pay its usual matching share of the cost.
Five other states currently cover childless adults on waivers that expire on a
rolling basis over the next three years.
Arizona’s expansion, which was approved in a referendum in 2000, initially
was financed with proceeds from cigarette taxes and a tobacco lawsuit, but that
money became insufficient in 2004. The state’s general fund has been making up
the difference ever since. Eliminating the coverage would save $541 million,
closing nearly half of Arizona’s budget gap for the coming year.
Ms. Brewer proposed the cut, and the Legislature met in special session last
month to approve the state’s request for a federal waiver of the health care
act’s eligibility requirements. Other Republican governors have requested relief
from the requirement.
Ms. Sebelius’s letter essentially said that Arizona would not need a waiver,
at least not to remove childless adults from the rolls.
Last year, Arizona made other significant cuts to its Medicaid program by
eliminating coverage of a number of services not mandated by federal law, including some
organ transplants.