The Coming ObamaCare Damage

By Tom Jenney, Americans for Prosperity, Arizona Chapter

When it comes to the fiscal costs and human damage of expanding  Medicaid/AHCCCS under ObamaCare, we know that things will turn out  badly.  How do we know?  Because we’ve been there, and we’ve done  that.  Here is what past experience, here in Arizona and elsewhere, tells  us about the ObamaCare Medicaid expansion:

1)   The Medicaid expansion will cost much  more than projected.

2)  The expansion may do nothing to help low-income Arizonans — and could hurt them.

3)  The so-called “hidden health tax” won’t get  fixed.

4)  Arizona must bargain hard to get a better deal.

5)  The disgusting ploy to gut Prop 108 taxpayer protections  will lead to more tax hikes.

You can read more about each of those items below, and take  action at

1)  The Medicaid expansion will cost much more than  projected.

None of the promised fiscal results of Arizona’s last Medicaid/AHCCCS  expansion (enacted by voters through Prop 204 in 2000) actually  materialized.  Prop 204 backers promised that the AHCCCS expansion  would save money in the state budget.  The Joint Legislative  Budget Committee was somewhat wiser, knowing that the expansion would cost the  state money.  The committee projected that covering the Prop 204  population would cost $389 million in 2008.  But the actual cost was $1.623  billion — four times as expensive as projected!

And of course, the projected $2 billion in federal matching funds is  not “free.” Certainly not for federal taxpayers — including millions of  Arizonans.  According to the Goldwater Institute’s Christina  Corieri, if Arizona and 11 other fence-sitter States join the 18  States that have already said No to the ObamaCare Medicaid expansion, the  country could save $609 billion by 2022.  That’s  real money — even in Washington!

2)  The expansion may do nothing to help low-income Arizonans — and could hurt them.

Several studies  suggest that Medicaid may actually hurt its supposed beneficiaries, but there  has been only one randomized study (the Oregon Health Insurance Experiment)  comparing persons on Medicaid to persons having no insurance at all.   According to results  released recently, the study has so far failed to find  any evidence that putting people on Medicaid saved any lives or made any  improvements in several objective health markers (blood pressure,  cholesterol levels, and diabetes).

Things will get worse in AHCCCS the longer ObamaCare goes without  being repealed.  In Arizona, according to the Kaiser Family  Foundation, 23 percent of doctors say they will not accept AHCCCS  patients.  Combine large increases in the Medicaid population with a  declining number of doctors, and the result will be longer waiting times for  patients.  In medicine, longer waiting times often mean discomfort,  disability and death.  Read more about the human cost of the  Medicaid expansion HERE.

3)  The so-called “hidden health tax” won’t get  fixed.

The proponents of the current Medicaid expansion estimate that there is a “hidden health tax” of $2,000 per family per year in higher insurance premiums  caused by uncompensated  care (uninsured or underinsured people using the emergency  room).  13 years ago, backers of the Prop 204 Medicaid expansion  made the same argument, claiming that the expansion was going to  relieve the state’s uncompensated care problem.  But according to a Lewin  Group study, uncompensated care in Arizona increased by an average of  nine percent per year during the first seven years of the Prop 204 Medicaid  expansion, and the average family’s health insurance premium increased  from $8,972 in 2003 to $14,854 in 2011 – a 66 percent increase.

Before you believe the hospital lobby’s arguments about uncompensated care,  be sure to read Christina Corieri’s latest post: Medicaid  expansion will line hospitals’ pockets.

4)  Arizona must bargain hard to get a better deal.

The main reason Arizona’s Medicaid system (AHCCCS) is not as bad as that in  most other States is that Arizona waited two decades to join the  Medicaid programBecause we held out, we were able to  bargain for a better deal — a Medicaid program that has been better at  controlling costs and has provided better options for patients than in many  other States.

But Governor Brewer’s team has failed to even try negotiating with  Obama’s department of Health and Human Services (HHS).  In its  most recent message about the Section 1115 waiver, HHS said “we  do not anticipate that we would authorize enrollment caps or  similar policies” while still letting States get 2-to-1 matching dollars.   But of course, “we do not anticipate” is not the same thing as saying “No.”  Right now, HHS is in the position of having to negotiate with  States, because 18 States have already said No to the Medicaid expansion, and 12  States are still on the fence.  At this point, we don’t know if HHS  really means “No,” because the Governor’s team simply threw up the white  flag and capitulated to the demands of the Obama  Administration.

Further, the Governor’s cost projections are based on AHCCCS coverage  under cookie cutter Medicaid rules — in other words, how much things  will cost if we capitulate and run AHCCCS according to federal diktat, without  negotiating for better ways to run the program.

5)  The disgusting ploy to gut Prop 108 taxpayer protections  will lead to more tax hikes.

Proponents of the ObamaCare Medicaid expansion are trying to do an end-run  around Prop 108, the most important taxpayer protection in the Arizona  Constitution.  Under Prop 108, it is supposed to take a two-thirds majority  of the Legislature to raise taxes.  But Medicaid expansion  proponents want to allow an unelected bureaucrat at AHCCCS to raise  state taxes (mainly hospital bed  taxes) by hundreds of millions of dollars per year — without a two-thirds  vote of the Legislature!

In their efforts to squeeze a giant hospital bed tax (“provider tax”) through  a tiny loophole in Prop 108, Governor Brewer and others are trying to  pretend that the provider tax is not a tax — even though the  provider tax is a TAX under the Social Security Act.  They are  also trying to pretend that: the provider tax is not allocated according to  formula, although it plainly is; the provider tax does not have a limit,  although it is limited by federal law to six percent; and, we don’t know how  much money will be raised by the tax, even though the Governor and some  Legislators are building budgets around the expected revenue.

History shows that removing taxpayer protections inevitably leads to  higher taxes.  If Arizona’s Legislators delegate to an AHCCCS  bureaucrat the authority to impose gigantic taxes on hospital patients, they  will kill Prop 108, clearing the way for other departments and agencies to raise  taxes without getting approval by legislative supermajorities.

To block the ObamaCare Medicaid expansion and to stop the end-run around  Arizona’s constitutional taxpayer protections, go to

For Liberty, Tom

Tom Jenney Arizona Director Americans for Prosperity

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