Killer Cuts

Exactly how many Arizonans will prematurely perish if suggested cuts are made to the state’s health-insurance program for the poor?

That’s an impossible question to answer—but it’s undeniable that some will die if they lose their medical coverage. As a 2009 report from Harvard Medical School and the Cambridge (Mass.) Health Alliance concluded: “Uninsured, working-age Americans have a 40 percent higher risk of death than their privately insured counterparts.”

But to save an estimated $541.5 million in next fiscal year’s state budget, Gov. Jan Brewer has recommended eliminating insurance for approximately 280,000 people, or about one-fifth of the total number enrolled in the Arizona Health Care Cost Containment System (AHCCCS). In Pima County alone, the reduction could impact almost 45,000 people.

While the federal government picks up most of the tab for the insurance, the state this year will spend almost $1.4 billion in general funds on AHCCCS. That figure is expected to skyrocket next year unless cuts are made.

“Amazingly,” Brewer noted in a recent letter, “over 20 percent of Arizona’s population is now covered by (AHCCCS).”

Referring to last November’s election results, Brewer added that voters in these difficult economic times “expect government to get back to fundamentals, make difficult decisions and start living within its means.”

A higher death rate among the poor is just one projected result of the proposed change in AHCCCS eligibility. Another is a decline in the general health of the uninsured.

The Institute of Medicine of the National Academy of Sciences put the issue into clear perspective in a 2009 report. “Being uninsured,” the report’s authors concluded, “was hazardous to people’s health.”

“Those without health insurance have lower health status than the insured,” comments Lynn Blewett, director of the State Health Access Data Assistance Center at the University of Minnesota. “They delay getting care until they absolutely need it. There’s no preventative care.”

The impacts of those delays, Blewett emphasizes, have ramifications beyond poorer health. Since most uninsured people are from working families, declines in job productivity and increases in workdays lost to illness occur because of delays in seeking medical care.

Blewett also believes that people covered by programs like AHCCCS have little likelihood of getting other medical insurance.

“At their level of income,” she says, “it’s unaffordable. That’s why public programs exist.”

Another difference between the insured and uninsured involves where they go for primary health care. While those who have insurance typically visit a physician’s office, the uninsured flock to already overloaded hospital emergency rooms.

The U.S. Centers for Disease Control and Prevention reports that those without health insurance visit an ER about twice as often as those who are insured.

“If you cut public health-insurance programs,” Blewett states, “you’re shifting the cost of care onto the providers at hospitals.”

That’s one reason why the Arizona Hospital and Healthcare Association opposes Brewer’s proposed AHCCCS cuts. The administration at Tucson Medical Center is also against the idea.

“If you eliminate the coverage, it won’t stop people from being ill,” says hospital spokeswoman Julia Strange. “But it will drive them to the ER instead of a doctor’s office.”

Those with AHCCCS account for 27 percent of TMC patients. Because of other recent reductions to the program, the hospital has already lost $6 million in reimbursements.

As for the governor’s proposed cuts to AHCCCS, Strange says they would cost the hospital millions more.

Strange says that the possession of health insurance is not an issue that affects treatment when people arrive at TMC. They’re taken care of either way, she says.

The hospital does work with uninsured patients to obtain coverage or other financial assistance to help pay their bills. For those who can’t, TMC in 2009 provided $15 million in uncompensated care.

Also giving a substantial amount of free health care are Tucson’s physicians. Steve Nash, of the Pima County Medical Society, says that doctors in Tucson, on average, spend 3 1/2 hours per week providing free services.

Although the association hasn’t yet taken a formal position on Brewer’s proposal, Nash thinks the group will oppose it. “The impacts would be huge,” he says.

In order to implement her idea, Brewer will have to overcome two high hurdles—even assuming the compliant Legislature backs her proposal.

First, the federal government, either legislatively or administratively, would have to grant the state a waiver from a key component of last year’s health-care reform act. That provision requires states not to cut their expenditures on programs like AHCCCS, with severe financial penalties as a possible consequence.

Brewer’s second hurdle involves Proposition 204, which was overwhelmingly adopted by voters in 2000. The measure revised Arizona’s annual income eligibility for AHCCCS from 33 percent of the federal poverty level to 100 percent, a figure presently at around $18,300 for a family of three.

When compared to most other states, this change was generous—putting Arizona in the top third of states regarding the maximum income allowed for public-medical-insurance eligibility.

Brewer now wants to roll those figures back substantially, but Strange at TMC takes a different perspective.

“We think AHCCCS should stay as it is,” she says.

This article appears in Jan 27 – Feb 2, 2011.