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March 4th, 2011
Grijalva Calls for Public Comment Period, Fiscal Report Before Arizona Cuts Hundreds of Thousands From State Medicaid Program

Washington, D.C. – Rep. Raúl M. Grijalva today sent a letter to Cindy Mann, director for Medicaid and State Operations at the federal Centers for Medicare and Medicaid Services (CMS),outlining his concerns about Arizona’s recently announced plan to drop approximately 280,000 state residents from the state Medicaid program. The letter, which follows a March 1 meeting between Grijalva and Mann in Washington, requests a 90-day public comment period on the agency’s recently released guidance allowing the state to drop patients; a hearing in Arizona between members of the public, the health care community and CMS officials; and the preparation of a fiscal analysis on the economic impact of what dropping so many people from the Medicaid program would do to the ongoing economic recovery.

It is unclear when CMS might respond to the letter. CMS recently released a guidance allowing Arizona to slash Medicaid rolls later this year. Grijalva’s letter responds to that guidance.

“Anyone who thinks the best way to save money is to cut medical coverage for hundreds of thousands of people is in for the shock of a lifetime,” Grijalva said. “This will devastate our economy in several ways, and the public deserves a chance to make its voice heard before any action is taken by the state of Arizona.”

Gov. Jan Brewer’s proposed cuts to the Arizona Health Care Cost Containment System (AHCCCS), the state Medicaid program, would eliminate $541.5 million in state general funds and $1.64 billion in total funds from the AHCCCS budget in fiscal year 2011. At the same time, the state legislature Feb. 16 passed a $538 million package of tax cuts, including a nearly 30 percent reduction in corporate income taxes. The package allows multi-state firms that sell most or all of their goods outside Arizona to use a tax computation formula to escape paying any state corporate income taxes.

“This is slash and burn tactics against working families,” Grijalva said. “Gov. Brewer is telling Arizonans health insurance is a lower priority than giving taxpayer money to her corporate friends. The state will be severely worse off if this all goes according to her plan.”

As the letter says, “The recession has taken a heavy toll on our society and has overwhelmed the very safety net programs Americans rely on. However, slashing the programs that have prevented further societal hardships would be a mistake. Input and consideration from the communities that may be impacted and a sound fiscal analysis must be completed before moving forward with this guidance.” Read the full text of the letter at /sites/  

The Arizona Hospital and Healthcare Association has noted several immediate impacts of the proposed cuts:

– The loss of this coverage would disrupt and devastate the lives of many Arizonans living in poverty, and inhibit their ability to work if they are not healthy enough.

– Patients could be cut in the midst of lifesaving outpatient therapies, including chemotherapy and dialysis. A sudden loss of coverage for these patients could mean the difference between life and death.

– The uninsured often put off primary care and outpatient treatment due to the inability to pay, and as a result turn to emergency departments for their medical needs. This inefficient model places strain and excess cost on the entire state healthcare infrastructure.

– When patients are uninsured they are “cost-shifted” to self-paying and commercially insured patients, increasing costs to everyone.

According to a recent study by the L. William Seidman Research Institute at Arizona State University’s W.P. Carey School of Business, Brewer’s AHCCCS funding reduction would result in the loss of 30,000 jobs statewide. “Why lawmakers elected to represent the state’s interests would make that kind of decision is completely beyond me,” Grijalva said. “It’s an outrage to common sense.” The report is at

According to the Center on Budget and Policy Priorities, Medicaid funds are much more powerful as economic assistance than tax cuts. As a February analysis explains, “[M]ainstream economics suggests (and studies such as those carried out by the Congressional Budget Office and Mark Zandi, chief economist for Moody’s show) that most such tax cuts have a far lower ‘bang for the buck’ in promoting economic growth and creating jobs in a weak economy than does the Medicaid spending that would be reduced, because a substantial share of the tax cuts would be saved rather than spent. [. . .] The net result of repealing [Medicaid funds] thus almost certainly would be weaker economic growth and the loss of the thousands of jobs that would have been created by the lost Medicaid spending.”

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