The human cost of Arizona’s proposed Medicaid restrictions

Seeing patients at the free clinic is not just a welcome reminder that I can start piecing different information together as a medical student. It is also a reminder of what happens outside the exam room.

The patient who is coming in for follow-up for their diabetes and has signs of diabetic neuropathy may need to apply for financial assistance for their insulin. The patient with stroke symptoms who is afraid to go to the hospital because she is not sure how to cover costs of imaging may need assistance applying for Medicaid through the Arizona Health Care Cost Containment System, or AHCCCS.

Although free clinics are a wonderful resource for the uninsured, the reality is that it cannot fully offer services for everyone who may be lacking health coverage. The importance of that coverage highlights how critical programs like Medicaid/AHCCCS are for patients to receive the health care they need.

More than 1 in every 5 Arizonans — almost two million people — gets health insurance through AHCCCS. That is the reason why it is important to be aware of a number of potential upcoming changes to Medicaid.

The recently passed U.S. House of Representatives budget resolution poses a huge threat to those two million Arizona patients. The proposal calls for $880 billion in cuts from the House Energy and Commerce Committee, which would most almost certainly require significant cuts to Medicaid.

If federal funding for Medicaid decreases, this has direct effects on AHCCCS and its patients. Arizona is one of nine states containing a trigger law that will end Medicaid expansion in the state if federal match funding were to fall below 80%.

About 500,000 patients in Arizona are covered under Medicaid expansion. In Arizona, this Medicaid expansion covers childless adults and adults from 100% to 133% of the federal poverty line.

If federal matching funds for Medicaid falls below 80%, per Arizona law, the state will no longer be able to collect a Hospital Assessment Fund, which currently collects certain fees from hospitals in order to fund the state portion of the Medicaid expansion.

This would directly impact thousands of patients who may find themselves losing their health care coverage. That would be detrimental for any patient with a chronic condition where it is vital to go to follow-up appointments with their doctor and receive their medication.

Unfortunately, this is not the only potential change to Medicaid in Arizona.

AHCCCS is also submitting a proposal to the Centers for Medicare and Medicaid Services (CMS) to receive a waiver to allow AHCCCS to establish work requirements as part of its eligibility criteria, institute a five-year lifetime limit to access Medicaid benefits in the state and institute cost-sharing for “inappropriate use” of emergency care and transport services.

The details of this proposal and its implementation plan have yet to be fully determined by AHCCCS, but the mere existence of the proposal is alarming because we know what will happen if it is approved.

In 2018, Arkansas was the first state to implement Medicaid work requirements. Two years later, many patients had lost their health coverage, experienced issues paying medical debt and faced delayed treatment. Their health was clearly negatively impacted.

Despite arguments that work requirements would combat the idea of Medicaid as a source of “free welfare,” data often show that patients who are on Medicaid are either already working or face significant barriers to work.

Many Medicaid patients were kicked off when work requirements were established because of confusing administrative hurdles such as not being aware of the new reporting rules, not being successfully contacted or missing a deadline to verify some personal information.

Work requirements prevent people from obtaining coverage for health care they need. They also serve as barriers that make it more likely for people to not be able to find employment and stay in poverty.

For patients who may already be working, looking for work or have a health condition that significantly impacts their quality of life, it is a huge burden to navigate a complex policy that has not been shown to work in the way proposed. The Medicaid system is already deeply confusing for patients who are proficient in English and literate, much less patients who may have reading or language barriers, and Arizona has a diverse patient population where many patients do not have English as their first language.

The other proposed changes that Arizona is seeking in its Medicaid waiver are equally concerning in their harmful impacts on patients. What happens to patients who may need Medicaid for longer than five years? Or if patients are able to work and obtain health coverage but later need support for health care coverage again? While they normally would be able to apply for Medicaid, they would be unable to do so under this proposed change because they exceeded their five-year lifetime use of Medicaid. How will they receive care?

It poses a lot of questions about potential disruptions in needed health care for patients and the administrative hurdles they would have to face to prove that they need care and to scramble to find access to coverage when their main focus could be on meeting with their doctor, getting their medications and necessary procedures, and maintaining their health.

Similarly, the provision on adding cost-sharing to inappropriate use of the emergency department care and transport services seems like a punitive measure that does not provide nuanced support for patients.

Many patients who frequent the emergency department often are derogatively referred to as “frequent fliers,” but this masks that many of these patients may have chronic conditions, are often unhoused, have substance use disorders or have mental health issues. They may be going to the emergency department precisely because they do not have the means to access other health care settings.

Instead of focusing on limiting access to health care coverage, we should be spending time and resources on thinking through how to better meet the health care needs of this patient population.

What can we do about all these changes that are being discussed to Medicaid?

One concrete action suggested by the Arizona Public Health Association is to advocate for decoupling the Hospital Assessment from the requirement that federal funds for Medicaid to Arizona cannot fall below 80%. As mentioned earlier, the Hospital Assessment currently funds Arizona’s Medicaid expansion and is at risk of being ended under the trigger provision on federal matching, which would effectively end the state Medicaid expansion.

If this provision were to be removed, the Hospital Assessment could continue to be collected to help fund the expansion. Cuts to Medicaid will also spur discussion about the impact on the state budget — and while there would be a need to allocate more funds, at least keeping the existing Hospital Assessment fund will ensure one source of funding so that patients currently eligible for Medicaid under the expansion do not suddenly find themselves without coverage.

Another action regarding the proposed AHCCCS waiver to CMS is to provide public comment. AHCCCS is hosting a number of upcoming public forums and the opportunity to email written comments as an individual or organization to waiverpublicinput@azahcccs.gov before March 20. After this, AHCCCS will be formally submitting the waiver to CMS. People with personal stories or thoughts on the impact of the proposed Medicaid changes should consider attending a forum and submitting a comment.

It can be disheartening to think about the negative effects coming down the pipeline. It is easy to forget that these policy changes and numbers are affecting real people. But I think about how patients have so much to worry about with their health. They shouldn’t have to worry about where to access care and how to afford it.

That is why I care about the changes that may put Arizona’s Medicaid program at stake, and why I believe you should care too. Arizona patients deserve better.