Administration Unlikely to Block Arizona Medicaid Cuts
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Administration Unlikely to Block Arizona Medicaid Cuts

The Obama administration would permit a controversial plan by Arizona's governor to cut an estimated 250,000 impoverished adults from Medicaid, despite a provision in the new health-care law barring states from tightening their eligibility standards for the program, federal officials said Wednesday.

Gov. Jan Brewer (R) formally requested a federal waiver from the provision last month to make the cut. But in a letter dated Tuesday, Secretary of Health and Human Services Kathleen Sebelius wrote that no waiver is necessary, because the provision does not apply to Arizona's somewhat unusual circumstances.

The decision could further embolden the other 28 Republican governors who recently released a letter charging that the health-care law's Medicaid provisions impose crushing costs at a time when many states are grappling with budget shortfalls.

However, advocates for the poor noted that only about a dozen states have Medicaid programs with the particular set of features that would enable Arizona to trim its rolls. In one of those states, Indiana, the deputy chief of staff to Gov. Mitch Daniels (R) said he was not planning to follow Arizona's example. And it is not clear that leaders of any other eligible states are interested either.

"Certainly we are keeping a watchful eye on a handful of states that might wish to go in this direction," said Joan Alker, co-executive director of the Georgetown Center for Children and Families. "But Arizona is in a very unique situation . . . so it's my hope that [it] continues to be an outlier."

The state has already made some of the country's most drastic cuts to Medicaid and other health initiatives - halting coverage of organ transplants for about 100 indigent patients on a waiting list, slashing payment rates to doctors by 10 percent, and freezing enrollment in its supplemental health insurance program for children.

At issue now is the health-care law's Medicaid spending requirements for states. To participate in the health insurance program for the poor - and receive billions in matching federal dollars - states must cover all children and pregnant women up to specified levels of poverty, as well as various other populations, such as some parents of poor children.

For years, states could also choose to use extra federal funds to expand that coverage beyond the minimum to include, for instance, childless adults who are poor. The health-care law turns that option into a mandate. Starting in 2014, states will have to open Medicaid eligibility to all individuals who earn up to 133 percent of the poverty level - with the federal government covering nearly all the additional cost.

In the meantime, the law directs states to maintain their current level of coverage, even if it is above the old minimum standard.

Read more at The Washington Post.