President of the Arizona Senate, Andy Biggs, Responds to Mike Broomhead

Dear Friends of Liberty,

After seeing an email from Mike Broomhead titled “Medicaid Resolution Seriously Flawed,” I asked president of the Arizona Senate, Andy Biggs, if Mr. Broomhead’s statements were valid and, if not, what was the truth.  Senator Biggs answered that request, which you will see below.  If you didn’t see Mike Broomhead’s email, it appears below Senator Biggs’ rebuttal.

Many thanks to Senator Biggs for his thoughtful analysis.

In the name of God, Family, and Civic Duty

Anita Christy

www.GilbertWatch.com

 

“Recently local talk show host and Medicaid Expansion spokesperson Mike Broomhead wrote a column aimed at rebutting the Republican Legislative District 15 Resolution against the proposal to restore the entire population of Proposition 204, as well as expanding coverage to fully implement Obamacare.  In the debates over Obamacare, Mr. Broomhead was a harsh critic, calling it socialized medicine. Now he's on the frontlines in support of the expansion in Arizona. 

The fact is that the Medicaid expansion is full implementation of Obamacare. It far exceeds the will of the voters expressed in Prop 204. It disregards the will of the voters expressed in Prop 106.  It expands government.  It fails to eliminate the “hidden healthcare tax.” It was not in harmony with the Republican principles espoused when Obamacare was debated at the federal level, nor is it in harmony with Republican and free market principles today. Elected Precinct Committemen, County Republican Officers, and elected leaders of legislative districts are expressing their discontent with the Governor’s proposal. Instead of being heard by our elected officials, they are being attacked by them.   Paid shills and hirelings of the hospitals (who want to expand their profits) are using every medium to give the appearance that there is widespread support for this Democratic supported proposal among Republicans. Perhaps supporters of this proposal would do well to listen to the base of the Party.

The following is an answer to Mr. Broomhead. A point-counterpoint approach would be very difficult to follow, so I will summarize his assertions,  getting to the foundation of his position, and then respond.

Mr. Broomhead asserts: 

*            Proposition 204 was approved by the voters, and the Governor’s plan to expand Medicaid honors the will of the voters.  

 The  proposal to expand government healthcare isn’t limited to the 100% Federal Poverty Limit (FPL) population covered by Prop 204 but instead expands the target population to 138% FPL.  Further, when Prop 204 was put forward the Prop 204 population was said to be about 40,000 and health care for this group was to be paid from tobacco taxes.   The voters did not approve a massive expansion of the population who would receive taxpayer funded healthcare when they passed Prop 204.  In the meantime the voters voiced their opposition to Obamacare when they passed Prop 106 in 2010. 

*            The expansion/implementation is limited to Prop 204 and has nothing to do with AHCCCS or Obamacare.

In reality the proposal has everything to do with AHCCCS because that is the state agency that will administer the full implementation of Obamacare contemplated in the planned expansion, controlling the new hospital bed tax, and enforcing the tax.  AHCCCS will be required to make sure there are enough providers and will have to monitor the expanded population for costs, fraud, and other administrative functions. Further, the population at issue is the optional care population, so that expanding Medicaid coverage (which is called AHCCCS in Arizona) is actually full implementation of ObamacareIt is optional.  It is not mandatory.

*            The State General Fund is protected because of the Hospital Bed Tax and the “Circuit Breaker” will protect the state in case the Feds fail to fully fund the matching funds.

Proponents of the expansion claim to protect Arizona when the Feds reduce the amount of money now promised to Arizona to pay for the expansion of Obamacare.  The Feds promise to pay 10 times the amount Arizona will pay - billions of dollars per year- and then the Feds will reduce that amount to 90% over six years.  If the Feds drop below 80% the 400,000 people who will be added to the program will all be booted off.

If the political fallout from removing 50,000 people from socialized medicine is enough to make Republicans go wobbly, surely a similar move with eight times as many people will result in apoplexy by the Republicans in the Legislature.

The Feds have consistently broken their promises to fund federal programs.  Under the current sequester Arizona’s Department of Economic Security is having to scramble to deal with pull-backs in federal funding.  In fact, the Feds have recently reduced Medicare coverage.  When the Feds breach their promises on the expansion, the State’s General Fund will be on the hook.  The costs will crowd out other state programs such as education.  

*             The hospitals will not pass the expense of the bed tax onto insurers.  In other words the “hidden health care tax” will disappear.

“Uncompensated care” is defined as care that is provided to a patient who doesn’t pay for it.   Hospitals make up for this by negotiating with insurers to receive higher compensation from those who pay for insurance, to cover the cost of care for those who don’t pay the full freight.  So there is really no “uncompensated” care.  Admittedly it gets passed on to insurance companies, and onto ratepayers. This process is called the “hidden health care tax.”

This is exactly what will happen under the expansion proposal with the $254 million dollars that hospitals will be taxed each year in order to receive the federal dollars. They will pass it along to insurance companies, who will pass it onto insurance customers.  In the legislation proposed there is no protection against the “hidden health care tax.”  There is no transparency or audit provisions to make sure the cost isn’t passed along.  And more telling, there is not even a general statement preventing the costs from being passed to consumers.  

*              The absolute delegation of powers to the AHCCCS director by the Legislature is  similar to the limited fee making authority that the legislature occasionally gives to various state agencies.

 One of the differences is that the new authority is unbridled. The fee authority is given to any AHCCCS Director with no expiration of that authority.  That means that a director serving under a future governor will have the same authority that is given in the expansion proposal.  The legislation also delegates authority to the Federal government.  There are simply not the same checks on the proposed delegation of power to an unelected state bureaucrat that the legislature typically places on agencies in other cases.  This is a recipe for tyranny. 

*             The Governor fought against Obamacare and should be supported in her decision to implement the Medicaid Expansion, which isn’t “Obamacare.”

 This expansion is not mandated. This expansion is optional.  So, regardless of Arizona’s previous position against Obamacare, implementation of this optional expansion is a submission to Obamacare. 

*             Anyone who opposes the Obamacare expansion is a naïve idealist and not being realistic.

Let’s examine some of the arguments in support of the expansion that are either idealistic, naïve, or simply without merit.  One argument used is that this expansion is the law of the land.  That statement is untrue.  The expansion is optional.  Even the U.S. Supreme Court held that this portion of Obamacare is optional. 

Another argument is that expansion is justified because our competitor states are all doing it.  CEOs have recently rated Arizona as a top-ten state to do business.  Our competitors are the other states in the top ten, not our regional neighbors that aren’t business friendly (Oregon, Washington, California, Nevada, New Mexico, Colorado).  Of the top-ten, only Florida’s governor has opted to expand Obamacare, and the Florida legislature is fighting his plan.  Other top business states (Texas, Indiana, Utah, etc,) are rejecting the expansion. 

Is it realistic for Arizona to optionally expand Obamacare, much like the fiscal basket cases in the region, such as Nevada and California? 

It isn’t realistic to claim that full implementation of Obamacare by expanding those covered by taxpayer funded healthcare from 100% of the federal poverty level (approved in Prop 204) to 138% of FPL is a “slight” increase and is merely implementing the will of the voters.  That is like paying $4.00 per gallon of gas yesterday, and today paying $5.52. No one thinks that $5.52 is a “slight” increase over $4.00.

It is not realistic to claim that if we don’t take federal dollars some other state will get Arizona money.  If that is true, then it’s also true that we will be depriving another state of federal dollars if we take the money.  That isn’t realistic, either.   

The federal structural deficit is nearly $17 trillion. Further, the United States annual structural deficit, when including Medicare and Social Security obligations, exceeds $4 trillion.  Expanding Obamacare places an unfair economic burden on future generations in order to pay for the healthcare of people today. That is the reality. 

*              Republicans shouldn’t tear each other apart on this issue.  

It isn’t those opposed to the Obamacare expansion who are attacking their fellow Republicans.  It’s people like Mr. Broomhead who insult those who oppose the plan.  It is those who back the plan who have spent hundreds of thousands of dollars to send out postcards to people urging them to harass their legislators into supporting the expansion.  They have also paid for television ads.  Supporters of Obamacare have hired a lobbyist to try and rally the base, when the base of the Republican party is speaking loudly against the expansion without the aid of a paid lobbyist to direct them.  Political leaders who support the plan have produced ads and mailers while the opposition is the result of a groundswell of the Republican base. 

*              The plan to fully implement Obamacare is merely a safety net.

To say that expansion of socialized medicine is merely a safety net does not track.  Arizona has always been very generous in its state sponsored healthcare program.  Currently there are about 1.2 million people receiving this taxpayer funded care.  The expansion will take that number up to 1.6 million people.  That will be about one-fourth of Arizona’s entire population receiving taxpayer funded healthcare. This isn’t a safety net anymore, this is an incentive program to join socialized medicine. 

*             Obamacare is limited government.

Increasing Obamacare by 33% increases government.  Since I  arrived at the legislature I have seen the program grow in caseload and in general fund obligations.  All efforts to minimize the program have been rejected by the federal government. “

Andy Biggs, President
Arizona Senate
LD12 

From: "Mike Broomhead, Honorary Chairman, Restoring Arizona" <info@restoringarizona.com>
Date: March 13, 2013, 6:18:07 PM MST
Subject: Medicaid Resolution Seriously Flawed

 

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Restoring Arizona

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Response to:
The Maricopa County Legislative District 15 Republican Committee's
Resolution In Opposition to the Governor's Medicaid Plan

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LD 15 says: WHEREAS, the Voters of Arizona clearly expressed their will to reject implementation of the Affordable Care Act (Obamacare) by amending the Arizona Constitution via Proposition 106 in 2010, and thus preventing an individual mandate; and

TRUTH: It was Republican Governor Fife Symington, who first proposed the idea of covering adults in the mid-90s. Then Arizona voters approved the measure in 1996 and again in 2000 via Proposition 204. The support from Arizona voters was overwhelming. The Governor's plan simply honors the will of the voters. The Governor's Medicaid plan has nothing to do with enforcing the individual mandate. In fact, it was clear that Proposition 106 did not affect the AHCCCS program whatsoever.

LD 15 says: WHEREAS, the State of Arizona cannot afford to be saddled with the costs of implementing this federal program and the "Circuit Breaker" clause is insufficient to prevent an out of control escalation of said costs; and

TRUTH: The Governor's plan protects the State's General Fund and takes Prop. 204 costs off the State's books by working collaboratively with the hospital industry to formulate an assessment. The State is clearly able to terminate this proposal at any time, so the "circuit breaker" also protects the State from any federal "bait and switch."

LD 15 says: WHEREAS, the "assessment" on hospitals is in reality just a hidden tax that will ultimately be passed on to hospital patients in the form of higher costs and is a disingenuous attempt to subvert the legislative process requiring tax increases receive super-majority approval in the legislature; and

TRUTH: Under the Phoenix Access to Care Ordinance, which the Governor has proposed adopting at a statewide level, hospitals are forbidden from passing on the costs to consumers. No law, however, protects consumers from hospitals passing on their costs of uncompensated care. We – all of us – are paying for uncompensated care. We are all covering the cost of care for people who do not have insurance but who still get cancer or people who get in a motorcycle accident and end up needing care in a trauma center. Recent studies put this at nearly $2,000 per family. The assessment is similar to current programs, like the Managed Care Premium assessment and the recently passed Nursing Home assessment. It is well within the bounds of the Arizona Constitution and the precedent set by the legislature to allow agencies to set their own assessments for the industries that they regulate.

LD 15 says: WHEREAS, no government entitlement program has ever been scaled back, eliminated or held within its initial costs [sic] projections, and the long term and evolving costs of the Obamacare Medicaid Expansion will cause a severe financial hardship on Arizona’s budget, just as surely as Obamacare will do the same to the country; and

TRUTH: Not in Arizona – in 2011, when the state's general fund was spread too thin, Governor Brewer led the effort to reduce the AHCCCS budget by $2.5 billion, including eliminating the program that provided coverage for people with catastrophic medical events, known as the spend-down program. Further, the State froze enrollment for its KidsCare and childless adult program. In total, these efforts reduced the rolls by about 180,000 people.

Although the goal was always to restore access to this population to respect the will of the voters, when the state has faced difficult fiscal times, the Governor and legislature have not been afraid to scale back government entitlements. Further, Arizona already knows what it takes to provide coverage to the Proposition 204 population; it has been studied by experts from Harvard and published in the New England Journal of Medicine. The cost of this care is already well known to actuaries.

And finally, Governor Brewer's plan calls for an automatic "circuit breaker." Under this provision, the expansion population would automatically be repealed without another vote of the legislature if the federal government's share falls below 80%.

LD 15 says: WHEREAS, the U.S. Supreme Court explicitly rules that each State is free to reject implementation of the Obamacare Medicaid Expansion and Insurance Exchanges, the two cornerstones of the Affordable Care Act, without which Obamacare collapses as a practical and functioning program; and

TRUTH: The Patient Protection and Affordable Care Act is the law of the land. Although Governor Brewer vehemently and courageously opposed the passage of the legislation, and participated in the lawsuit before the U.S. Supreme Court that sought to strike down the act, the Affordable Care Act is here to stay. Twenty-six states, including Arizona have rejected the Act’s offer to set up state exchanges; this will not stop the federal government from setting up a federal exchange. Similarly, failure to accept the federal government's offer to fund the restoration of Arizona's Medicaid program will not have any meaningful impact on the success or failure of the overall legislation. The Governor's plan is about Arizona. It is not ObamaCare.

LD 15 says: WHEREAS, the Federal government is incapable of implementing these programs by 2014 or even 2016 without the local organization, legwork, and the financial subsidies of the States; The fastest and most efficient means to end Obamacare is simply for each State to refuse their implementation and allow them to fail; and

TRUTH: The fastest and most efficient means to end ObamaCare would have been for the American electorate to vote for Mr. Romney, whom the Governor endorsed, campaigned for and fully supported. Elections have consequences. Elected leaders have a duty to govern and make tough choices. Her plan does right by Arizonans. Resolutions like these come from those who have the luxury of living in their ideological worlds without having to understand the real-life implications of their theories.

LD 15 says: WHEREAS, by holding AHCCCS as the conservative model for Medicaid and an example to the other states, Governor Brewer is advocating for a conservative expansion of socialism, a truly contradictory concept; and

TRUTH: This is a time for Republicans to rebuild and unite, not tear each other apart. Since when is it socialist to provide a safety net for the elderly, the disabled, the poor? And the AHCCCS system is truly a shining example of limited government where care is managed by private health plans and provided by private physicians and hospitals, the very same ones we all see for our own care.

LD 15 says: WHEREAS, supporting a government takeover of our health care system, even to secure large amounts of federal funds, does NOT reflect the values of the Republican Party or the interests of the taxpayers of Arizona; now therefore be it

TRUTH: Once again, the Governor's plan is about Arizona and Arizona's system is one of limited government. Limited government works. As the leader of the Republican Party, the one whom Republican precinct committeemen have been elected to support, Governor Brewer's plan is the embodiment of the Republican values of private sector partnerships and limited government interference.

LD 15 says: RESOLVED, that we, the Maricopa County Legislative District 15 Republican Committee do (unanimously) affirm and declare our opposition to the Governor’s plan to expand Medicaid in support of Obamacare; and, be it further

RESOLVED, that we, the Maricopa County Legislative District 15 Republican Committee demand that the Legislators of the Arizona State House and Senate stand with the people of Arizona in opposition to the Governor’s plan to expand Medicaid in support of Obamacare by defeating any bill to such ends.

TRUTH: Opposing the Governor's proposal to restore Arizona's innovative and nationally acclaimed AHCCCS program ignores the will of the voters, the fiscal realities of our state and the escalating costs of uncompensated care that threaten to drive up the costs of private health insurance premiums, hurt Arizona businesses and make Arizona uncompetitive. Preserving a strong and competitive economy and fostering the free-market ideals that AHCCCS embraces are at the core of the Republican Party’s beliefs. So much so, in fact, that the AHCCCS enabling legislation was passed by a Republican-led legislature in 1981. Then, Republicans understood that their role as elected officials was not to "hold the line" but to come up with pragmatic, responsible solutions to the state’s healthcare crisis. Now, our elected officials are faced with the same choice. Governor Brewer has proven she understands that her primary responsibility is to improve the lives of the citizens of Arizona; it is unfortunate that the Pima County GOP does not hold itself to the same standard. The Governor's plan supports Arizona. It is not in support of ObamaCare.