MEDICAID MATTERS: Arizona Section 1115 Waiver Request Sets a New Low

I recently pulled out my copy of the Social Security Act to reread Section 1115 which provides the Secretary of Health and Human Services with the authority to permit waivers of certain rules of the Medicaid program. These projects were conceived of by Congressional drafters as “demonstration projects” or “experimental pilots” which “in the judgment of the Secretary, are likely to assist in promoting the objectives” of the Medicaid program. (OK other programs as well but we won’t get into that now).

What do you think is the objective of the Medicaid program? Do you think that eliminating coverage for 280,000 people is consistent with the objectives of the program? Apparently Governor Jan Brewer of Arizona does. In her Section 1115 demonstration request submitted on January 25, she asks Secretary Sebelius to waive the current stability provisions preserving Medicaid eligibility levels (aka maintenance of effort requirements) and eliminate coverage for 280,000 parents, adults without children living in the home and persons receiving coverage through the medically needy program. Governor Brewer argues that doing so would promote the objectives of the Medicaid program by allowing it to return to its core function of serving mandatory populations. 

I wonder what we would learn from eliminating coverage for this many low-income and vulnerable Arizonans. I will go out on a limb and predict that the vast majority of them will become uninsured, sicker and some will even die. In fact, a few people have already died in Arizona because Governor Brewer eliminated coverage for transplants. Doesn’t sound like a great experiment to me.

Arizona is facing tough budget times like many states. But there are other ways to address these issues – and the Secretary has indicated her willingness to work with Governors on other options for savings in the Medicaid program.  For example, the Governor’s waiver request says that funds are not available for Medicaid, however, she has proposed increases in her budget for Corrections, the Arizona Office of Tourism and a new Commerce Authority to provide incentives for corporate re-location.  It would take some hard work and smarter choices to figure out how to fulfill the state’s commitment on health coverage, but it would be worth the effort because, at the end of the day, disaster could be averted.

Secretary Sebelius recently said there is “legal uncertainty” about whether or not a waiver can be granted to reverse a policy such as Arizona’s.  Even if the lawyers determine that Secretary Sebelius has the legal authority, I would urge her to respond to this waiver request with a resounding “no”!

(Editor’s Note: This is the first in a series of regular blogs on why Medicaid matters. We welcome your suggestions for future “Medicaid Matters” blog posts.)

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy