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10:47 PM Sun, Dec. 16th

STATE: Brewer's Medicaid cut plan advances

PHOENIX (AP) - Legislative committees split along party lines as they voted Wednesday to let Republican Gov. Jan Brewer seek federal clearance to suspend Medicaid health care coverage for 280,000 low-income people to help balance the state budget.

With Republicans supporting a Brewer-backed bill authorizing a waiver request and Democrats against it, the House and Senate committees' votes set the stage for action by the full Legislature today on the second day of a special session called by Brewer.

The waiver would be to the federal health care overhaul's "maintenance of effort" requirement. That requirement prohibits states from reducing Medicaid eligibility below early 2010 levels and applies until the overhaul expands Medicaid coverage in 2014.

Brewer's proposed suspension of eligibility for about a fifth of the enrollment of the state's Medicaid program is a key element of her budget-balancing plan. It would save the state an estimated $541.5 million, or half of the $1.1 billion shortfall that Brewer has projected for the fiscal year that begins July 1.

If approved, the suspension would begin Oct. 1 and run through Jan. 1, 2014, when the federal care overhaul expands Medicaid nationwide.

Those affected are adults provided coverage under an expansion of eligibility approved by voters in 2000 for the state's Medicaid program, the Arizona Health Care Cost Containment System.

Brewer and Republican legislators contend the state cannot afford to continue providing coverage for the so-called Proposition 204 population because two designated sources of funding - tobacco tax revenue and money from a settlement with tobacco companies - have proven inadequate.

"It's time to do what we really have to do," said Sen. Sylvia Allen, R-Snowflake. "There are no easy answers or solutions, and the choice that this body has been given is education, health care or prisons."

Arizona's Medicaid program is more generous than most other states, providing coverage for people with household incomes up to 100 percent of the federal poverty level.

The program's cost has gradually become an increasing burden for the state, particularly during the current budget crisis that began in late 2008.

Democratic legislators said the state should not reduce health care and that doing so would thwart voters' decision in 2000 to expand eligibility and burden the health care industry with increased demand for uncompensated care.

"It's not that these folks aren't going to need health care anymore," said Sen. David Schapira, D-Tempe.

A person who doesn't get a colonoscopy if denied Medicaid coverage "instead is going to get colon cancer," Schapira said. "Do you think they're going to sit home and die? No, they're going to seek treatment."

Republicans acknowledged that reduction of the Medicaid eligibility could draw a legal challenge based on the voter-approved law, but they argued that the law gives lawmakers leeway to reduce the program to fit available funding.

The Legislature's regular session is already under way, but Brewer spokesman Paul Senseman said authorizing the waiver request during a concurrent special session would allow the request to be submitted sooner to federal officials.