Due to steep budget cuts, Arizona faces challenges funding its health care system, according to Gov. Jan Brewer’s chief health adviser.

Don Hughes, Brewer’s health care policy adviser, delivered a lecture hosted by the Mel and Enid Zuckerman College of Public Health to kick off Natural Rural Health Week. During the lecture, he described challenges Arizona will encounter with the expiration of the temporary one-cent sales tax created by Proposition 100.
The tax, set to expire in May, funds education, public safety and health and human services.

The Affordable Care Act expanded the coverage for Medicaid, and the national system is estimated to grow by about 16 million benefactiaries. In June, the Supreme Court ruled that states can voluntarily issue the expansion. Arizona opted to expand early on, hurting the state’s funding, Hughes said.

Arizona will incur a cost of about $1.5 billion over the next four years, he added. To offset these costs, the Arizona Health Care Cost Containment System — the state Medicaid system — froze enrollment in the program to save $500 million.

The program also created the Safety Net Care Pool, which uses local dollars to cover uncompensated hospital costs that totaled $332 million. This measure is set to expire in January 2014. A waiver implemented mandatory copays and now allows more elderly individuals to receive care at home than any other state.

But if legislation is not passed to continue these measures, Hughes said, 50,000 to 60,000 Arizonans will lose their health care coverage.

For the future of Arizona health care, Hughes said Arizona is working on various measures to help people.

Arizona has a highly competitive insurance market, said Hughes.

“Alabama, for example, their BlueCross BlueShield program has about 80 percent of their market share; that’s not really competitive,” Hughes said. “In Arizona … if you want coverage there is a company that is more than likely to cover you.”

Arizona has submitted a benchmark plan to the federal government, which had to meet several requirements, such as what services of the statutory service categories — like hospitalization and maternity services — would be offered.

The state of Arizona has received federal grants for the funding of its planning, design and start-up costs through Dec. 31, 2014. Arizona also gets to choose who funds them, the number of insurers, the eligibility requirements for AHCCCS and the benefits that are available for the plan.

If approved, coverage would begin in January of 2014.