The Board of Directors for Kingman Hospital, Inc. (KHI) and the Kingman Area Chamber of Commerce have collectively voted to support Governor Brewer’s proposed expansion of AHCCCS, as noted in the following statement:
In 2011, facing a state budget crises, the Arizona legislature decreased funding for Medicaid (AHCCCS) by $2.6 billion annually. With this action, 150,000 Arizonans subsequently lost their healthcare coverage, with another 80,000 estimated to lose coverage by early 2014. Many of these individuals are now seeking care in government subsidized clinics and hospital emergency departments.
Arizona hospitals are being critically impacted. For example, two years ago, Kingman Regional Medical Center’s (KRMC) annual cost for caring for the uninsured totaled $6.9 million. This fiscal year, those costs will double to roughly $14 million. Hospitals around the state have experienced similar trends and it poses a real threat to them and the communities they serve.
With the passage of the Patient Protection and Affordable Care Act, the federal government restructured Medicaid payments to states. The new rules include increased federal payments to state Medicaid programs if certain requirements are met. As a result, in 2012, Arizona attempted to restore AHCCCS to its original voter-mandated levels, which among other criteria, covered people with household incomes at or below 100% of the Federal Poverty Level (FPL).
The federal government rejected Arizona’s request and ruled states must provide coverage up to 138% of FPL to receive the higher federal match. Governor Brewer subsequently proposed expanding AHCCCS up to the federally required levels and also proposed an assessment on hospitals to help with the funding of the program.
For varying reasons, concerns have been raised about the expansion of AHCCCS to meet the federal requirements. KRMC and the Kingman Chamber of Commerce share some of those concerns. However, estimates show that the Governor’s proposal will grow the number of AHCCCS enrollees by less than five percent more than the voter-mandated levels. With higher federal matching funds, AHCCCS expansion is significantly less expensive for the state than implementing the original proposal (100% FPL) and foregoing the higher federal match.
With the current situation in Arizona, our hospitals are treating more uninsured people and absorbing substantial additional costs. We feel it is important for our community to know that, absent timely action, KRMC and other Arizona hospitals have essentially three options to deal with the uncompensated care that has been passed on to them:
1) Continue to cut costs – the major hospital cost component being labor/jobs
2) Eliminate sometimes important, but unprofitable services
3) Raise rates to non-governmental health plans, which amount to a hidden tax on businesses and individuals who purchase health insurance.
Unfortunately, it is clear that any of these actions will negatively affect Kingman’s healthcare, economy, and businesses. Although not a panacea, the Governor’s proposal partially mitigates these negative effects. Therefore, we believe the Governor’s plan is a pragmatic solution in today’s political landscape.
A healthy, growing hospital with more physicians and healthcare providers is vital to the health, quality of life, and economy of Kingman and surrounding communities. KRMC is the largest private employer in Mohave County and has added 800 jobs to the Kingman economy over the past 10 years. Businesses looking to relocate to Kingman carefully evaluate, among other things, the healthcare available in the area.
Leaders at all levels must recognize that continuing to unfairly shift costs of healthcare to businesses and individuals conscientious enough to purchase health insurance is not a sustainable solution and bad policy. We hope in the future there will be other creative solutions in Arizona that address these problems even more effectively. Those solutions will require careful thought and cooperation by our state leaders. In the meantime, however, we appreciate the Governor’s recognition of the current challenges and endorse her plan to extend healthcare coverage to Arizonans through AHCCCS expansion.