Claiming Arizona has unique problems, Gov. Jan Brewer formally asked federal officials Tuesday for permission to scale back the state's Medicaid program.
In a letter to Health and Human Services Secretary Kathleen Sebelius, Brewer proposed to eliminate free care for about 280,000 of the 1.2 million people enrolled in the Arizona Health Care Cost Containment System.
About 11,000 of these are children, though most of those who would lose coverage are childless adults.
"Please know I understand fully the impacts of this rollback and it is with a heavy heart that I make this request,'' the governor wrote.
"However, I am left with no other viable alternative,'' the governor continued, citing the state's anticipated $1.2 billion deficit for the coming fiscal year. Brewer figures that scaling back eligibility on Oct. 1 -- the soonest she thinks Sebelius could act -- would save $540 million.
Brewer later acknowledged that other states are facing their own financial troubles.
"Let me say that Arizona is in a unique position to begin with,'' she said.
The Arizona Health Care Cost Containment System, the state's Medicaid program, is built like a health-maintenance organizations, with health plans paid a flat monthly fee to provide all necessary care for those enrolled. Most other Medicaid programs are on a fee-for-service basis, with doctors and hospitals sending bills directly to the government each time they provide care.
Brewer also noted that Arizonans voted in 2000 to provide care for everyone below the federal poverty level, about $18,300 a year for a family of three.
In most cases, the federal government requires coverage only for those earning about a third of that, though there are exceptions for some children and pregnant women. And there is no mandate to provide care at all for childless adults.
The result, Brewer said, is AHCCCS now consumes nearly 30 percent of the total state budget, compared with just 17 percent four years ago.
"There's no way we can sustain it and continue our budget,'' she said. "We just simply don't have the money.''
Brewer said she is meeting next month with Sebelius but has no assurance that the waiver, even if granted, can come by Oct. 1. Any delay will reduce the savings to the state and force lawmakers to cut elsewhere.