PHOENIX - With all Republicans opposed, a House panel voted Monday to reject the proposal by Gov. Jan Brewer to use federal money to expand the state's Medicaid program.
Foes said they cannot count on Washington to continue the flow of money to add 300,000 or more to the rolls of the Arizona Health Care Cost Containment System, which will leave Arizona taxpayers holding the bag when the federal cash dries up.
"Anybody who assumes the money is going to be there is mistaken," said Rep. Paul Boyer, R-Phoenix. He said that will force lawmakers to take money from other programs, such as education.
And Rep. Michelle Ugenti, R-Scottsdale, called it "just too risky."
But Monday's 7-4 vote against SB 1492 by the Appropriations Committee could prove largely meaningless.
At least seven Republicans in the 60-member House are expected to support expansion. That, combined with the backing of 24 Democrats, would provide enough support to have the issue resurrected when it goes to the full House, likely later this week.
That is exactly what happened in the Senate, where five Republicans sided with 13 Democrats for approval. But House Republicans who are opposed are preparing for a fight.
AHCCCS provides care for most individuals up to the federal poverty level, about $19,530 a year for a family of three. The federal Affordable Care Act provides money to expand that to an adjusted figure of 136 percent of the federal poverty level.
While Washington will pick up most of the expense of expansion, there is a $240 million annual cost to the state for restoring care to single adults below the federal poverty level. The state stopped enrolling them three years ago as part of a cost-cutting move.
Hospitals would pay that amount through an assessment to leverage about $1.6 billion in federal aid.
Rep. John Kavanagh, R-Fountain Hills, said the country, already running a $1 trillion a year deficit and having to borrow money, cannot afford what Republicans have referred to as Obamacare.
"It won't be us as taxpayers that have to pay this off," he said.
"It will be our children and our grandchildren," Kavanagh continued. "We're engaged in intergenerational theft here."
But House Minority Leader Chad Campbell, D-Phoenix, said Arizona turning down federal Medicaid funds won't make even a small dent in the $17 trillion federal debt.
The more practical question is what happens if the federal government does not live up to its end of the bargain.
Brewer built in a "circuit breaker," designed to have the expansion law self-destruct if federal funding drops below 80 percent of the additional cost. But Kavanagh said that still could leave the state on the hook for $1.2 billion by 2016 if more people than anticipated sign up.
The issue has put the majority of Republican lawmakers at odds not only with their own governor, but also with several business groups that back the governor's plan.
"The issue of uncompensated care is real," testified Glenn Hamer, president of the Arizona Chamber of Commerce and Industry. He said hospitals are suffering because of the number of people who get emergency room treatment and are unable to pay.
That, in turn, leads to a "hidden health-care tax" as hospitals seek to recoup those losses with higher charges on those who do pay, including insurance companies and individuals without insurance. Hamer pegged the cost of that as adding about $1,000 a year to the average health insurance bill.
Boyer, however, pointed out that hospitals consistently argue the Medicaid reimbursement rate is below what it actually costs them to provide the services. He said expanding Medicaid beyond the 1.3 million already enrolled will just exacerbate that problem.
"It's a real issue," Hamer acknowledged.
"But if it's a choice between getting 70 cents on the dollar and zero, 70 cents is better," he continued, saying that's why hospitals and medical associations support the plan.
Rep. Heather Carter, R-Cave Creek, who is carrying Brewer's plan in the House, declined to say on Monday exactly how she plans to get the defeated measure to the floor.
"But if it's a choice between getting 70 cents on the dollar and zero, 70 cents is better."
Glenn Hamer, president, Arizona Chamber of Commerce and Industry