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The Associated Press February 24, 2010, 5:21PM ET

Ariz. hospitals rip plans for health program cuts

Cutting health care programs to help close Arizona's budget deficit would inflict pain on more state residents than the nearly 400,000 people who stand to lose Medicaid coverage or other services, Arizona hospital officials said Wednesday.

"The cure is worse than the disease," said John Rivers, president of the Arizona Hospital and Healthcare Association. "The proposed budget does a lot of long-term damage to the prospect of recovery in the economy."

The association said the proposed cuts in health care programs would result in 42,000 fewer jobs throughout the economy, and they would burden individuals and businesses with higher health care costs, clog emergency rooms, and generally make the state an unattractive place for people to live and businesses to locate.

Rivers said a tax increase may be needed to pay for the state's health care programs.

To gauge the jobs impact, the association commissioned a study by Arizona State University economists. The report was based on economic modeling of the impact of reduced state funding and lost federal matching dollars.

The hospital group, the Arizona Chamber of Commerce and Industry and other advocacy groups are pushing back against a part of Gov. Jan Brewer's budget-balancing proposal that calls for major cuts in health care programs, including Arizona's version of Medicaid, the Arizona Health Care Cost Containment System.

Republican legislators have yet to unveil the budget plan they are readying for consideration next week, but they have said it is based on Brewer's proposal.

The proposed rollbacks would remove 310,000 people from AHCCCS, leaving it to serve about 1 million.

Another major cut would eliminate the KidsCare program serving 47,000 children. Cuts in smaller programs would affect 36,500 people.

In urging legislators to ask the public to allow a rollback of a costly voter-approved expansion of AHCCCS eligibility, Brewer said the state cannot afford its current health programs.

Brewer's "budget math" appears to be correct, Rivers acknowledged Wednesday. He said the association is preparing a health care funding recommendation, which should be ready within several weeks.

"It's our obligation to step up now with something," he said. "Yes, there will have to be some new tax increase."

Any such increase would be in addition to the three-year, 1-cent sales tax increase proposed by Brewer and placed by the Legislature on a May 18 special election ballot.

It took the Republican governor approximately 10 months to get that, and any further increase is sure to meet strong resistance from many lawmakers.

The state faces a revenue shortfall of at least $2.6 billion on projected spending of $9.5 billion in the fiscal year starting July 1.

The proposed health care cuts would save approximately $500 million in the next fiscal year. The savings for subsequent fiscal years would be roughly twice as large because the AHCCCS eligibility rollback would not take effect until halfway through the next fiscal year, on Jan. 1, 2011.

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