Arizona Governor Brewer and Medicaid Cronyism

Updated 6/14/2013

Arizona Governor Janice Brewer, after publicly opposing Obamacare before the 2012 elections, has been trying ever since to implement the deeply unpopular law with the expansion of Medicaid in her state.  Her push to implement this expansion of the already failing Obamacare is a tale of cronyism and backroom deals. In the end if she is successful it will only benefit the dealmakers, not the people of Arizona.

At the time of this writing, expansion has passed the Arizona House and moves to the Senate, where it will likely pass, as well. The passage happened when a group of Republicans calling themselves “the Band of 9” broke with their caucus and allied with the Democrats, at least for budget talks.  That gave Democrats an effective majority in the chamber.

The expansion of Medicaid is to cover those single adults making between the Federal Poverty Level (FPL) of $11,490 and $15,850 — about $8 and $10 for a full-time employee. 

Leading the charge is Chuck Coughlin, a lobbyist and longtime Arizona political operative, known as Governor Brewer’s political attack dog. One insider called him “the real governor of Arizona.” 

Back in August, 2012, Coughlin and socialized medicine consultant Peter Burns were hired by a consortium of the state’s hospitals, insurers, and left-wing groups to lobby to expand Medicaid. 

Federal Health and Human Services Secretary Kathleen Sebelius also wants to expand Medicaid. Like most states, Arizona is currently operating under a Medicaid “waiver.”  In Arizona’s case, they match at a higher than normal rate, covering childless adults who make less than the FPL. Sebelius gave Brewer the choice of ending the waiver or expanding Medicaid under Obamacare. As Avik Roy put it,

Given this choice, Brewer went with the choice Sebelius favors: fleecing the taxpayers of other states. “For a state match of a little over $154 million in FY 2015,” Brewer’s office asserts, “the State can draw into its healthcare sector $1.6 billion in federal funds—a return on investment of more than 10-to-1.” Note Brewer’s abuse of the terms “investment” and “return,” given that what she’s really talking about is coercing out-of-state taxpayers to subsidize the previous mistakes that her state has made.

Rep. Warren Petersen of the 12th district said, “We passed a Proposition that we would cover childless adults” making less than FPL. “Right now we have 63,000 that are on the rolls, and [expansion proponents] are afraid that if we don’t expand, that the federal government will stop matching us on our current population at a match rate of 2 to 1.  First of all, we don’t think that’s true. We think they will continue to match.  But even if they won’t continue to match, we have never seriously contemplated kicking all of those people off. We have said that we will continue out of our General fund to pay for those people.”

The state is not allowing new childless adults into the program, Petersen added. “But we will allow everyone who’s currently on to stay on as long as they’re eligible.” Petersen says the program would be phased out in about four or five years at its natural attrition rate.

“They have resorted to desperate tactics,” said Petersen. They bused in 300 people for a rally, something you would see the Obama campaign do.  But for a Republican governor to bus in 300 people is a charade.”

Conservatives have said they will push for a referendum to stop the Medicaid expansion if it passes, Petersen said. “Already these lobbyists who are pushing for this massive drawdown of money, this $1.6 billion, they want to get their hands on this money. They’re already talking about the main people who collect signatures not to collect our signatures, so we could not refer this issue to the ballot.”

Tyler S. Boyer, a district chairman in the Arizona Republican Party, said of the double-dealing, “We’re witnessing an unfortunate display of moral ineptitude.”

Amendments that were quietly accepted prior to the debate occurring.” An amendment sponsored by Michelle Ugenti to support a license plate to fund scholarships for veterans had wide support, Boyer said. “It was rejected by this combination of nine wayward Republicans and the Democrats.”

“It looks like the governor had actually told these individuals to do this,” Boyer said.

“They have been promised by special interests that they will have their backs at the next election.  In other words; money.  It seems very corrupt to me” Petersen said.

It isn’t clear to observers whether Coughlin and Burns came up with the plan and presented it to Governor Brewer, or if she initiated the plan herself.  Boyer thinks Brewer’s advisers came up with the plan and convinced her to adopt it last fall.

“Here’s what’s really frustrating about Coughlin and a bunch of these groups,” Petersen said,

“They’re all saying that if we don’t do this kind of stuff, that we’re going to start losing,” Petersen said of the moderates in his party. “What we’re saying is that’s absolutely false. If we lose, it will be because we’ve become hypocrites. It will be because we said we were conservative, and then we weren’t.  And what, what you’re seeing here, is — Arizona, we didn’t lose. We’re not doing anything wrong. We took 55% of the vote for Romney, which means we can continue to do what we’re doing and keep winning. It’s you that are going to kill us, because you’re going to take us from conservative to moderate or, really, liberal at this point. And that’s when we’re going to lose, because people don’t like hypocrites.”

The grassroots are really trying to have a bigger influence on the Party in Arizona.

“That’s my goal,” Petersen said. “Because they’re always right. The PCs and the grassroots are always right. Why do we listen to the top? We should listen to the grassroots.”