Arizona Passes Legislation To Continue Receiving Federal Funding From Health Reform, Despite Claiming It’s Unconstitutional

Arizona Gov. Jan Brewer (R)

Arizona Gov. Jan Brewer (R)

Last month, the Arizona legislature eliminated funding for KidsCare, the state health program covering 38,000 children of the working poor, to help close the state’s $5 billion budget gap. By ending the program, the state forfeited billions of dollars in federal matching funds and left uninsured children with few health care options.

But the new health care law — which Arizona is challenging in court — has led them to re-think this decision. The law requires states that want to continue receiving federal health care funds to maintain eligibility in Medicaid and CHIP. And so yesterday, as the legislative session came to a close, the Republican controlled legislature did a do-over and restored state funding to the program so that it can benefit from the increased federal funds under health reform. East Valley Tribune explains:

What happened in the interim, though, was President Obama signed new health care legislation. That law eventually will provide extra cash to help Arizona with health care costs. But that law also says states must maintain their health care programs as they were the day he signed the bill, not only to get future increases but even to maintain existing federal aid. Legislative budget staffers pegged the loss at $7.8 billion a year.

Arizona is trying to preserve the federal dollars from the very health care reform it thinks is unconstitutional. Gov. Jan Brewer (R-AZ), in fact, “urged legislators to restore the programs” and plans on signing the legislation into law, proving once and for all that the money states will receive under reform will trump any ideological repeal effort.

As Emma Sandoe explains in this report, states that choose to opt out of the Medicaid expansion will lose billions of dollars in federal funding and will be no closer to grappling with the strained public health programs in their states.