Arizona officials consider next steps after high court’s health care ruling

WASHINGTON — Arizona officials were sifting through last week’s Supreme Court’s decision upholding the bulk of the national healthcare reform act and deciding what steps, if any, to take next.

Arizona, like many states, has been moving forward with plans to set up a health insurance exchange, a sort of marketplace for insurance consumers that is required under the act.

Even though Gov. Jan Brewer criticized the “disheartening” ruling Thursday, state officials were not ready to back away from the exchange. Or to embrace it.

“The governor will make a final decision … after we’ve had a chance to review the decision and evaluate where we are on the exchange work,” said Don Hughes, director of the Arizona Health Insurance Exchange.

If states are not making progress on their exchanges by 2013, the federal government could step in and run the exchange itself, a prospect that many find unpalatable.

“A state-based health insurance exchange is much preferable to having the federal government design one for Arizona,” said Garrick Taylor, spokesman for the Arizona Chamber of Commerce, which opposes the act.

“It gives Arizona flexibility and ability to craft an exchange that fits Arizona needs,” Taylor said of the prospect of a state-run exchange.

Arizona insurance companies also said they will help state officials create an exchange. Blue Cross Blue Shield of Arizona released a statement saying it “will work with state lawmakers to enact a state-based insurance exchange.”

The deadline for the exchange is one of several in the act, which was “largely unscathed” by the court, in the words of Justice Ruth Bader Ginsburg.

Besides the exchanges, the act calls on states to expand their Medicaid eligibility and it imposes a national “individual mandate,” which requires the people have health insurance by 2014 or pay a penalty.

It is “too early to tell” if Arizona will participate in Medicaid expansion, said Taryn Morrissey, a public policy professor at American University.

“Republicans have vowed to introduce legislation to repeal the entire act,” Morrissey said. “They haven’t really provided an alternative but I’m sure in this election year there will be continued talk about it.”

The court Thursday rejected a part of the law that would have let the federal government strip Medicaid funding from states that did not expand the program – a part of the act that Chief Justice John Roberts called “a gun to the head” for states. In Arizona, for example, more than half of the staet’s federal funding went to Medicaid in 2009, according to U.S. Census data.

Instead, Medicaid expansion can continue as a state option with the enticement of what the court called unusually generous federal funding. Many experts speculate the lure of federal funds will get most states to participate.

“There may political reasons why they don’t,” Morrissey said. “But the Medicaid expansion comes along with a lot of federal funds. It would be economically rational … to participate in the expansion.”

Morrisey said other issues may entice states to expand Medicaid, since not participating in the expansion could lead to a lack of coverage for some people. Those who neither fall below the poverty line nor meet the requirement to receive subsidies toward health insurance could fall into an assistance “gap.”

“There could be a gap between people,” Morrissey said. “Falling through the cracks so to speak.”

Rep. Raul Grijalva, D-Tucson, who rallied in support of the act in front of the Supreme Court Thursday, said it would be in Arizona’s interest to expand Medicaid coverage under the law.

“By opting in, states will receive additional support, but more importantly, you’re going to expand the base of coverage,” Grijalva said. “And that’s the whole point of this Affordable Care Act.”

But while some state officials said they wanted to study the opinion, many more were angry at the court’s decision.

Brewer said in a prepared statement Thursday that the act was “an overreaching and unaffordable assault on states’ rights and individual liberty.”

The Goldwater Institute said it will move ahead with its lawsuit against a price-setting panel, set up by the health care law. That suit had been on hold pending the court’s decision.

Many Arizona Republicans, including Rep. Jeff Flake, R-Mesa, called for a congressional repeal of the act. Health care reform “will not only decrease the quality of healthcare in this country, but it will place an enormous burden on the economy,” Flake said in a statement.

Rep. David Schweikert, R-Scottsdale, went further, calling the act the “single most economically devastating government mandate our country has ever seen.”

“If the Supreme Court will not repeal this job-killing, tax-hiking mandate, then I will fight until every ounce of Obamacare is repealed and replaced,” he said in a statement Thursday.