Arizona lawmakers OK paying health plan's bills after stalemate

PHOENIX — State lawmakers finally approved funding the state’s Medicaid program needs to pay its current bills.

The 26-3 Senate vote Wednesday provides the full $3.36 billion the Arizona Health Care Cost Containment System told lawmakers months ago that it needed.

Until now half that funding was stuck in political posturing between the Republican-controlled Legislature and Democratic Gov. Katie Hobbs, leaving health plans unpaid for services provided — and potentially putting the state on the hook for thousands of dollars of legally mandated interest payments once bills are at least 30 days overdue.

The move still leaves unresolved nearly $200 million needed for K-12 funding for the state government budget year that ends June 30.

Universal vouchers

The schools issue is complicated by the fact the money is needed not for traditional public schools — state aid is decreasing because of lower enrollment — but because far more parents who already were paying to send their children to private and parochial schools are taking advantage of a new state law to have taxpayers pick up the tab.

Legislative budget staffers say the voucher program, formally known as Empowerment Scholarship Accounts, needs more than $274 million to account for the fact that voucher enrollment, originally projected to be 14,212, is projected to hit 56,912 this budget year.

The universal voucher program is something Hobbs is trying to kill going forward, much less continue to fund this year.

For the moment there is no resolution.

Senate GOP press aide Kim Quintero noted those additional education funds, unlike the appropriation for AHCCCS, are not immediately needed before the budget year ends June 30. She said Republican legislative leaders hope to work out the details as they negotiate a spending plan for the new budget year that begins July 1.

The governor would not comment Wednesday on the anticipated shortfall in education spending and the failure to resolve it immediately. Instead, in a prepared statement, she focused on the AHCCCS funding.

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“I am glad to see Republicans and Democrats come together to pass this critical bill that will keep millions of Arizonans insured,’’ Hobbs said. “The health and safety of Arizonans is not a partisan issue. And I hope we can continue to work together to deliver for our state.’’

Resolves one dispute

That rhetoric is far more conciliatory than statements two weeks ago.

Senate President Warren Petersen, R-Gilbert, said then that Hobbs could have resolved the shortfalls in current-year funding had she signed a $15 billion “skinny budget’’ for the coming year that GOP lawmakers sent to her in February. He said it included the needed supplemental cash while also guaranteeing the state will continue to operate beyond July 1 if there is no deal.

Petersen said “a wise governor’’ who didn’t like the skinny budget could have used her constitutional power of line-item veto to remove everything but the supplemental appropriations.

“Chalk it up to inexperience,’’ he said. “Her senseless veto means all at at risk.’’

Hobbs press aide Christian Slater clapped back, pointing out that AHCCCS is responsible for providing care for about 2.5 million state residents.

“Republicans are committed to holding health care for one-third of Arizonans hostage to score cheap political points,’’ Slater said then. He said there was no reason Senate Republicans could not immediately act in a bipartisan way, as they did in March when they approved the first half of the supplemental funds for AHCCCS.

Now, with passage of House Bill 2432, that dispute has been put to rest, but not the K-12 funding.