Under an Arizona Plan, Smokers and the Obese Would Pay Medicaid Fee

Published: May 30, 2011 - New York Times

Arizona, like many other states, says it is no longer able to finance its Medicaid program adequately. As part of a plan to cut costs, the state has proposed imposing a $50 fee on childless adults on Medicaid who are either obese or who smoke. In Arizona, almost half of all Medicaid recipients smoke; while the number of obese people is unclear, about one in four Arizonans is overweight, according to the Centers for Disease Control and Prevention. The state’s plan must ultimately be approved by the federal government. Monica Coury, spokeswoman for Arizona’s Medicaid program, discusses.

Q. What is the current status of the state’s Medicaid program?

A. In Arizona, there has been an increase of 30 percent in the number of people on Medicaid and a 34 percent decrease in general fund revenue since 2007. We are one of just a few states that cover childless adults in Medicaid. We want to change the nature of eligibility for that program from an open-ended entitlement program to one that the state manages based on available funding, which means we can freeze the program and then open the program back up for enrollment should we come into additional funds. But that is just one of the things we are seeking to do. We also want to reform the payment system for Medicaid. Currently, Medicaid is structured such that we are a purchaser of ‘widgets,’ if you will. So, providers are incentivized to do more — since they get paid for quantity. There is no financial incentive for a provider to reduce the number of hospital admissions, for instance, because that drives down the bottom line. We want Medicaid to move away from that concept to one that supports and financially rewards health plans and providers for supporting quality.

Q. Why is it a good idea to charge people a fee for being overweight or for smoking?

A. The issue is this: we can’t keep complaining about the rising cost of health care and not drill down to what that means on the individual level. Maricopa County [where Phoenix is located] has started a program among its employees where smokers have to pay $450 more for health insurance than nonsmokers. They take a swab to detect nicotine. The bottom line is that there’s plenty of evidence and studies that show there is an undeniable link between smoking and obesity and health care costs.

Q. What has been the response from critics?

A. Some people have suggested it is discriminating against obese people. To me, it is a matter of fairness. We have an obligation to provide health care coverage to 1.35 million people. And we’ve got a budget crisis, so if there’s something you can do to help out — we’re just asking you to put a little more back into the system. What we want to test is whether making people pay is going to affect behavior. We think it will.

Q. How would disabled people be affected?

A. We’re not talking about the disabled, the elderly, pregnant women or children, and certainly there would be exceptions for certain conditions, like cancer. We are talking only about able-bodied people who have the capacity to manage their weight.

Q. How did you arrive at the amount of $50? Would that be sufficient to offset the fund’s costs?

A. We’ve talked about $50 once a year. We haven’t done the math, but it’s not about how much we would collect. It is totally about testing the efficacy of this strategy. Obesity is costing us billions in health care costs, so our thought is, Let’s test some of these strategies.