Goldwater Institute: More Spending on AHCCS, with No End or Results in Sight

By Byron Schlomach, Ph.D.

From 2000 to 2008, spending by the Arizona Health Care Cost Containment System (Arizona's state-funded health program for low-income families, AHCCCS) is expected to nearly triple. For all that spending, you'd think we'd have made some progress in increasing the percentage of Arizonans with health insurance. The graph below is evidence to the contrary.

The percentage of all Arizonans without health insurance actually increased from 16 percent in 2000 to 20.9 percent in 2006 (the latest data available). Since 2000, the uninsured rate has risen by 31 percent. This happened during a period of rapid budget increases for AHCCCS.

To be fair, Arizona's population rose steadily over the seven years illustrated in the graph. Inflation pushed up costs, too. But General Fund spending on AHCCCS as shown in the graph is adjusted for population (per capita) and for inflation ("real," 2006 dollars). Nevertheless, even this heavily adjusted spending measure showed an increase of 46 percent from 2000 to 2006.

Advocates for government health spending have made health insurance coverage their measure of success, but with numbers like these, it's better characterized as a measure of failure. After all, 49 percent of Arizona's adults with incomes under the federal poverty level are uninsured, despite being eligible for the open-ended Medicaid program.

Policymakers should make health insurance more affordable at the state level by eliminating coverage mandates and letting people buy insurance across state lines. But, increased government health spending isn't translating into fewer uninsured people.

Dr. Byron Schlomach is the Director of the Center for Economic Prosperity at the Goldwater Institute.