Gov. Janet Napolitano's proposal to expand government-run children's health insurance could bring high financial costs, according to the Goldwater Institute.
Napolitano said Monday she wants to extend health coverage to uninsured children whose parents make less than $60,000 per year. Current rules have that threshold at about $40,000 a year in family income. The governor said in her State of the State speech there are 100,000 uninsured children in the state eligible, but not enrolled, in government health care programs. Schools should be able to market such programs, but currently are prohibited from doing so, she said.
Offering health insurance to the uninsured is politically popular, but could come with a hefty price tag. Previous expansions of the Arizona Health Care Cost Containment System and KidsCare indigent medical insurance programs have resulted in major budget increases. The governor's office will unveil its budget plans later this week.
The Goldwater Institute think tank estimates adding 100,000 kids to AHCCCS rolls could increase spending from $5.5 billion to $7 billion over the next few years. Goldwater points out that past expansions of AHCCCS and KidsCare coupled with inflation resulted in a $1 billion increase in spending between 2001 and 2003 and another $900 million jump between 2003 and 2005.
As for the latest proposed expansion, one possibility under discussion is new revenue from a voter approved tax increase on tobacco.
The governor defended her proposal in the address before the Arizona Legislature saying it will help uninsured children get medical attention including preventative care.
Fiscal conservatives also expect the governor to push for further expansion of the state health programs in future years to cover uninsured adults and move thresholds higher.
Her State of the State address also touched on bonding for roads, a greater focus on science and math and schools and innovation for the economy, but some of those plans lacked specifics and dollar figures.
"I was a little surprised at the lack of focus. Many issues were raised, few specifics were given. That's not atypical of such events, but I can't say that I heard a vision for Arizona spelled out in any way," said state Sen., Jim Waring, R-Phoenix.
The Democratic governor also called for more aggressive business attraction efforts and more investment and promotion of the state's fledgling biotechnology sector. She also wants to create more incentives and aggressive policy at the Arizona Department of Commerce.
Those proposals face skepticism from business and conservative advocates who favor tax cuts to what they see as corporate welfare.
"There were no bold initiatives in the governor's speech, and of course, oftentimes that's a good thing," said Steve Voeller, president of the Arizona Free Enterprise Club.
"When it comes to economic development, it would be nice if the governor had faith in the private sector. It would have been better to highlight the tax relief she signed last year, and call for more, rather than proposing to reinvigorate the Department of Commerce," said Voeller, who contends its low tax rates and limited business regulation that attracts jobs.