Proposition 204

Background Information

Proposition 204

 

·         In 1998, the attorneys general of 46 states, including Arizona, agreed to settle a lawsuit they had filed against the manufacturers of tobacco products. As a result, the tobacco manufacturers must pay each of those states a portion of the estimated $206 billion settlement each year over the next 25 years.

·         Arizona's share is estimated to total approximately $3.2 billion. Payments are subject to annual adjustments for inflation. The settlement also includes a provision to reduce payments if the volume of cigarettes sold in the United States falls. The settlement agreement allows each state to determine how it will spend its share of the settlement.

·         Proposition 204, approved by voters in the November 2000 election, required Arizona to deposit all of the money it receives over the next 25 years from the tobacco litigation settlement in the "Arizona Tobacco Litigation settlement fund." Money in the fund would be used to increase the number of people who are eligible for coverage in the Arizona Health Care Cost Containment System (AHCCCS).

·         Approved by voters in the November 2000 election, Proposition 204 expanded eligibility for AHCCCS for persons who are uninsured and have annual incomes less than 100% of the federal Poverty Level (FPL). The provision also included, “as long as funds are available”.

 

·         With the budget deficit, in January, 2011 the State House and Senate approved a bill authorizing Gov. Jan Brewer to ask the federal government for permission to drop 280,000 adult patients from the state’s Medicaid program.

·         On March 15, 2011 Governor Brewer introduced a new reform plan that eliminates Medicaid coverage for childless adults, grandfathering-in only existing enrollees. With attrition, the provision shrank the state’s AHCCCS rolls. Additionally, the plan included provisions modeled after those common in private insurance, including enhanced co-payments and wellness programs to encourage personal responsibility.

·         To date, childless adult enrollment has dropped by 141,000 people, from 227,000 to 86,000. It is estimated that by January 2014, only 50,000 childless adults will remain enrolled.