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AHCCCS and Medicaid To Be Cut in Arizona: The Cupboard is Bare.

By Joseph McDaniel, Esq.

Everybody wants a free lunch, and that includes me.

If somebody is handing out a free, jewel-encrusted pony I can take home to the kids, I'm there!

But I've decided that there's no such thing as a free lunch; somebody is going to pay, and if you're reading this, the chances are that you've been a payor!

Now, AHCCCS was plugged into it's present size and shape by a Legislative Initiative, which amounts to folks voting to give away a bunch of free health care to a bunch of people.

But times change, and tax bases shrink, so the cupboard in Arizona is now bare. And AHCCCS is about to get shrunk ("Honey, I shrunk the AHCCCS!").

There are a couple of ways to deal with that problem: we can ignore it, which is the usual politician response.

Or we can cut back on the amount of free stuff we give away (note: when a State or a Country gives money or services to somebody, it first has to take it away from somebody else. This is an immutable economic law. There is no such thing as a free lunch).

Many people will be sad when Medicaid is cut back.

On the other hand, Arizona may not need to file a bankruptcy, like California and Illinois.

Because either somebody makes a decision to spend less, or States run out of money, because they can't print money like the Federal Government.

And even if there were federal bailouts for States in the wings, which there are not, I don't think Arizona would get them.

Not sure why; just a guess.

p.s. States all have a choice; they can follow the lead of Arizona and Wisconsin or they can give up and admit that they're scared to cut back on giveaways and then they can play bankruptcy for States! Or they could briefly fix their woes by raising taxes by 66% as the Illinois lawmakers recently did, but that just makes people who make money get the heck out of Dodge. Or Chicago. Close enough.

Full post as published by Arizona Bankruptcy Attorney Blog on February 17, 2011 (boomark / email).