PHOENIX—On Monday the Grand Canyon Institute, a centrist public policy think tank, released  a follow up to its September economic analysis of Medicaid expansion for Arizona that focused on economic growth and job creation.

This report uses the most current estimates and found that even if the federal government only pays at the 80 percent threshold of Gov. Brewer’s Medicaid expansion proposal, doubling the state’s cost, that the state’s General Fund costs will be just over half what they would be if the state refuses to expand Medicaid and instead continues its enrollment freeze for childless adults in an entirely state-funded program.

However, more significantly by covering 200,000 less people, Grand Canyon Institute Research Director Dave Wells noted that, “not expanding Medicaid will increase uncompensated health care costs by $150 million a year.  These are costs not covered by public or private charity and must be absorbed. This is a hidden tax on Arizona.”

The study looked at three scenarios for the first three full years of potential Medicaid expansion FY2015 through FY 2017:

1. The federal government fully funds Medicaid expansion
2. The federal government funds Medicaid expansion at Gov. Brewer’s lowest threshold, 80 percent.
3. The state does not expand Medicaid and instead continues its enrollment freeze for childless adults in an entirely state-funded program.

The three-year cost ranges from $500 million if the federal government fulfills its obligations to $1 billion if the state share rises to 20 percent.  However, a nearly $600 million assessment on hospitals proposed by Governor Jan Brewer, would mean a little to modest impact on the state’s General Fund.

By contrast, said Wells, “a state-only program for childless adults that continues an enrollment freeze costs the General Fund nearly $900 million, far more than expanding Medicaid.”

Former state senator and Vice Chair of the Institute, Carolyn Allen questioned those who oppose Medicaid expansion, asking, “How is it better public policy to provide health insurance to  200,000 less people, lose out on thousands of jobs, drain the state’s rainy day fund, take more money from the state’s General Fund, and still stick public and private health providers and private insurance will an added bill of $150 million?”

Allen continued, “Governor Brewer has made the right call here, and it’s time for my fellow Republicans to stop playing ideological games with Medicaid expansion, and do what’s best for the state’s long-term physical and fiscal health.”

Read the full report here.