Arizona Medicaid fees loom for smokers, obese

NEW YORK (CNNMoney) -- The governor of Arizona has proposed a novel way of helping to pay burgeoning Medicaid costs -- imposing a fee on smokers, diabetics and obese people who receive the state aid.

The proposal from Gov. Jan Brewer, which would take effect in October, imposes "penalty and incentive strategies" on Medicaid members "to take responsibility for their own health care," according to a statement from the governor's office.

The "strategies" include an annual fee of $50 on childless adults who smoke. Medicaid recipients who are obese or diabetic would face similar penalties if they don't get into shape.

"Childless adults who are obese and/or suffer from a chronic disease, such as diabetes, will need to work with their primary care physician to develop a care plan," the document said.

Matthew Benson, spokesman for the governor, said this proposal is part of a wider plan to save $510 million for the state. He said the proposal has been submitted to the federal government for review, a months-long process.

Benson said parts of the plan will also require approval from state legislators.

Many states have been hard hit covering their Medicaid costs as federal funding has dried up. The federal government is matching every dollar of state funding for Medicaid with $1.61 in federal funding. That's down from $2.68 in federal funding in 2010.

The state's current Medicaid plan expires on Sept. 30.