Medicaid funding is expected to be a contentious topic when the 89th session of the Arkansas General Assembly convenes in Little Rock on Jan. 14.
Democrats and Republicans have very different views on the issue.
Democrats say Arkansas has a chance to expand Medicaid coverage to an additional 250,000 people, and the federal government will cover the majority of the cost.
Republicans say Arkansas already can’t pay its Medicaid bill; the proposed expansion would be funded with tax money from elsewhere in the country, which increases the federal debt; and the expansion would cost Arkansas hundreds of millions of dollars even with the infusion of federal funds.
For the first time since Reconstruction, Republicans hold a majority of seats in the Arkansas House and Senate, which sets the stage for an unpredictable legislative session.
Currently, Arkansas’ $5 billion Medicaid program covers about 780,000 poor, elderly and disabled residents, along with children from low-income families.
The Medicaid issue is two-pronged, involving a funding shortfall and the proposed expansion.
Arkansas faces a projected deficit of about $298 million in its Medicaid funding over the next two fiscal years.
For much of the recent recession, federal stimulus funds masked the problem, Andy Allison, the state’s Medicaid director, has said. Arkansas - like the rest of the country - received a temporarily elevated rate of federal financing for Medicaid.
Arkansas received $768 million in federal eco-nomic stimulus money for Medicaid from Oct. 1, 2008, to June 30, 2011, Thomas L. Carlisle, chief financial officer for the state’s Medicaid office, said in an e-mail.
For most of 2010, at the height of federal stimulus spending, Arkansas received an 81.18 percent match. But when the stimulus funds ran out, the match started dropping quickly, down to 71.37 percent in July 2011. The federal match is now 70.17 percent.
From 2000-08, the state’s match ranged between 73 percent and 77 percent, according to state Department of Human Services data.
The formula that determines the federal match is based on each state’s per-capita income and is measured against the per-capitaincome of the other states, Allison has said. The match rate changes annually.
Gov. Mike Beebe has recommended that the statecontribute $90 million in general-revenue funds and an additional one-time $70 million from the generalimprovement fund to reduce the expectedMedicaid shortfall to $138 million in 2014. Legislators will consider ways to reduce the remaining $138 million shortfall.
Sen.-elect Uvalde Lindsey, D-Fayetteville, believes that the shortfall in Medicaid funding can be remedied in the next session of the GeneralAssembly.
Lindsey said one way to address it is with co-payments from patients who don’t follow doctors’ orders after their initial consultations. If a patient doesn’t take his medicine and goes back to the doctor for a second visit related to that illness, he could be required to pay the doctor, said Lindsey. Currently, no co-payments are required for Medicaid patients, he said.
“We’ll come up with something that makes good sense, I think,” said Lindsey.
In general, Lindsey is predicting a “lively” legislative session.
“I hope the tenor is statesmanlike in the sense that we leave the rancor in the hallways,” he said.
IMPASSE POSSIBLE
Sen.-elect Bryan King, R-Green Forest, said Republicans and Democrats can work together, to a point, but any notion that the next legislative session will be one of genteel debate and agreement would require“rose-colored glasses.”
King said the majority of Arkansans are against the plan to expand Medicaid coverage.
Even though the federal government has promised to pay for the expansion for three years, King said, the plan is “very unpopular.”
King said he wouldn’t trust the federal government to keep its promise.
“How can you depend on them to fund a program if they’re talking about a fiscal cliff?” he said, referring to tax increases and spending cuts set to take effect Tuesday if Congress and President Barack Obama can’t agree on a deal to avoid them.
Sen.-elect Jon Woods, RSpringdale, said there aren’tenough lawmakers on board with the expansion for it to pass in either the House or the Senate.
“The expansion is just kind of out of the question,”Woods said.
An appropriation measure funding the Medicaid expansion requires a threefourths vote of the Legislature (at least 75 votes in the 100-member House and at least 27 votes in the 35-member Senate). Neither party has enough seats in either chamber to make a decision alone.
LEGISLATIVE CHANGE
The Nov. 6 general election profoundly changed the makeup of the state Legislature.
In the House, Republicans hold 51 of 100 seats, Democrats hold 48, and there is one representative from the Green Party. That’s an increase of five seats for the Republicans.
In the Senate, Republicans hold 21 seats and Democrats hold 14. That’s an increase of six seats for the Republicans.
Lindsey, King and Woods all served in the House of Representatives before becoming senators this year. Lindsey served for four years in the House. King and Woods each served for six.
Lindsey represents District 4, a primarily urban district that is within Washington County and includes the Democratic stronghold of Fayetteville.
King represents District 5, a primarily rural district stretching from Missouri to Oklahoma. District 5 includes all of Madison County and parts of Carroll, Crawford, Franklin, Johnson and Washington counties. Woods represents District 7, which includes Springdale, Johnson, Tontitown, Elkins, Goshen and part of east Fayetteville.
The 2010 Patient Protection and Affordable Care Act, championed by Obama, allows states to decide ifthey want to offer Medicaid coverage to people with incomes of up to 138 percent of the federal poverty level, about $15,400 for an individual.
The federal government has promised to pick up the entire tab for expansion of Medicaid until 2017. The federal government would pay Arkansas about $900 million extra per year for the next three years. By 2020, the state would be responsible for 10 percent of the cost of the expansion.
Lindsey said the issue must be looked at over the long term. Although the “enhancement” of Medicaid to cover more Arkansans for the next three years would at first fall to the federal government, it would cost the state about $700 million between 2014-21, he said.About half of that amount would be made up, however, because many people who receive uncompensated hospital treatment would be covered by Medicaid under the expansion. So hospitals in Arkansas would be paid by Medicaid for some of the free care they now provide.
“They would bill Medicaid for it instead of writing it off,” said Lindsey. “It could save rural hospitals in the state, save them from closing.”
Lindsey said it wouldn’t be fair to extend Medicaid coverage to an additional 250,000 Arkansans for three years, then take that coverage away.
“The process of government is to take care of those who can’t take care of themselves,” said Lindsey. “That’s kids and old folks, and those are the primary recipients of this Medicaid enhancement.”
Woods said he’s all for helping the needy but not for spending money the state doesn’t have.
“Everybody knows we need to help those that need help,” said Woods. “But the people that understand budgeting know you don’t spend more money than you have coming in. If we’re having trouble paying this shortfall, it’s really hard to make the argument to increase it to another 250,000 people. We just can’t afford it.”
Northwest Arkansas, Pages 11 on 12/30/2012