Panel urged to choose well on health plan

2 tell legislators Medicaid changes a benefit in end

Although Medicaid expansion and a payment overhaul will be “disruptive” to the way medical care works in Arkansas, the changes will benefit the state’s poor, its hospitals and its rural areas, the state surgeon general and the chief of the state’s medical school told lawmakers Tuesday.

Dr. Joe Thompson, the surgeon general, said the federal Patient Protection and Affordable Care Act has fundamentally shaken up health care, but that’s “notgood, not bad. Just disruptive.”

The key for the state is to embrace the good parts of the act and avoid its pitfalls, he told members of the House Public Health, Welfare and Labor Committee.

Legislators are weighing whether they want to expand the program for the state’s poor, elderly, disabled, low-income children and pregnant women by nearly 25 percent. About 780,000 Arkansans now receive Medicaid.

Under the expansion al-lowed by the Affordable Care Act, the federal government would pick up the entire tab until 2017. By 2020, the state would be responsible for 10 percent of the costs.

University of Arkansas for Medical Sciences Chancellor Dan Rahn said growth in uncompensated care - mostly for the uninsured - has strained the finances at the teaching and research hospital. Meanwhile, state dollars for the system have remained flat.

UAMS’ total bill for uncompensated care climbed to $203 million last year from $175 million the previous year, he said. “We’re really up against it. We’re operating at break-even right now,” Rahn said.

Expansion of the $5 billion Medicaid program by up to 250,000 people would have a “positive impact” on UAMS’ budget, dropping its costs of treating uninsured patients from $66 million to $38 million in 2014, Rahn said.

Public Health, Welfare and Labor Committee Chairman John Burris, a Harrison Republican, asked Thompson and Rahn why more attention hasn’t been paid to the private-market insurance component of the new health-care law.

The focus on Medicaid expansion has obscured the extra money to the state coming from slightly more affluent uninsured people buying health coverage, Burris said. Part of the health-care law mandates that people buy coverage, he said.

“It takes a week to snapout a study on Medicaid and how much money it’s going to save on expansion, but when I ask about the new number of private insured and what that means for hospitals, it’s always too hard to quantify,” Burris said.

Rahn and Thompson said they would work to provide better estimates on the private-market expansion under the law. Private insurers pay higher reimbursement rates than Medicaid or Medicare, Thompson said, but the law has equalized Medicaid and Medicare payments.

Thompson told Burris that a Rand Corp. study showing a net gain of $550 million to the state under expansion - along with saving 2,300 lives and creating 6,200 jobs - took months, not weeks, to complete.

And most of the benefits of expansion will help rural Arkansas, which has higher rates of uninsured people, he said.

Medicaid expansion, the in-state payment overhaul for Medicaid and private insurers and the health exchanges are interrelated and difficult to understand, Thompson said.

“All of these are a complex set of moving parts. Your decisions will have ripple effects. There will be no simple decision that you make that doesn’t have a cascade of effects across the health-care system,” Thompson said.

Northwest Arkansas, Pages 7 on 01/23/2013

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