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Arkansas breaks the code

Posted: August 27, 2014 at 5 a.m.

Gov. Mike Beebe got wound up Saturday night at the state Democratic Party’s Jefferson-Jackson Day Dinner.

His voice rising to a speech-ending flourish, he said he wanted his legacy to be that no longer would Arkansas say “thank God for Mississippi.”

Instead, he hoped, Arkansas would say to hell with Mississippi and Texas and all the rest, because we’re better.

Now I ask you: Could that possibly be true?

Let’s not scoff too quickly.

As it happened, someone had asked on Twitter the night before: “Has Arkansas broken the code?”

That would be the complex code for nothing less than expanding health insurance and making it more affordable.

And the answer: Yes, possibly.

Here’s what I put on Twitter on Friday night, and what I say again today: The private-option form of Medicaid expansion concocted in Arkansas threatens to be the most thoroughly successful public policy and government program—by idea and execution—that I’ve covered in 40 years.

It insures tens of thousands of needy people. It saves hospitals. It introduces conservative principles of consumerism and cost-sharing to a socially liberal policy. It essentially enriches the private insurance sector while remaking Medicaid into a smaller, more marginalized program. It seems clearly to work by the numbers.

It stands as a model for other Republican states to emulate. It conceivably could spread a third-way form of health care, neither traditionally liberal or conservative.

That’s all.

The only possible overstatement I see there is that other states aren’t as poor as Arkansas; thus they wouldn’t be lathering as much new business on their private health-insurance sector if they implemented a private-option form of expanded Medicaid. But, then, less poverty would seem to be a good thing.

You need to understand what had happened earlier Friday.

Somebody out-of-state happened to find online at the website of the Arkansas Insurance Department the proposed rates for 2015 for health-care exchange policies offered by Arkansas Blue Cross and Blue Shield, QualChoice of Arkansas, and Ambetter.

Those rates weren’t supposed to be generally distributed until October after federal approval. They won’t be official until that time.

They’d been uploaded by mistake. But by the time the Insurance Department took them down, reporter David Ramsey of the Arkansas Times, who has uncommon command of the private option and attendant issues, had seized and copied them for study.

By evening, he had devoured the data and made a blog post saying health-insurance premiums on the exchange in Arkansas in 2015 apparently would be a little lower—that’s lower—than in 2014.

Two years into Obamacare, health-insurance rates appeared headed downward at least in one state.

That does not entail employer-based group plans or individual plans outside the exchange. But on the exchange, it appeared—based on this early filing—that Ambetter’s rates would go down quite a bit and QualChoice’s would go up only a tad and that Blue Cross would keep its rates the same.

Why? It’s simple. The private option had used federal Medicaid expansion money to put 200,000 people into these private policies on the exchange. That’s new customers. And it had turned out these new customers were generally young and healthy and not abusers of the system.

It seems “poverty is not a disability,” as state Sen. David Sanders of Little Rock, a Republican private-option architect who has ridden herd on the implementation, likes to put it.

It’s important to note that these rates could change. Blue Cross seems especially irked about the inadvertent early release, probably because it would still like to negotiate for a bit of increase.

But that increase couldn’t be great or else Blue Cross would harm itself in a newly competitive market. At the worst, it seems, health-exchange premiums in Arkansas will generally hold the line next year.

Longer-term issues remain. The most extreme conservatives will continue to say the federal government can’t afford to send all this money. They’ll say the state can’t afford to begin picking up a small percentage of it after a couple of years.

But what threatens to bring lingering success to Arkansas is the likelihood that this newly enlarged market will stabilize. It’s even conceivable that premiums could continue downward as the state introduces new consumerist and cost-sharing principles.

It’s not out the question that other competitors would venture here for a piece of this business. That’s a lot of good-paying customers—good-paying because the government is doing the paying.

That was how Obamacare was designed to work—with early stresses and strains and then a better stability.

It’s conceivable that it’s actually how it will work in that one state Mike Beebe was beating his chest about Saturday evening.

John Brummett’s column appears regularly in the Arkansas Democrat-Gazette. Email him at jbrummett@arkansasonline.com. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.

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