Starting Monday, Arkansas’ Legislature convenes for its third-ever fiscal session with widespread uncertainty among lawmakers about whether it will reauthorize the use of federal Medicaid dollars to purchase private health insurance for about 100,000 poor Arkansans in the fiscal year starting July 1.
Neither proponents nor opponents of what’s called the private option are ready to declare victory.
The chiefs of the state’s four-year universities have been advised that tuition increases could be needed to replace state cuts if the Legislature fails to reauthorize the funding, while foes of the private option dismiss such warnings.
Last year, the Republican-controlled Legislature narrowly authorized the use of the federal money, available under the federal Patient Protection and Affordable Care Act that President Barack Obama signed into law in 2010.
The expansion of the Medicaid program extended eligibility to adults with incomes up to 138 percent of the poverty level - $15,860 for an individual or $32,500 for a family of four. Under Arkansas’ private option, most recipients can sign up for private plans on the state’s health-insurance exchange and have the premiums paid by Medicaid dollars.
The funding reauthorization for fiscal 2015 was thrown into doubt by last month’s election of state Sen. John Cooper, R-Jonesboro, who opposes the measure,and a subsequent announcement by state Sen. Missy Irvin, R-Mountain Home, who voted to fund the program last year, that she won’t support the funding again. Supporters of the program are scrambling to persuade at least one senator who voted against funding the program last year to vote to fund it.
Twenty-seven votes are needed in the 35-member Senate to approve the appropriation measure authorizing the use of $915 million in federal funds for the private option in fiscal 2015. Last year, private-option funding cleared the Senate with 28 votes.
Seventy-five votes are required for approval in the 100-member House of Representatives, which approved the funding last year with 77 votes.
Senate President Pro Tempore Michael Lamoureux, R-Russellville, said Friday that he’s still “about one vote” shy of securing the 27 required votes.
“We do not have a clear path to that vote from where we are now,” he said.
Lamoureux said he hopes “a more clear path to success can be established” in the fiscal session.
“I am optimistic that we will [continue the program] because the results are so bad if we don’t,” he said.
Failure will inflict “substantial harm” to Democratic Gov. Mike Beebe’s proposed $5 billion general revenue budget - which would raise spending by $105.8 million - and would lead to an accompanying “legislative fight” about where to make cuts, Lamoureux said. Beebe’s proposed budget would boost state spending for the public schools, prisons and human services programs.
Beebe, a self-described micromanager of the state budget, has repeatedly warned that the Legislature would have to cut about $89 million out of his proposed general revenue budget if it fails to reauthorize the use of federal funds for the private option.He said his proposed budget factors in saving that much money from the federally financed private option; he also said he doubts the Legislature would repeal tax cuts that it enacted last year that are projected to reduce state general revenue by about $85 million in fiscal 2015.
Nearly two weeks ago, he told the Political Animals Club that the state’s higher education institutions “inevitably get killed every time you start cutting budgets” and that the University of Arkansas for Medical Sciences will “get killed” through the loss of $28 million if the Legislature fails to authorize continued funding for the private option.
But Cooper, who was elected to fill a vacancy created by the Aug. 20 resignation of private-option supporter and Jonesboro Democrat Paul Bookout, said Friday that he doesn’t “buy” into Beebe’s warnings.
“That is scare tactics,” he said. “That started back in the campaign [for his Senate seat in Craighead County] and that was a political ploy. I am not looking to cut [Arkansas State University’s] budget, and I don’t know that anyone else is.”
ASU System President Charles Welch on Friday distributed a page of “higher education talking points” about private-option funding to the chiefs of the state’s other four year universities warning that rejecting “the private option will result in nearly $90 million of state budget cuts, and higher education will be the most impacted.”
“Because of the state’s obligation to K-12 adequacy funding, the shortfall in the Medicaid program and the growing prison population, funding cuts will be at the considerable expense of colleges,” according to the talking points, which Welch wrote higher education officials “may use when talking with legislators.”
In addition, “tuition increases would replace lost state funding, shifting more financial burden to students and their parents,” according to the talking points, obtained by the Arkansas Democrat-Gazette under the Arkansas Freedom of Information Act.
ASU System spokesman Jeff Hankins said Friday that he wrote the talking points with the help of other higher education officials.
Beebe’s proposal already reduces the general-revenue budgets of the state’s four year universities by $3.9 million to $588.1 million.
It would boost the general-revenue budgets of the University of Arkansas at Fayetteville by $1.1 million to $120.9 million, of ASU by $531,104 to $59 million and of the University of Central Arkansas by $467,527 to $53.1 million, but it would slash UAMS’ general-revenue budget by $7.6 million to $86.4 million. State officials have said UAMS is expected to make up that money because it will be providing services to fewer uninsured patients as a result of the federal health-care law.
Private-option opponent state Sen. Bryan King, R-Green Forest, on Friday night dismissed the talking points distributed by Welch.
“To go to this level of rhetoric is wrong,” he said. “I get tired of the universities and Beebe acting like state institutions shouldn’t be tightening their belts.”
Richard Weiss, director of the state Department of Finance and Administration, said earlier Friday that department officials have not prepared figures for Beebe regarding possible cuts in his proposed budget.
Beebe said Thursday that he’s not prepared to detail where he would cut his proposed budget if the private-option funding isn’t reauthorized.
“There is not going to be one Plan B, because what you are going to have is $85 million or $86 million that will have to be found somewhere, and you are going to have 135 members of the General Assembly plus me, and so you could have 136 ideas about who to cut and how much to cut them,” he said.
“Some people want to cut prisons. Some people want to cut colleges. Some people want to cut something else,” Beebe said.
He said it’s premature to be proposing an alternative budget in case the private-option funding isn’t reauthorized because, “No. 1, you don’t have to do it yet and No. 2, you got to have input from all those folks to figure out if we are going to be here until forever trying to see if there is a consensus.”
Legislative foes of the private option have yet to provide details about where they would cut Beebe’s proposed budget.
Under the Arkansas Constitution, the Legislature may meet in a fiscal session for up to 30 days and a three-fourths vote of the House and Senate is required to extend it by up to 15 days.
House Speaker Davy Carter, R-Cabot, said his office “isn’t working on a secondary budget” in case the Legislature kills the private option.
“I really don’t like to think about the scenarios if we don’t,” he said.
“I really do think we’ll pass it, and I think we’ll do it hopefully sooner rather than later and I am putting the stick in the ground for three weeks [of a fiscal session],” Carter said. “That’s the target.”
He said the Legislature shouldn’t wait until after the filing period for state and federal offices, which runs from Feb. 24-March 3, to vote on funding for the private option.
“Of all the factors that go into the decision-making there should be no weight given to that. That is not material to the voting decision,” said Carter, who decided last year not to run for governor this year.
Lamoureux said it doesn’t matter to him whether the Senate considers the legislation funding the private option before or after the filing period.
King said he’s not sure whether the Senate will authorize funding for the private option.
“I’d say it could happen or something could happen,” he said. “Honestly, we are in the worst position because we got a bunch of people signed up. They gave these people benefits on money that the federal government doesn’t have because we are running up a deficit.”
Front Section, Pages 1 on 02/09/2014