Fiscal Session Tests Leadership

Wednesday, February 12, 2014

Leadership skills in both the Legislature and the governor’s office will be thoroughly tested in the next few weeks.

The Legislature convened Monday in a fiscal session for just the third time ever with one issue dominating the agenda - the continued funding for Arkansas’ unique private option insurance program.

The best guess on the outcome right now is that they will find the votes to appropriate the money.

Otherwise, the session could devolve into a messy budget battle at a time when most lawmakers would prefer to get the work done and go back home.

The private option was crafted last year by Republican legislative leaders, working with Gov. Mike Beebe, a Democrat, as a way for Arkansas to extend Medicaid for low-income residents previously not eligible.

They became eligible because of the federal Affordable Care Act, better known as Obamacare.

Arkansas sought federal approval to replace direct expansion of Medicaid rolls with a plan for the state to use federal Medicaid dollars to buy private insurance for the newly eligible, who include those who earn up to 138 percent of the federal poverty level.

That’s $15,860 for an individual, $32,500 for a family of four.

These are hard-working Arkansans, some of whom couldn’t have gotten insurance at any price because of pre-existing conditions until Obamacare removed that obstacle. Mostly, they just didn’t earn enough to meet their families’ basic needs, like food and shelter, and buy insurance.

Under this program, they can sign up through the state’s insurance exchange and part or all of their premiums may be paid with Medicaid money earmarked for Arkansas.

About 87,000 of the state’s poorer residents have enrolled for the private option insurance, which is now at risk. The program will not continue past July 1, the start of Arkansas’ new fiscal year, unless lawmakers appropriate the available federal dollars for it.

This is serious business for these individuals and their families, of course.

If lawmakers don’t vote to fund the program, they again will be without insurance.

But the significance of the vote for or against the private option’s continuation reaches well beyond them.

The most obvious impact is on the state’s hospitals, which will again be caring for more patients who can’t afford to pay and won’t have this insurance to pay the bills for them.

There’s still more to consider.

Gov. Beebe has submitted a $5 billion state budget that depends in part on continuation of the private option and the state’s receipt of the additional federal money. If there is no private option, he has said, the state will effectively lose $89 million in Medicaid-related savings.

It is a hole that would wreck the planned budget and require considerable adjustment elsewhere in the state’s spending plan.

The most likely target for counter-balancing cuts would be higher education, which would probably in turn bring higher tuition at the state’s colleges and universities.

Additional beds in the state’s prisons, needed to reduce pressure on the county jails that are holding backed-up state prisoners, might also be impacted.

Really, any part of that $5 billion budget could be cut back, were the Legislature unwilling to authorize the use of these federal dollars to buy private-option insurance.

That means the Legislature, which is supposed to be in a short fiscal session, could instead be snarled in an extended budget battle.

That depends on whether Beebe and the legislative leaders can persuade enough lawmakers - 27 of the 35 senators and 75 of the 100 House members - to vote again to fund the private option.

The program won approval last year on the slimmest of margins. Going into this session, at least two fewer senators were being counted against the private option. And that, if all the rest vote as they did before, is enough to kill the appropriation.

The fact that political primaries are just around the corner is coloring some lawmakers’ thinking, particularly those Republicans who believe this vote will guarantee them an opponent.

The Republican leadership in the Legislature, along with others in the membership, must convince those who are wavering that this vote should be about policy, not politics.

Meanwhile, the term-limited Beebe has something of a lame duck status in this session, which could be the last he works as governor. He must nevertheless find a way to get lawmakers to accept his budget with the private option intact.

BRENDA BLAGG IS A FREELANCE COLUMNIST AND LONGTIME JOURNALIST IN NORTHWEST ARKANSAS.

Opinion, Pages 5 on 02/12/2014