Proposal bars use of funds for sign-ups

Plan would cut outreach to promote private option

A divided legislative panel Wednesday endorsed a proposal to bar three state agencies from using funds to encourage enrollment in the state’s fledgling program that uses federal funds to purchase private health insurance for poor Arkansans.

The state Department of Human Services, Insurance Department and Department of Health also would be prohibited from seeking federal grants, contracts and spending to advertise or promote enrollment in the “private option” program as well as in the insurance exchange.

On a day when the state House of Representatives approved a bill to grant a 1 percent cost-of-living raise to the state’s constitutional officers, judges and prosecutors in the fiscal year starting July 1, it was the private option that consumed most of the lawmakers’ time.

In a voice vote, the Joint Budget Committee’s Special Language Subcommittee endorsed adding this proposal by Rep. Nate Bell, R-Mena, to appropriation bills for these agencies after a few Democrats voiced their objections. The bills are Senate Bill 111 and House Bills 1053, 1130 and 1150.

The subcommittee later endorsed a proposal by Rep. John Burris, R-Harrison, who is an architect of the private-option program, to end the program if the federal government doesn’t approve three waivers by Jan. 1 that the state Department of Human Services is required to seek under the bill.

The subcommittee added Burris’ proposal to House Bill 1150 - the appropriation for the Department of Human Services’ Medical Services Division.

Burris would require the Department of Human Services to obtain federal waivers allowing the state to provide limited nonemergency transportation for enrollees; enabling certain people to enroll in health savings accounts and requiring co-pays or other charges for certain private-option participants.

These proposals are acceptable to Democratic Gov. Mike Beebe except for “the Jan. 1 basically poison pill date,” said Beebe spokesman Matt DeCample.

Beebe “worries that [deadline] pretty much abdicates the entire future of the private option to the feds and bases it on whether or not those waivers occur, so discussions about that portion are continuing,” he said.

The expansion of the Medicaid program extends 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 federal Medicaid dollars.

Nearly 100,000 Arkansans have enrolled in the expanded Medicaid program, according to the state Department of Human Services.

If the Republican-controlled Legislature doesn’t reauthorize the use of federal funds for the private-option program, Beebe has repeatedly warned that there would be a hole of about $89 million in his proposed $5 billion budget for fiscal 2015 because the federally financed private option helps the state save about that much money. Beebe, who proposed increasing spending by $105 million over fiscal 2014, has warned that his proposed budgets for the state’s prisons and higher education institutions could face cuts if the private option ends. Private-option foes have accused Beebe of using “scare tactics.” Beebe has countered that he’s just providing facts.

The appropriation measures will require 75 votes in the 100-member House, which narrowly authorized funding for the private option last year with 77 votes. The measures also require 27 votes in the 35-member Senate, which narrowly approved funding for the program last year with 28 votes. Joint Budget Committee Co-Chairman Sen. Larry Teague, D-Nashville, said supporters of the private option still lack the 28 votes in the Senate to continue funding for the program in fiscal 2015.

Bell, who voted against funding the private option last year, told the Special Language Subcommittee that the votes “are almost certainly there” for the Legislature to eliminate funding for the private option. He said the votes also “are almost certainly not there” to pass a budget bill for the state Medical Services Division without the private-option funding.

“That’s an impasse folks,” he said. “Do we want to become D.C.?”

“We have an opportunity here for people of good will to say … we want to keep the promise that we made to our fellow citizens in the state and to give them an alternative path,” Bell said.

“But at the same time we recognize that the situation in Washington [D.C.] is unstable. That is changing daily and that it is prudent not to get any further into this thing until some of that is a little better resolved,” he said.

Bell said his proposal “allows us to come back in the 2015 session and from my point of view be able to find a path away from this policy that makes sense.”

The Legislature is considering authorizing $915 million in federal funds for the private option in fiscal 2015, but Bell said the total funds expended on the program will be slightly below half that amount if enrollment in the program remains at or near current enrollment levels.

Afterward, House Speaker Davy Carter, R-Cabot, said he wants the House to pass a version of the private-option funding bill this week and “put the ball in the Senate’s court.”

“I’ve got some pretty strong allies in the Senate, but I think the nine no votes are still no votes,” Carter said.

“It’s my intention for the House to pass a bill and send it to the Senate. And if we want nine people to shut down the government, then it’s up to those nine people in the Senate to live with that.”

Carter said he isn’t sure which private-option measure will clear the Joint Budget Committee meeting today.

“It’s like a bracket. It’s going to be somewhere between where we started and the amendment [Wednesday], something between those two versions,” he said. “I will say, this is as far as I am willing to go. As far as I personally am concerned, the negotiations are over.”

Carter said he didn’t like Bell’s amendment because it went against the basic model of how the program should work - the more people in the insurance pool, the cheaper the insurance.

“Although I don’t agree with what he had to say, I do give Rep. Bell credit on not taking the shutdown approach. You couldn’t see his face, but he was grimacing pretty hard up there,” he said.

House Democratic leader Greg Leding of Fayetteville said there are “things” that he doesn’t like in the proposals that cleared the Special Language Subcommittee, “but I know that at the end of the day there is probably going to have to be some compromise if we are going to keep this thing going.”

He said many House Democrats have concerns about limiting the outreach, and “that is something we are going to discuss and see how far we are willing to bend. But we can’t take the Democratic votes for granted.”

Carter, who has repeatedly said he’s confident that the House would vote to fund the private option, sounded less sure Wednesday.

“I think we’re going to lose some and I think we’re going to gain some. I think the net is going to be over 75. I think it just depends on how the emotions get on both sides,” he said.

Depending on the Joint Budget Committee meeting today, Carter said he and his staff members are ready to convene the House on Friday in hopes of passing a private-option funding bill.

“That would be my goal, to convene on Friday and get it done this week and get it over to the Senate,” he said. “I just think that passing it this week instead of letting it fester over the long holiday weekend would be the best idea.”

In a voice vote, the Special Language Subcommittee rejected a proposal by Sen. Jim Hendren, R-Sulphur Springs, to end the private-option program, effective Dec. 31.

In other business, the House handily approved a bill to grant 1 percent cost of-living raises for the state’s constitutional officers, judges and prosecutors, but not lawmakers.

The House voted 78-12 to approve House Bill 1002. The bill goes to the Senate for further action.

Information for this article was contributed by Claudia Lauer of the Arkansas Democrat-Gazette.

Calendar

This is the calendar of public events of the 89th General Assembly for today, the fourth day of the 2014 fiscal session.

COMMITTEES

9 a.m. The Joint Budget Committee meets in the Multi-Agency Complex, Room A.

HOUSE 1:30 p.m. The House convenes.

SENATE 11 a.m. The Senate convenes.

Front Section, Pages 1 on 02/13/2014

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