Northwest Arkansas Delegation Split On ‘Private Option’

Northwest Arkansas will send a divided delegation into the legislative budget session that begins Feb. 10, split on the issue of whether to keep paying for the so-called “private option” health care expansion.

“There’s very vocal opposition to this from my friends who live 20 miles away,” said Sen. Uvalde Lindsey, D-Fayetteville, a supporter of the private option plan. “I know my Republican colleagues have been under intense pressure to vote against this,” he said.

A loss of funding for the “private option” would impact hospitals and nonprofit agencies.

Kathy Grisham, executive director of Community Clinic, said loss of funding would mean many low-income people would lose their opportunity to get health insurance. Community Clinic offers health care to patients on a sliding fee based on a patient’s household size and family income.

“It going to put us right back to where we were before,” she said. “There were so many people without insurance, and we will still be there to care for those people.”

MaryBeth Musumeci, a spokeswoman for the Kaiser Family Foundation, said without the “private option” some people would be left without assistance.

“Private option” takes about $915 million in federal taxpayer money to help pay private insurance premiums for lower-income Arkansans. Federal health care reform, commonly called “Obamacare,” intended for that money to be used to expand Medicaid, a state-administered health care program largely paid for with federal taxpayer money.

However, opposition in the Legislature to expand the government program led the state to seek a waiver from the federal government allowing the private insurance option. The waiver was granted and the measure passed the Legislature in April.

The budget bill to authorize spending of the money, like most other spending bills, required a three-quarters vote in each chamber under the state constitution. House members from Benton and Washington Counties split 9-5 in support of the bill, but senators from the two counties split 2-3.

Spending for private option comes up again in the fiscal session next month. Since last year, one supporter in the Senate from northeast Arkansas resigned and was replaced by a vocal opponent in a special election. Another Senator from north Arkansas said she no longer supports the measure because of the way it has been implemented. The measure has also lost some support in the House, proponents say.

At least 85,309 people have enrolled in the private option program as of last week, according to the Arkansas Department of Human Services. The department reported 3,991 people in Washington County and 3,794 in Benton County signed up for the program.

Sen. Jim Hendren, R-Gravette, was one of seven state senators who voted against the plan in April. He said Wednesday he has no plans to change his vote.

“If anything, the failure of the rollout of Obamacare hurt private option’s chances even more,” Hendren said. “People who were concerned but uncertain are not uncertain anymore. Attitudes have hardened.” The federal government’s system for signing people up for the plan, particularly the federal website for signing up, was crippled for weeks by technical problems.

Rep. Randy Alexander, R-Springdale, expressed similar thoughts.

“Now I wouldn’t hesitate half a second to vote against it. Democrats are running away from it now. I wouldn’t be surprised if the whole federal law is repealed,” he said.

Sen. Bart Hester, R-Cave Springs, said he believes a compromise is possible. Hester said he remains opposed to private option, but is also opposed to a shutdown of the state government. Such a shutdown is possible if supporters and opponents don’t come to a compromise and either side refuses to pass other budget bills during an impasse.

“There are people who oppose this who would be willing to shut down to stop it, but there are people on the other side who would be willing to let that happen if they don’t get it,” Hester said of the private option. “There are things under discussion right now that, I believe, would let enough people vote for it. I’m sorry, but I can’t discuss them because I don’t want to blow anything up.”

Private option isn’t an issue lawmakers should rush through, said Rep. Charlie Collins, R-Fayetteville. A vast amount of information has come in since private option was passed in April, he said. For one thing, the Legislature has real numbers to work with, enrollments and a makeup of those who enrolled. Also, federal administrators have changed regulations and even deadlines on various aspects of the program, he said.

“I’ve compared this to a Rubik’s Cube before, and that still applies,” Collins said. “Every time to change the puzzle, the solution changes.”

Robert Leflar, a professor at the University of Arkansas School of Law, said the decision will have wide-ranging effects. An estimated 250,000 Arkansans are eligible for the expanded coverage that started Jan. 1.

“Under federal law, hospitals have to accept emergency cases whether patients are insured or not. So shutting off health insurance to that many people means hospitals treat but aren’t paid,” he said. “Also, people lacking insurance tend to skip preventative care which adds to the state’s illness burden and takes money out of caregivers’ pockets at the same time.”

Eric Pianalto, president of Mercy Hospital Northwest Arkansas, said the Rogers hospital provided $22.5 million in charity care last year. He said there was so much noise around funding the private option the hospital did not factor additional reimbursements into this year’s budget.

“The lack of funding would just put us where we were - no better off or no worse,” he said.

Pianalto added that additional money could alleviate some of the financial challenges facing a growing and aging population.

Bill Bradley, president and chief executive officer of Washington Regional Medical Center, said the Fayetteville hospital provided $12.7 million in charity care in 2012. He did not have final 2013 figures.

“We budgeted for ‘private option’ benefits at a conservative level. It appears the enrollment issues on the federal side may impact us negatively,” he said. “State enrollment has gone relatively well.”

Pat Driscoll, spokeswoman for Northwest Medical Health System, said it provided $111 million in charity care last year at hospitals in Springdale, Bentonville and Willow Creek Women’s Hospital in Johnson.

Arkansas’ private option eligibility for parents and child caretakers was 17 percent of the federal poverty level in 2013, said Kate Luck, public information coordinator for the Department of Human Services. Adults younger than 65 had to fall into a special category that included disabilities and pregnancy to qualify for Medicaid.

The private option covers people up to 138 percent of the federal poverty level. The Affordable Care Act offers tax credits to people with incomes between 100 and 400 percent of the federal poverty level.

“So, without a Medicaid expansion, the coverage gap will be people with incomes from 18 percent up to 100 percent of the federal poverty level,” she said.

The federal poverty level is $11,490 for an individual and $23,550 for a family of four. That means a family of four with an annual income of $4,004 up to the $23,550 wouldn’t qualify for assistance if the private option isn’t funded. A single-parent with one child couldn’t make more than $2,637 a year to qualify for Medicaid.

Leflar said Arkansas businesses would also face “shared responsibility” tax penalties under the health care law if the private option is stopped.

“And Arkansas will be paying federal taxes to support the Medicaid expansion in other states, while depriving our own citizens of the expansion’s benefits,” he said.

Stopping the program could also hurt the state’s reputation, he said.

“Arkansas, for once, is viewed around the nation as a creative leader on health care financing,” Leflar said. “We constructed a framework to take advantage of large-scale federal funding to improve our state’s public health. We did it through bipartisan cooperation, not Washington-style backbiting.”

Arkansas was the first state to receive federal approval to use Medicaid money to pay for private insurance. Iowa has a similar plan that was approved in December and Pennsylvania has a plan under review.

“We’re going to have to let some people beat their chests and perhaps vote against it once, but I’m still confident we can get it done,” said Greg Leding, D-Fayetteville. Leding is the House minority leader, the top-ranking Democrat in the House.

Upcoming Events