Bottom line: Arkansas' "private option" plan for Medicaid expansion may continue through 2016.
Gov. Asa Hutchinson will ask lawmakers to reauthorize the private option and to create a task force to work on future health care solutions.
Hutchinson, who steadfastly refused during his gubernatorial campaign to reveal how he might address the issue, announced his intentions Thursday, little more than a week into his term.
It is a pivotal issue, not just for the program itself but also for the overall state budget.
The announcement came in a week that also saw legislative progress for the $100 million middle-class tax cut Hutchinson has promised. The Arkansas Senate approved the tax cut after adopting a friendly amendment that repealed a capital gains tax cut the Legislature approved two years ago.
The amendment restored to the budget roughly $21 million that would have come out, if the capital gains cut were to be implemented.
It is all part of the fiscal dance lawmakers do to balance projected revenue against required, or desired, spending.
Hutchinson's proposed budget is still being developed, even though he's seeking the income tax cut, his campaign priority, first.
While it still seems cart-before-the-horse thinking, the Legislature appears willing to cut taxes now and ask questions about the budget impact later.
To be sure, what happens with the private option is part and parcel of the budget-making process. Federal dollars totally support the program and, without them, there would be other challenges for the budget-makers to resolve.
Arkansas had to get a federal waiver to use Medicaid dollars made available to states through the Affordable Care Act, aka Obamacare, to buy private insurance for qualifying Arkansans. More than 213,000 people are enrolled, many with health care coverage for the first time in their lives.
Created two years ago, the program requires annual funding reauthorization. The appropriation must be approved by three-quarters of both chambers of the Legislature, which is an incredibly high bar and one that might still prove difficult even with support from the new governor.
While heralded nationally, Arkansas' private option continues to draw opposition in state, particularly among many of the Republican lawmakers elected last year.
Hutchinson's approach is to finesse support for continuing the program in the short term while promising change in the longer term.
His support is encouraging not just to those who have the insurance and could keep it for another couple of years but also to the state's hospitals. Treating fewer uninsured patients has been an obvious boon to the hospitals, which want the state to keep insuring people who might otherwise show up on the hospitals' doorsteps as indigent patients.
The governor's call to continue the program through 2016 is therefore welcomed from many quarters. The short-term continuation avoids harm to those covered through the private option and assures that hospitals and other health care providers will be paid.
What's magic about that 2016 date?
That's when the 100 percent federal funding for Medicaid expansion decreases to 95 percent. States will have to come up with a 5 percent match beginning in 2017. In 2020, the match would increase to 10 percent, if states continue to take the Medicaid expansion money.
That's millions more dollars that would have to be found in Arkansas' budget each year. But, if Hutchinson gets his way, a task force will develop recommendations by the end of this year for changes in the broader Medicaid program in Arkansas. (The private option really is just part of the challenge.)
Legislation filed last week would create the Arkansas Health Reform Legislative Task Force of 16 lawmakers and the state's surgeon general.
The lawmakers would be Senate and House leaders (or their designees). Included are the Senate president pro tempore and the House speaker as well as the majority and minority leaders of both chambers plus five more members of each chamber appointed by the president and speaker.
Their charge is broad and the time to respond short. They're to deliver an initial written report by Dec. 31. Then the hard work for the Hutchinson administration -- securing legislative changes and any necessary federal waivers and implementing proposed changes -- would start.
Lawmakers are all but certain to create the task force. Less certain is how well this Hutchinson-led health care reform will be received.
Also uncertain is whether lawmakers will actually follow Hutchinson's recommendation to continue the private option for the next two years.
He is a brand new governor and a Republican like many of the lawmakers who've staked out positions against the private option, but securing a three-quarters vote in both houses will definitely test Hutchinson's influence.
Brenda Blagg is a freelance columnist and longtime journalist in Northwest Arkansas. Email her at [email protected].
Commentary on 01/25/2015