Motion to override governor on Medicaid line item fizzles

The state Senate on Tuesday declined to consider overriding Gov. Asa Hutchinson's line-item veto of legislation that would have ended Arkansas' version of the Medicaid expansion on Dec. 31.

In a voice vote, the Senate rejected a motion by Sen. Bart Hester, R-Cave Springs, that would have cleared the way for a separate vote on overriding the Republican governor's line-item veto, which Hutchinson issued Thursday. A majority vote of the 35-member Senate and the 100-member House of Representatives is required to overturn a governor's veto.

"We all expected that," Hester told reporters after the Senate rejected his motion. "We had been through a long fight. It was just finishing it."

On Wednesday last week, the Senate -- followed by the House on Thursday -- narrowly approved Senate Bill 121. The bill included reauthorizing the use of federal Medicaid funds to purchase private health insurance for low-income Arkansans in the next fiscal year. Later Thursday, Hutchinson vetoed a section in the bill that would have ended the Arkansas Works Medicaid expansion on Dec. 31.

In his two-page veto letter, Hutchinson wrote that the section of SB121 that he vetoed was considered and adopted by the General Assembly without first obtaining a two-thirds vote of the House and the Senate as required under Amendment 86 of the Arkansas Constitution. He wrote that the General Assembly "cannot avoid this requirement by inserting this substantive change to the Arkansas Code in special language of an appropriation bill.

"By vetoing this section, our state will avoid serious consequences and the Department of Human Services will be able to implement the Arkansas Works Program, which was overwhelmingly approved by the General Assembly" in a special session earlier this month, Hutchinson wrote.

About 267,000 Arkansans are provided health insurance coverage through Arkansas' Medicaid expansion, and most of them receive the coverage under the "private option," which uses federal dollars to purchase private health insurance.

Hutchinson also had warned that failing to reauthorize funding for Arkansas' Medicaid expansion would create a more than $100 million "hole" in the state budget.

He has proposed a $142.7 million increase in the fiscal 2017 general-revenue budget, raising it to $5.33 billion. The proposal factors in his nearly $101 million cut in individual income tax rates that was enacted by the 2015 Legislature.

To reduce opposition to the initial version of SB121 -- which failed to clear the Senate by two votes -- the bill was amended last week to add a "sunset," or ending date, of Dec. 31 to funding of the Arkansas Works program. Hutchinson had promised to issue a line-item veto of that sunset provision, thus allowing Arkansas' version of the Medicaid expansion to continue for the rest of fiscal 2017. Fiscal 2017 begins July 1 of this year.

Sen. Blake Johnson of Corning and Hester, who were among 10 Senate Republicans who voted against SB121 nearly two weeks ago when it lacked the amendment, joined 25 other Senate Republicans and Democrats in voting for the amended bill last week. Twenty-seven votes are required to pass an appropriation bill in the Senate.

SB121 grants the state Department of Human Services' Medical Services Division $8.4 billion in spending authority, including $1.7 billion for the Medicaid expansion for fiscal 2017. The bill also grants spending authority to various other Medicaid programs.

The Medicaid expansion enacted by the Legislature in 2013 extended insurance coverage to adults who have incomes of up to 138 percent of the poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.

The Arkansas Works legislation, approved during a special legislative session earlier this month, encourages enrollees to stay employed and take responsibility for their health care, Hutchinson said.

The Medicaid expansion has been fully funded by the federal government since it started in 2014. The state will begin paying 5 percent of the cost starting Jan. 1 -- $43 million in fiscal 2017, a state spokesman has said. The state's cost will gradually increase to 10 percent by 2020.

Arkansas' Medicaid expansion has deeply divided Republicans ever since the GOP-controlled Legislature and then- Democratic Gov. Mike Beebe authorized its creation in 2013. The House and Senate have narrowly authorized the use of federal funds for the program during each of the past four years.

Arkansas is eligible for the federal funding of the Medicaid expansion under the U.S. Patient Protection and Affordable Care Act that was signed into law by President Barack Obama in 2010. Some supporters and opponents of that law call it Obamacare.

"I think the onus is on the proponents of this program to make sure that it is underbudget and the things that they have told the people of Arkansas that it would be," Hester said. "I don't believe that's going to be the case, and I think I'm going to have a better argument when we come back in '17 [for the regular legislative session]," he said.

"If this thing is under budget and doing glorious things for Arkansas, which I don't believe it will, we'll certainly take the facts under consideration," Hester said.

Joint Budget Committee co-Chairman Sen. Larry Teague, D-Nashville, who supports the Medicaid expansion, said he expects it to be tough to obtain the required three-fourths vote in the Senate and House for reauthorizing the use of state and federal funds for the Arkansas Works program during the 2017 regular session.

"I assume it is going to be tight every year ... because you have people who don't believe we ought to do it, so every year it's at least going to be a discussion," he said.

A Section on 04/27/2016