Gov. Mike Beebe signed legislation Tuesday that will let 250,000 poor Arkansans obtain private health insurance that will be paid for with federal Medicaid dollars - culminating a months-long effort that many never expected to see come to fruition.
“With what we’re signing today we accomplished a lot that a lot of people thought was virtually impossible to accomplish,” Beebe said. “This is a combined effort by a whole lot of people.”
If the insurance model is approved by the federal government, Arkansans who earn up to 138 percent of the federal poverty level, or $15,145 annually, would have their premiums paid with Medicaid dollars.
They would be able to obtain insurance from private companies on a marketplace called an insurance exchange, along with more than 200,000 Arkansans who would pay for their own insurance.
In a matter of moments, Beebe signed three bills creating the model known as the “private option” Tuesday. House Bill 1219 gives the state Department of Human Services authority to spend hundreds of millions in fed-eral funds on the program. House Bill 1143 by Rep. John Burris, R-Harrison, and Senate Bill 1020 by Sen. Jonathan Dismang, R-Beebe, let the department create the program, once it gets federal approval.
Many politically active people thought providing insurance to this population was a nonstarter after the U.S. Supreme Court ruled in June that states could choose whether to expand Medicaid coverage to people making below 138 percent of the federal poverty level, and Republicans won control of the Arkansas House and Senate in November for the first time in 138 years.
Republicans hold 21 of 35 Senate seats and 51 of 100 House seats. All Democrats in the Legislature and its lone Green Party House member voted for the bills.
A normal bill requires a simple majority, but a bill authorizing spending needs approval from 75 percent of members in each chamber.
Beebe said he knew by August that it would be “nigh on impossible” to secure support from three-fourths of legislators to add the population to the current $5 billion Medicaid program, that serves 780,000.
“Three-fourths is Mount Everest in terms of mountains to climb, so I never had any illusions anything was going to be easy,” Beebe said.
Still, Beebe said, there were hints as far back as November that Arkansas could pursue something different, although initially only for a more limited group of people.
He said he met repeatedly with agency heads and state Legislators to come up with a plan.
Co-sponsor of the bills Sen. David Sanders, R-Little Rock, said through those meetings the supportive lawmakers and Beebe came to an understanding.
“We had a meeting over at the mansion where I think the governor understood us a little more in terms of what we were willing to look at,” Sanders said. “It was working together in good faith that they became clear that we had some very sincere goals and were extremely serious about finding the right policy.”
Legislators encouraged him to ask U.S. Health and Human Services Secretary Kathleen Sebelius for more freedom at a meeting in Washington in February.
“We got the go-ahead conceptually to proceed along the lines where we ended up,” Beebe said.
Though Arkansas received tacit, verbal approval from the federal Health and Human Services Department, Beebe and the supporting legislators still had to rally support from at least half of House Republicans and seven Senate Republicans, not an easy feat when many of them had campaigned directly against adding this population to Medicaid or against implementing the federal health-care law in any way.
Arkansas Department of Human Services Director John Selig said he didn’t give up hope that the 250,000 eligible people would get coverage somehow. He said he was heartened when Sebelius said Arkansas could work toward a plan.
“Suddenly it really looked like it was a possibility. Though I have to say, in the last couple days I wasn’t sure. Those are close votes. I was nervous,” Selig said.
After weeks of wrangling, outspoken opposition from some conservative groups, multiple public meetings, and more than one rejection by the House, the spending authority bill passed 77-23 in the House and 28-7 in the Senate.
“We didn’t have anything to spare,” Beebe said. “And some of those votes were difficult for those people. Some of those votes took a lot of courage.”
He pointed to House members who said publicly that they think the private option is the best choice available, but said they voted against it because they couldn’t convince their constituents.
Some still aren’t convinced the private option was the best route to take. A handful of Republican lawmakers had asked for more time to consider the choice and more time to learn exactly what the final program would look like.
Senate Republican leader Eddie Joe Williams of Cabot said he doesn’t believe there will be a civil war in the Republican Party over the private option.
“Philosophically, there are some who still want to think that expansion is Obamacare,” Williams said. “I think there is a 50-50 chance that the federal government may not accept it.”
Some opponents have said they will seek signatures for a voter referendum to overturn the law. The attorney general must OK ballot language before they can begin. Nothing official has been submitted, a spokesman for the office said.
Beebe said there are humanitarian, economic and budgetary reasons to support the private option and he doesn’t think it’s necessary to convince Arkansans that the legislature made the right decision.
An actuarial study showed if the health-care program is expanded, Arkansas stands to save $670 million over the next decade because of a drop in the state-subsidized traditional Medicaid rolls, increased premium taxes and a sharp increase in federal funding. A study by the Jackson Hewitt Tax Service estimated it saves Arkansas employers up to $38 million they would otherwise be charged in federal fees. The federal government would pay premiums for the expanded population until 2017. By 2020, the state would be responsible for 10 percent of the costs.
“I don’t have to go convincing them it’s the right thing to do. I think the facts speak for themselves,” Beebe said. “There are so many logical, logical reasons to be for this that you take your pick.”
Now that the bills have been signed, the Department of Human Services will work on details of the plan with the state Insurance Department, Selig said.
The bills require Human Services to seek a comprehensive waiver under Section 1115 of the Social Security Act. The waiver, in essence, exempts the private option from meeting certain requirements that accompany traditional Medicaid programs.
The waivers are designed to give states flexibility to try experimental, pilot or demonstration projects.
Selig said he isn’t sure when the waiver application will be submitted. He said the department aims to have permission by Oct. 1, when enrollment in the exchange begins, but at the latest Jan. 1, when coverage begins.
“The legislation is pretty clear that there are some key components that have to be part of this. The federal government understands that, I don’t think there will be any surprises. We don’t think there’s going to be anything that causes them great shock,” Selig said.
Front Section, Pages 1 on 04/24/2013