Arkansas Legislature Easily Passes School Employee Health Insurance, Prison, & Lottery Changes

Jul 2, 2014

Senator Larry Teague (D-Nashville)
Credit Sarah Whites-Koditschek / KUAR

The legislature wrapped up a special session just after midnight passing efforts to ease prison overcrowding, restrict monitor-based lottery games, and to make the health insurance program for public school employees closer to solvency.

The three day session largely went as expected with measures intending to avert looming problems passing both chambers with wide margins. Many lawmakers characterized the changes as incremental but needed.

Legislation altering the public school employee health insurance program was among the most contested of actions. Republican Senator Jim Hendren of Gravette chaired the task force responsible for crafting changes and was asked on the Senate floor to explain the result of a provision removing coverage for over 4,000 part-time employees.

“They have the same alternatives that are available to part time employees that work at Tyson, or Walmart, or McDonalds. They have the exact same options available as any employee in the private sector has. I guess that’s part of what the task force looked at…is what is the purpose of our education dollars and our health insurance dollars? Is it for health insurance or is it for job recruitment?” said Hendren.

Senator Joyce Elliott was one of a bi-partisan handful voting against removing part-time public school employees from the plan. Speaking after the vote in the Senate the Democrat from Little Rock argued removing part time workers creates too much uncertainty.

“The thing I’m most uncomfortable with is to say we’re going to place them on the Private Option and at the same time say we’re not sure we’re going to fund the Private Option. We’ve heard that over and over but that’s a very legitimate concern for me,” said Elliott.

Reforms re-directing $4.6 million in healthcare related tax savings from school districts back to the insurance program also passed both chambers. Another provision eliminating coverage for spouses who can get insurance through their own employer received legislative approval.

The changes are expected to prevent a 35 percent hike for most premiums. But Senator Hendren noted that means an even higher spike for some.

“There is no disputing the fact that the people on the bronze plan are gonna see a significant increase in their premiums. By significant I mean it’s gonna go from $11 to $60,” said Hendren.

Hendren argued asking for a higher premium for the bronze plan was needed to keep costs down for the gold plan – what over 50 percent of public school employees have.

“The crisis was generated by the pricing of the gold plan. The gold plan was overpriced because the bronze plan was underpriced,” said Hendren.

Joint Budget Chair Senator Larry Teague, a Democrat from Nashville, said he’s not confident about Hendren’s projections and expects a shortfall for the public school employee health insurance plan is still likely.

“This frustrates me to no end. My question is how much do we save, how much does it cost to provide the insurance? And I think we’re projecting a shortfall again but I never did get that out of them,” said Teague.

The task force studying the issue is expected to start meeting again to look for a long-term fix.

Legislation to allocate over $6 million to the Department of Correction for faced little opposition among legislators. Although a small crowd of Arkansans did greet legislators on the first day of the session advocating for sentencing reforms rather than more prison funding.

Republican Representative Duncan Baird introduced the bill and didn’t meet any resistance.

“This money will go toward opening 600 additional beds at the Department of Correction to relieve the county jail backlog," said Baird.

With the additional beds the state still expects to be over capacity by nearly 2,100 inmates.

A late addition to the special session’s agenda included legislation restricting video monitor lottery games. The Lottery Commission had planned to launch the games in the fall to bolster declining revenues and scholarship disbursements. But Republican Senator Jimmy Hickey of Texarkana said expansion to monitor games such as Keno - previously objected to by an oversight committee - would go beyond what voters approved in 2008.

“The law, the enabling legislation that’s there says that we could not have video lottery. What we’re saying is that there’s no difference between video lottery and these monitor screen games,” said Hickey.

Speaking before floor votes Tuesday Lottery Director Bishop Woosely disagreed.

“Lottery games were understood by the people and at that point I think 10 states played Keno. So, we’ve got a difference of opinion as to whether or not that was originally contemplated. We believe it was, there are some that don’t, and that’ll be part of the discussion we have over the next eight months,” said Woosely.

The prohibition on monitor games expires in March 2015 – when the legislature convenes next for a regular session. The consensus among legislators is that future reforms to the public school employee health insurance program, prison system, and lottery are needed to address systemic problems. But most lawmakers think this special session will buy them time until a new governor and new legislature are sworn in.

The bills await Democratic Governor Mike Beebe's signature.