The Future Of Arkansas's Private Option

Jan 16, 2014

John Selig, Michael Leavitt, Andy Allison (Left to Right)
Credit Jacob Kauffman / KUAR

State lawmakers met Thursday afternoon to discuss the development and future of Arkansas’s Private Option. The joint meeting of the Public Health, Welfare, and Labor Committees did not make any formal legislative actions but the discussion is significant as the February 10th Fiscal Session approaches.

Legislators will have to decide then whether or not to re-authorize funds for the program. The plan uses expanded eligibility and funds from the expansion of Medicaid under the Affordable Care Act to purchase private insurance for nearly 250,000 low income Arkansans.

Andy Allison the Director of the Division of Medical Services for the Department of Human Services said the program is having a positive impact so far.

“Our marketplace is as much as five times larger than it would otherwise be, it has a median age at least ten years lower than it would otherwise be, and even for age the health risk profile of that insurance marketplace is better than it would otherwise be, systematically, by design. All told we just really are pleased with the profound impact that we think that will have on the competitiveness, the viability, of the private insurance marketplace,” said Allison.

Former Republican Governor of Utah Michael Leavitt, an opponent of the ACA, is part of the team the state contracted to review the rollout of the private option and suggest adjustments. He also served as Secretary of Health and Human Services under George W. Bush. Leavitt impressed upon legislators how significant the private option is.

“There’s a lot of confusion not just in Arkansas but in our country on healthcare. Out of that confusion sometimes comes opportunities for change that simply never come around again. The United States of America, the United States – underscored - are watching because this is not just pioneering it is truly transforming,” said Leavitt.

The discussion with Leavitt and two directors in the Department of Human Services focused a great deal on the benefits of the private option as opposed to expansion of the federally run Medicaid. State Representative, and a Republican candidate for Lieutenant Governor, Andy Mayberry suggested that premise is not where he wanted to begin.

“A lot of the conversation that we’ve had here today has been about private option versus expansion of traditional Medicaid program but I haven’t heard a lot about private option versus simply saying no to any type of expansion whatsoever. I think what you would find in this room, some have left now, but the individuals who would be opposed to continuing with the private option, that they in no shape form or fashion want to expand Medicaid, or using federal dollars to do so," said Mayberry.

He continued saying if the party in the White House changes then Republicans may be able to get their wish of ending insurance expansion altogether. Leavitt responded saying he disagreed with that line of thought.

“This is going to be marching forward irrespective of what happens in Congress over the next ten years in my view. I think it’s the wrong reason for Arkansas - not that I, this is your decision - any state that acts simply on the basis of whether politics are one way or another, is responding to the wrong impetus,” said Leavitt.

Toward the end of the meeting, as most legislators had already left, discussion moved to what would happen if Arkansas decided not to re-authorize funding for the private option. A former Bureau of Legislative Research official, David Ferguson, told lawmakers there are several triggers allowing Arkansas to stop the program if the federal government fails to meet conditions but that the federal government as well as insurance providers also have some leverage with Arkansas.

“We may be subject to some penalties from the federal government for being in breach of the federal contract,” said Ferguson.

He said it’s unclear exactly what might happen if Arkansas backs out of the plan but that it could result in lawsuits as well as patients being displaced from their new insurance providers.

Legislators continued to have some of the same battles they had during the last session, especially over the nature of entitlement programs, and whether or not providing insurance causes a disincentive to finding better employment.