Gov. Hutchinson Defends Medicaid Expansion Plan As Backers Face Primary Challenges

Feb 16, 2016

Gov. Asa Hutchinson and other officials at a press conference Tuesday at the state Capitol.
Credit Jacob Kauffman / KUAR News

Governor Asa Hutchinson is defending Republican legislators backing his Medicaid expansion plan as early voting begins for Arkansas’s March 1 primary. 

Speaking in the Old Supreme Court room in the state Capitol on Wednesday he chastised those across the political spectrum who characterize the program, now known as the private option, as an embrace of the Affordable Care Act.

“They’re making the linkage between everybody who supports Arkansas Works and any form of the Medicaid expansion in states must be an ardent supporter of Obamacare or the Affordable Care Act. Let me tell you here today, that is not so. We need to debunk that argument,” the governor said.

Gov. Hutchinson called the connection “the worst of politics.” He had a few things to say about those who oppose his program too.

“You’re going to endanger public safety. You’re going to jeopardize our commitment to education,” the governor said referring to state projections of a $100 million annual budget hole without federal Medicaid expansion dollars.

Hutchinson made his remarks with a line of legislators both committed to his plan and those unannounced. Among them were state Senators Jane English and Eddie Joe Williams. Both are in contested primaries with opponents of Medicaid expansion, state Rep. Donnie Copeland and R.D. Hobbs.

“These legislators have never voted for Obamacare. In Arkansas we never had a vote on the Affordable Care Act, on Obamacare. That’s something that was decided in Washington,” said Hutchinson. “We had to pick up the pieces and make the right decisions.”

He outlined three reasons why working within the existing Medicaid expansion framework, administered by federal officials interpreting the ACA, is prudent.

1) Fairness. Gov. Hutchinson referred to the coverage gap that exists without Medicaid expansion, “It makes no sense to punish those that are in the lower income and to continue to subsidize those in the middle income.”

Those earning above 138 percent of the federal poverty level will continue to get ACA subsidies for insurance through the federal healthcare exchange, healthcare.gov while the those earning less (the Medicaid expansion population) would be cut off from coverage, though Arkansas taxpayers would still be paying federal taxes toward the program.

2) Healthcare. “The facts are we have expanded healthcare in a state that is low in terms of healthcare access. We have elevated our state. We have improved healthcare access. We have improved healthcare access for our state.”

Since Medicaid expansion’s implementation Arkansas has led the nation in percentage reduction of its uninsured population dropping from 22.5 percent in 2013 to 9.1 percent in 2015.

3) Budget. “If we reject Arkansas Works, if we reject the Medicaid expansion dollars and say no, we’re going to turn in back to Washington then we’re going to have a $100 million plus gap in our state budget,” he said. “To balance that budget without the Medicaid expansion dollars…you’ve got to cut a lot in education, across the board in our agencies, end the highway program that I’ve initiated or you’ve got to raise taxes.”

The governor said opponents who think the program will collapse “have to deal in a real world.” He noted over 30 states have adopted some form Medicaid expansion and the systems have remained in place. Arkansas would be the first state to withdraw from Medicaid expansion.

He said after the King v. Burwell U.S. Supreme Court decision which ruled the ACA provision optional for state to implement that, “we all sat there on pins and needles and waited to see if it would collapse. It didn’t collapse.”

The ACA provided increased federal dollars to cover a newly eligible group of people, those earning up to 138 percent of the poverty level. Participation in Medicaid expansion is up to each state. Hutchinson is asking the legislature in a special session after the primary to continue Arkansas’s version of the program which covers more than 200,000 low-income people with adding new restrictions for coverage.

The federal government funds 100 percent of the cost but that will shift to 90 percent, with a 10 percent state burden by 2021. The pre-ACA, pre-expansion population rate was 70 percent.

Governor Hutchinson is expected to release new details in a legislative meeting on Wednesday of his negations with U.S. Department of Health and Human Services Secretary Sylvia Burwell in seeking a waiver to: encourage employer-based coverage, require work training referrals, add premiums for some, and alter program integrity.

The governor hopes that if a Republican president is elected that state's will be granted further flexibility to alter the use of federal Medicaid dollars. He would like a block grant where the state can add conditions such asset testing, lifetime benefits, premiums, and work requirements.

Responding to a question Hutchinson said he thinks that fundamentally any replacement of ACA, or increased flexibility within it, should keep federal dollars coming to Arkansas for supporting the existing expansion population - those earning up to 138 percent of the poverty level - rather than returning to pre-ACA income eligibility levels.

"Yes," he said. "If you recall my first speech at UAMS. I said one, 'were going to end the private option...' but I also said we need to come up with a program for the future than takes care of the healthcare needs of the 200,000-plus Arkansans in the Medicaid expansion category. That was my view then, that is my view now, it'll be my view next year."

Within an hour of the governor's remarks the conservative political advocacy group Americans for Prosperity Arkansas released a statement rejecting the Republican governor's arguments in favor of Medicaid expansion.

“Today Governor Hutchinson attempted to paper over the fact that Medicaid expansion is one of the core pillars of Obamacare, just like the employer and individual mandates. President Obama’s own Centers for Medicare and Medicaid services have stated that Arkansas has ‘implemented the ACA Medicaid expansion.’ The Governor’s outline for ‘Arkansas Works,’ just like the ‘Private Option,’ relies on Obamacare money to provide a taxpayer-funded entitlement to the exact same population as outlined in Obamacare’s Medicaid expansion. This is a distinction without a difference, and Arkansas legislators should reject any attempts to cement Arkansas’s status as an Obamacare Medicaid expansion state.”