Gov. Hutchinson: Keep Private Option Through 2016, Study Alternatives

Jan 22, 2015

Gov. Asa Hutchinson announcing Thursday morning at UAMS that he supports continuing the state's private option Medicaid expansion through the end of 2016.
Credit Arkansas Times

Arkansas’s Republican Governor Asa Hutchinson is calling for the state’s Republican controlled legislature to keep funding its version of Medicaid expansion, at least for two more years, without adding any changes. Hutchinson revealed his position Thursday for the first time in an address at the University of Arkansas for Medical Sciences.

Arkansas is the only state in the South that has taken federal dollars to expand access to Medicaid, a voluntary choice made available through the Affordable Care Act. Republicans and Democrats joined together in 2013, to make Medicaid expansion more palatable to conservatives, by diverting funds from a federally-run system to instead purchase private insurance. However, the so-called private option has never had an easy time, as Governor Hutchinson noted in his speech.

“Over the course of the last two years our state has been caught up in the debate. We have been wrapped around the political axle. The phrase private option itself has become politically toxic, so much so that it’s almost impossible to have a constructive conversation about healthcare reform,” said Hutchinson.

Many lawmakers expected Hutchinson to offer specific reforms, intended to entice reluctant Republicans. But Hutchinson called for the passage of the private option – without modification – at least for the time being.

“The current private option will remain through December 31 of 2016, period. The task force will determine the future. Those recommendations should come before the end of this year to allow time next year for any waiver requests, or authorizations, or other action and it will require additional legislative action,” said Hutchinson speaking to reporters after his speech.

Asking the more conservative wing of the Republican Party to continue the private option as–is in the short run, with the promise of future reforms through a task force was enough for some. That includes Senator Missy Irvin of Mountain View.

“We’ve got to I think hit pause and then decide how we move together in the future and do it in a way that is fully vetting the issue. I really appreciate that approach,” said Irvin.

Irvin is one of a score of those Hutchinson needs to convince with his remarks. The senator voted for the private option in 2013, but flipped to a no vote in 2014. But some, such as Senator Bryan King plan still to vote no on the private option.

Representative Bob Ballinger is another Republican, who has in the past opposed Arkansas’s version of Medicaid expansion. Ballinger said he hasn’t made his mind up yet, but unlike Hutchinson he still wants changes made this session, “yeah, there could be changes to it this session, sure. In fact I expect that as we go along.”

Amendments this session are still on the minds of some within the governor’s party, but Republican Representative Kelley Linck, a chair of a committee dealing with the private option, says that’s not what he prefers.

“You know, I certainly can’t predict what 99 other people in the House of Representatives are gonna do. Certainly I would not amend the private option. I think his [Hutchinson] intention is, let’s put this on hold. Let’s not grow it, let’s not decrease it, let’s put it on hold and figure out what we’re going to do,” said Linck

Democratic ranks were reduced from 49 seats in the 100 member House to 36 after the November midterm elections, but since the plan’s reauthorization requires a three-fourths vote their minority status could still hold some considerable sway. In the past Republicans and Democrats have formed a coalition to overcome a minority bloc of more conservative Republicans numbering under half of the caucus.

State Representative Greg Leding ( D-Fayetteville) said the governor’s announcement turned out well in terms of Democratic policy aspirations.

“I think we should absolutely work to provide the best healthcare system in Arkansas that we can. I think we owe stability to our hospitals and we certainly owe stability  to 208,000 some working Arkansans that have enrolled in the private option. So, it was better than I might have expected,” said Leding.

Although Hutchinson called for legislators to turn the page on tampering with the existing private option until the end of 2016, Leding thinks some amendments are still likely.

“I think it’d be hard to make votes without some minor changes. Certainly I would prefer to keep things as they are for now. Let’s go ahead and keep this task force going and see what recommendations they make in a year,” said Leding.

While Irvin and Ballinger want the task force to get rid of the private option, and possibly Medicaid expansion altogether, Leding is hopeful Medicaid expansion, if not the private option itself, survives in some form.

“I think the Governor was asking the task force to look at all options. If that means looking up a completely different alternative to the private option so be it, if it keeps a way to keep the private option [Medicaid expansion] going. It certainly sounds though that if the governor does want the private option to stick around it’s going to have his stamp all over it,” said Leding.

And what specifically the task force might do, and how it could alter the future of over 213,000 low income Arkansans benefiting from Medicaid expansion, is still up in the air. But Linck says he expects if the task force is approved, dramatic reforms will be coming.

“I don’t think his [Hutchinson] idea of the task force is to change the private option even. To me private option dies December 31, 2016. It’s gone. Its concept is gone. Everything about it is gone unless this task force does everything in the world and figures out this our only way of survival and I don’t think that’ll be the case,” said Linck.

The task force’s recommendations, on what Hutchinson is branding as a comprehensive approach to Medicaid reform, would come as federal contributions from the program drop from 100 percent to 95 percent in 2017. Hutchinson detailed the prospect of Arkansas sharing more of the cost of Medicaid expansion, up to 10 percent when fully implemented

“When it comes into full responsibility of the state, it’ll cost the state over $200 million. To put that into context that’s two $100 million prisons. Now, I know that doesn’t get anybody excited,” said Hutchinson.

Although whether Medicaid expansion continues as the private option, or in a new fashion – the matching percentages from the federal government will ultimately not change. And whatever conservative reforms are proposed – Hutchinson mentioned workforce training, health incentives, and consumer-driven approaches – they still have to get a federal waiver, allowing Arkansas to stray from traditional Medicaid. Hutchinson visited with federal officials late last week.

“I’m gratified that there’s an increasing willingness to give the states more flexibility. That will help guide that will help guide our decision in this healthcare reform task force,” said Hutchinson.

Arkansas now has a plan from its governor on how to proceed, at least in the near-future, with Medicaid expansion. And that’s an unaltered private option with promises of transformative changes in two years. What remains to be seen is if far-right Republicans will rally behind their fellow Republican governor, or fight as they did in the past to stop the program and flow of federal dollars.

Hutchinson also offered some insight into what he expects the task force to do with Medicaid expansion. The goal of the task force, Hutchinson said, is to find an alternative health coverage model that Arkansas can consider that would ensure services are maintained for those currently covered by the private option. 

The program was crafted two years ago as an alternative to the Medicaid expansion envisioned under the federal health care law. 

After the speech was presented, Republican Lt. Gov. Tim Griffin issued this written statement:

Governor Hutchinson’s decision to end the private option and to embark upon comprehensive Medicaid reform is exactly the right approach: The private option was never a sustainable or permanent solution, and only comprises a relatively small portion of the Medicaid program.

The Governor’s plan is thoughtful and deliberate and will result in a responsible, innovative and historic solution that will provide quality health care to those in need, without busting the budget or raising taxes on hardworking Arkansans.

For years, I have advocated for more State control over the Medicaid program. Governor Hutchinson understands the benefit of more State control and increased flexibility from the Federal Government, and he will demand it. I look forward to helping the Governor and the Legislature pursue comprehensive, effective, affordable, responsible and permanent Medicaid reform.

Rich Huddleston, executive director of Arkansas Advocates for Children and Families, released a statement, praising Hutchinson for continuing the program. The group's mission is to ensure children and families have the resources and opportunities to lead healthy and productive lives.

The Private Option has been a huge success here in Arkansas. We are glad to know the governor believes in its positive impact, that he cited the tremendous drop in our state’s uninsured rate, and that he used personal examples of how important the Private Option is to individuals and their families. He also highlighted how important the Private Option has been for hospitals in Arkansas, reducing the cost of treating uninsured patients by over $69 million.

We agree with Gov. Hutchinson that the goal is to have a healthier Arkansas.

That’s why, moving beyond December of 2016, it will be important to have a plan that protects quality, affordable coverage for Arkansans, protects the gains we’ve made so far, and does not put up unnecessary barriers to coverage. The governor said he will create a task force that will offer advice and direction for the program’s future. It is essential that this task force include health coverage and consumer advocates who speak up for Arkansas’s low-income children and families.