Governor Hutchinson To Unveil Private Option Policy, Major Changes Expected

Jan 22, 2015

Gov. Asa Hutchinson (R)
Credit Sarah Whites-Koditschek / KUAR News

Governor Asa Hutchinson will for the first time reveal to Arkansans what he thinks should happen to the state’s Medicaid expansion plan in a speech Thursday morning at the University of Arkansas for Medical Sciences. The insurance program for over 220,000 Arkansans – known as the private option - faces a tough three-fourths vote this legislative session, as it did in the last, for re-authorization.

It’s been over 21 months since Asa Hutchinson announced he would run for governor, and over two since he won election. Throughout the entire campaign Hutchinson consistently pointed to both the perceived benefits and harms of the state’s plan without giving his position. All that will change when Governor Hutchinson makes his speech. But in the days leading up to the address, Hutchinson has spoken in generalities.

“I would ask everyone to broaden the debate, not just within the private option consideration, but all of health care reform,” said Hutchinson.

The private option is a moniker that has served to both woo conservative lawmakers, and to make them wary. The healthcare reform, crafted primarily by Republicans in 2013, is the state’s plan to access expanded federal funds for Medicaid, which has provided insurance to over 220,000 Arkansans. Instead of using the funds for the federally-run Medicaid, Republicans chose to purchase private insurance for lower income residents.

But access to the funding has made Republicans walk a tight line because the dollars and greater access to insurance are all tied to the Affordable Care Act. That doesn’t sit well with State Representative Joe Farrer (R-Austin).

“We have to have repeal, we have to repeal. I want to get rid of the program, I want to fix the system. What put, obviously, another broken system on top of one that was already broke,” said Farrer.

Farrer, in his second term, is part of the more conservative wing of Arkansas’s Republican Party; a faction that appeared after the November election to have grown. In the past the private option’s continuation had relied on a larger Democratic presence in the legislature. The coalition led Arkansas to become the only Southern state that chose to expand Medicaid, ruled a voluntary part of the Affordable Care Act.

But any continuation of the plan – or Medicaid expansion in any form – may have to appeal to legislators like Farrer. But even he, who last year voted against the program five times, said the atmosphere, is different this year, “Do we want to go into the session fighting like we did last year? That’s the question." Farrer said he is open to some reforms, including a cap on enrollees.

Because any reform requires a three-fourths vote, the Democratic minority could hold some sway in stopping unwanted changes. Democratic Representative Greg Leding of Fayetteville says of all possible conservative reforms, an enrollment cap is among the most disconcerting but something Democrats might reluctantly accept.

“That really rubs me the wrong way. At the same time I do understand that initially we estimated that a little less than a quarter million working Arkansans would qualify for the private option. We’re up to about 220 [thousand] now I believe. So, we may be about at the limit anyway. But placing a cap is something I still have some problems with, not necessarily a deal breaker because I still believe in the value of the program overall,” said Leding.

Neither the Republican Speaker of the House or Senate President has specifically called for a stop to enrollment for those earning up to 138 percent of the poverty level, or just over $16,000 a year for an individual. Changes related to health incentives, co-pays, health savings accounts, non-emergency transportation, and work-requirements are also possibilities.

Representative Clarke Tucker, a first-term Democrat from Little Rock, thinks Hutchinson’s address will plot a course agreeable to private option advocates.

“I’ve been impressed with his approach so far. I think it’s been pretty moderate, and reasonable, and pragmatic. I would be surprised if he does anything drastic, or makes any plans for anything drastic tomorrow, because of how moderate he’s been so far,” said Tucker.

Whatever changes might occur ultimately have to be approved by federal officials at the Department of Health and Human Services. Governor Hutchinson went to Washington D.C. last week to discuss on what terms federal waivers might be granted. Representative Kelley Linck, a Republican private option supporter, traveled with Hutchinson and says federal officials appear cooperative.

“I thought the conversations with HHS was encouraging. They didn’t simply look at us and say you’ve got stay with the private option, you’ve got to do this. There was no you’ve got to do this or that, very little anyway,” said Linck.

But for some conservatives, like Senator Bryan King (R-Green Forrest), the underlying funding tied to the Affordable Care Act makes just about any reform a bitter pill.

“People think I’m not open to compromise or different options, I am. But in the end it comes down to a couple things. How’s this going to affect our country because this thing of the federal deficit just being a Washington D.C. problem is not true. When you’re giving allowances in these states to spend federal dollars then you’re responsible for that too. It’s not just a Washington D.C. problem,” said King.

King didn’t say whether opponents of Medicaid expansion are softening their stance, in part to give deference to the new Republican governor, but he called for legislators who came into office on an anti-Obamacare message to stay true to their campaigns.

“We’ve all gone out there publicly and said how we feel about different programs. And whenever someone proposes something there’s going to be reactions and people should look at mostly what they told people back home,” said King.

As for what Governor Hutchinson promised in his campaign? He didn’t promise anything on the subject of Medicaid expansion or the private option, except to look at it carefully. After a long wait, Arkansas will soon know Hutchinson’s thoughts on the state’s healthcare system. He’ll be delivering his remarks at the University of Arkansas For Medical Sciences.

At the beginning of the week, UAMS Chancellor Dan Rahn testified to lawmakers and gave them a glimpse into his opinion of Medicaid expansion, which helped Arkansas lead the nation in cutting the percentage of uninsured, falling by over 10 percent.

“If things reverted to where they were prior to the passage of, the implantation of the private option we’d be back in the same boat, right. But we could not do that financially, we’ve have to put other measures in place,” said Rahn.

The governor’s address is being live streamed here: