Lawmakers Want Another Cost Estimate Of Private Option

May 8, 2014

Arkansas Sen. Bryan King (left) and Rep. Joe Farrer speak at a press conference Thursday.
Credit Michael Hibblen / KUAR News

A group of Arkansas legislators who have opposed the private option say they’ll ask a legislative committee next month to authorize another analysis of the financial impact of the program.

Republican state Sen. Bryan King of Green Forest says he’s concerned that the program, which uses federal Medicaid money to buy private insurance for low income Arkansans, is on track to cost the state significantly more than had been projected.

The consulting firm Optumas had said last year costs would average $437 per month for each person in the program. The Department of Human Services says the actual amount at this point is $490 for each of the more than 137,000 Arkansans enrolled.

King said during a press conference Thursday that the additional cost will have an even bigger impact in coming years as the state will be required to pay a larger percentage of the costs.

“If you get close to $200 million over budget on this, when the 10 percent kicks in, which may actually be 30 percent, we don’t know what that’s going to be," King said, "it could be $10 million to 20 million that’s going to have to come out of our general revenue. That’s going to impact our state later on, which in turn is going to impact how we fund schools, colleges and universities create a better tax environment.”

King and Rep. Joe Farrer of Austin said the study conducted by Optumas was flawed.

“We’re going to ask for a private, independent firm to come back, redo these numbers, see what our actual costs are. If we continue doing what we’re doing right now we’ll be over $21 billion on their estimated guess,” Farrer said.

State health officials say they expect costs to decrease in the near future and the federal government, not the state, will pay for any additional costs. They also argue that adjustments are being made that should bring costs back down to what was projected.