Legislators Give Go Ahead To Arkansas Governor's Medicaid Expansion Plan

Mar 7, 2016

State Sen. Jim Hendren (top left) listens as consultants from the Stephen Group speak during a legislative committee meeting Monday.
Credit Jacob Kauffman / KUAR News

Arkansas lawmakers charged with issuing recommendations on the future of the state’s Medicaid expansion program voted Monday to back the Republican governor’s proposal to change and continue the Affordable Care Act-enabled plan that provides insurance to over 250,000 low-income residents. A series of bi-partisan votes have narrowly carried the program since its 2013 inception.

The convening of the Health Reform Legislative Task Force was planned as the penultimate meeting.

“We are at the point where it’s time to make some decisions,” said State Senator Jim Hendren (R-Gravette) who is the group’s chair. “I appreciate your diligence over the last year working toward the point where we are today.”

10 of the 16 member task force voted to recommend the Legislature adopt Gov. Asa Hutchinson's Arkansas Works plan. Nine of 12 Republicans voted for the plan. All but one of the five Democrats abstained or did not vote - their opposition in part tied to a separate issues on the docket.

For

  • State Sen. Jim Hendren (R-Gravette)
  • State Sen. Jason Rapert (R-Bigelow)
  • State Sen. Jonathan Dismang (R-Beebe)
  • State Sen. David Sanders ( R - Little Rock)
  • State Sen. John Cooper (R-Jonesboro)
  • State Rep. Kim Hammer (R-Benton)
  • State Rep. Joe Farrer (R-Austin)
  • State Rep. Justin Boyd (R-Fort Smith)
  • State Rep. Charlie Collins (R-Fayetteville)
  • State Rep. Reginald Murdock (D-Marianna)

Against

  • State Rep. David Meeks (R-Conway)
  • State Sen. Cecile Bledsoe (R-Rogers)

Abstaining, Present or Not Voting

  • State Sen. Linda Chesterfield (D-Little Rock)
  • State Sen. Keith Ingram (D-West Memphis)
  • State Rep. Deborah Ferguson (D-West Memphis)
  • State Rep. Michelle Gray (R-Melbourne)

Arkansas Works adds four new sets of restrictions to what has been known as the private option.

  • First, it would encourage a shift to employer-based coverage and require beneficiaries with a an employer option to take it.
  • A second tenant of Arkansas Works is the issuance of work training referrals to unemployed beneficiaries.
  • Third, the wealthiest end of the low-income beneficiaries, those earning from 100-138 percent FPL would be required to pay premiums but not be locked out of coverage for failing to do so.
  • A fourth provision of Hutchinson’s proposal aims broadly to enhance program integrity, including the end of 90-day retroactive coverage.

The private option is, and Arkansas Works would be, a state-level modification of the ACA’s Medicaid expansion provision that uses expanded federal dollars - meant to put an expanded group of low-income people (up to 138 percent of the federal poverty level) on Medicaid – to provide private insurance coverage instead. It’s a flexibility built into the ACA subject to federal approval evaluating if certain parameters and conditions of coverage are met.

More detailed legislation embodying what Gov. Asa Hutchinson has lined out for his Arkansas Works program is expected for a task force vote on March 29 now that the concept has been approved. It then would head to a special session April 6th requiring a majority vote on enabling legislation followed by the fiscal session April 13th requiring a three-fourths vote for funding.

The continuation of Medicaid expansion has been predicated on federal officials approving several waivers from the Hutchinson administration to add new restrictions to coverage and on eliminating $835 million in five years from the traditional, non-expanded Medicaid population.

Before the Arkansas Works vote, Democratic State Senator Keith Ingram of West Memphis took a point of personal privilege to voice his disdain for the second part of that equation, the process of determining changes to traditional Medicaid hinging on issues of managed care.

“As this process moved forward I have been increasingly concerned about the influence emanating from the executive branch, especially in regards to managed care,” said Ingram.

“Apprehension began when the governor chose to negotiate with long-time care outside the purview of this committee. An agreement was struck with the nursing home industry but it was months before this committee was made aware of the details,” he said. “As we come to the end of this long, complex, and arduous task a feeling shared by many is that the governor has already decided his course of action regardless of the task force recommendations. It comes as no surprise that many of us have heard grumblings that advisors that members of this task force have sought out for this expertise have made to feel that if they don’t acquiesce to the governor’s plan any current or future business with the state could be put in jeopardy. If this in fact the case then I’m truly disappointed. Any agency, any corporation, any non profit, any state employee should never fear sharing their insight with members of the legislature without fear of reprisal. We have already seen one member resign in outright frustration,” he said referring to anti-Medicaid expansion Republican State Rep. Terry Rice of Waldron . “My great fear is even if it’s just perception,  not allowing the task force the independence to conduct its due diligence. It has needlessly created discord that this legislature can ill afford.”

The task force ultimately came to an impasse on how to best arrive at the governor’s savings goals for traditional Medicaid with competing plans failing to garner majority support. It was voted on after the Arkansas Works motion, despite Democratic State Senator Linda Chesterfield's request to voted on traditional Medicaid first. Hostility from this seemed to linger into the Arkansas Works vote. That open-ended issue may now have to be hashed out in the special session.

In the past Democrats have fought some conservative changes to the program but have backed up Medicaid expansion votes in the face of a conservative wing of the Republican party threatening to end the program. It takes just 25 percent in either chamber to hold the process up which Democrats could also muster to advance their agenda on traditional Medicaid changes.

The linkage made by the governor previously that savings from traditional Medicaid must be achieved to help fund Medicaid expansion appeared to have been complicated for some by testimony earlier in the day.

Stephen Palmer with consultants the Stephen Group projected that Medicaid expansion will have a positive impact of over $750 million over five years, even when the state starts contributing to the cost of Medicaid expansion.

State Rep. Deborah Ferguson (D-West Memphis) pointed out projections during a question that even when the state begins chipping in for Medicaid expansion – currently paid 100 percent by the federal government but phased up to a 10 percent state contribution by 2021 – the expansion still saves the state money without any cuts to traditional Medicaid.

It’s projected to accomplish this because the 90/10 match is still a better deal for the state than the pre-ACA 70/30 match, additional tax revenue will be generated from new plans, and more insurance coverage means a reduction in uncompensated care payments.

But some Republican legislative leaders interpret it differently – although the argument is also simultaneously made that Medicaid expansion is critical to keeping around $100 million in extra revenue needed in the governor’s budget plans.

State Sen. Hendren, who is also the governor’s nephew, said the two are linked when he opened the day’s proceedings.

“We can not continue Medicaid expansion if we can’t meet that general revenue obligation,” he said. “As a minimum you have to be able to pay for the hole that is created in our budget because of the general revenue cost sharing requirements that are going to be necessary.”

Senate President Jonathan Dismang took a different tact, responding to Rep. Ferguson later that afternoon, by saying savings in traditional Medicaid would be beneficial because traditional Medicaid – not including the expanded population – needs to generate savings for itself with escalating costs particularly for areas such as behavioral health, disabilities, and aging.

“If we’re  [saving while] in excess of the 10 percent what do we need the rest of the savings for? I know that’s not exactly how you [Rep. Ferguson] worded it, but I think that was kind of the gist of it,” said Dismang. “The existing [traditional Medicaid] program is facing a shortfall, or an increased need in state revenue, spending.”

He continued, “That is what really creates the need to have these additional savings in place. And generally, you can say they’re good things to do.”