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Arkansas Governor Beebe Talks Private Option At Health Affairs/Kaiser Health News Newsmaker Breakfast



February 24th, 2014

Those who have watched the debate in Washington over the increasing use of Senate filibusters will likely have considerable sympathy for Arkansas Governor Mike Beebe (D), the guest at today’s Health Affairs/Kaiser Health News Newsmaker Breakfast. At least the majority party in the Senate can break a filibuster with 60 out of 100 votes. In Arkansas, it takes 75-percent votes in both legislative Houses to pass an appropriations bill — including the funding necessary to continue operating Arkansas’s path-breaking “private option” approach to expanding Medicaid under the Affordable Care Act, in which those newly eligible for Medicaid under the ACA are insured through private plans rather than the state’s traditional Medicaid program.

The ACA requires states to expand their Medicaid program to cover all those making up to 138 percent of the federal poverty level and funds 100 percent of the state costs of the expansion, declining to 90 percent in 2020. After the ACA was passed, the Supreme Court made the Medicaid expansion optional for states. Arkansas was the first state to secure federal approval for the private option — sometimes called the “Arkansas Plan” – and this approach has since attracted attention from Republicans in other states interested in expanding coverage with federal dollars but averse to increasing the size of their traditional Medicaid programs.

The Republican-controlled Arkansas state Senate has voted to fund the private option – or “Arkansas plan,” as it is sometimes called – for its second fiscal year (beginning July 1), but several ballots last week in the 100-member state House of Representatives – also controlled by the GOP — fell a handful of “yeas” short of the needed 75 votes. The House plans to continue voting on the plan this week, and Beebe said he remains optimistic that it will pass. He said the case for approval is just “arithmetic,” referring not to counting votes but counting the dollars – all $89 million of them – that the state will need to cut from its next budget if the Arkansas does not reapprove the private option and thus loses the federal funding that goes with it, money that has already been committed to a tax cut that legislators are not about to repeal. That’s on top of the tens of millions more dollars that state businesses and hospitals would lose.

Asked whether the private option’s political troubles in Arkansas would discourage other states from adopting it, Beebe said that depended on whether they understood that those troubles stemmed not from widespread opposition but instead from his state’s peculiarly high threshold for approving appropriations bills. Beebe, who is in town for the National Governors Association meeting, also emphasized the “devastating effect” that backtracking on the private option would have on the state’s health insurance exchange, in which Medicaid expansion enrollees far outnumber those purchasing coverage with premium tax credits. If you pull the Medicaid population out of the exchange, you create an “upward cost spiral” and may “lose some of the insurance companies that are there,” he said.

Arkansas’ exchange is currently being run by the federal government (though the state is performing some functions in partnership with the federal government), but Beebe predicted that the state would eventually decide to operate its own exchange, as he has been urging from the start. Beebe said he got some support for that route at last year’s NGA meeting from Republican Governor Butch Otter of the very red state of Idaho, which has established a state-based exchange. When Beebe told him that Arkansas was opting for a federally run exchange, Otter responded, “You can’t do that … you’ve got to do a state exchange … Obama wants everyone to do a federal exchange, that’s how they are going to take it all over.” Beebe observed, “The irony of all this is that the very Republican, anti-Washington health care contingent, when all this came out, that didn’t want a state exchange, now has come to the conclusion that they want to reverse their position and do a state exchange.”

During the breakfast, Beebe also stressed the importance of moving away from fee-for-service health care and described his state’s payment reform efforts. Watch the entire event, and stay tuned for future Newsmaker Breakfasts.

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1 Response to “Arkansas Governor Beebe Talks Private Option At Health Affairs/Kaiser Health News Newsmaker Breakfast”

  1. JIMFITZSR Says:

    So if the Arkansas house does not approve continuing the Medicaid expansion it will cost the state $ 89,000,000.

    They reduced taxes last year by $89,000,000 because of the Medicaid expansion now and will have to cut this years budget by this amount! Or raise taxes. Heaven forbid!

    Not to mention the 100,000+ that will be denied insurance coverage.

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