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Avik Roy, scholar at the Manhattan Institute

State Reform Update: Medicaid expansion moves forward in Ark.

By Rich Daly
Posted: April 5, 2013 - 3:15 pm ET

Arkansas' Medicaid expansion—potentially a model for many other states—has begun to advance in the legislature and supporters are optimistic about its prospects.

The Arkansas Senate Public Health, Welfare and Labor Committee unanimously approved a Medicaid expansion plan Wednesday that would use federal Medicaid funds to buy coverage for beneficiaries on the coming federal health insurance exchange in the state. The legislation is based on a compromise between Democratic Gov. Mike Beebe and Republican leaders.

The bill's advance marked a stark contrast from widespread Republican criticism recently for any type of Medicaid expansion.

“We've come a long way in three weeks,” said Ray Hanley, chief operating officer of the Arkansas Foundation for Medical Care, which leading the expansion push.

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The expansion continues to face steep legislative hurdles and tight timeframes with support of three-fourths legislators required and the approach of a May 17 scheduled adjournment. Despite the bipartisan support the bill has received so far, Hanley's group plans to continue pressuring lawmakers because of concerns it could still derail.

Those concerns are well-founded, according to Avik Roy, a scholar at the Manhattan Institute, who has followed the developments in Arkansas.

“My understanding is that there is still a significant amount of skepticism and it's warranted,” Roy said.

He questioned the financial projections of the state that the expansion plan would carry a relatively small cost for Arkansas taxpayers and actually reduce federal costs. Part of those doubts stem from the actuaries' assumption that hospitals would have demanded higher rates without the exchange-based expansion.

Here are some recent developments in other states:

Arizona's legislative push to expand Medicaid has slowed down, according to its Medicaid chief.

Tom Betlach, director of the Arizona Health Care Cost Containment System, told Modern Healthcare that he doubted the Legislature would act on expansion legislation backed by Jan Brewer, a Republican, by end of April.

Betlach described the level of support for the bill as “mixed,” as Brewer administration officials continue lobbying efforts.

“The governor feels very strongly about this issue and I think history has shown that when Gov. Brewer has been determined and focused on specific issues, at end of the day she usually gets she wants,” he said.

Betlach said the Arizona expansion plan differs from the Arkansas approach in that it utilizes care management and aims to spawn greater competition among private plans to deliver cost-effective care.

“We've achieved what Arkansas is trying to accomplish,” he said.

Legislation to implement an Iowa Medicaid expansion backed by the governor was introduced Thursday, according to the Associated Press.

Republican Gov. Terry Branstad's Healthy Iowa plan would cover an estimated 89,000 residents, with participants responsible for contributions limited by income. It would expand an existing state-run plan using federal funds to provide the coverage.

The Democratic-led Senate previously passed a bill to expand the Medicaid program along the lines laid out by the Patient Protection and Affordable Care Act and add up to 180,000 beneficiaries to the program.

Democrats criticized Branstad's proposal for covering fewer people and costing more than a Medicaid expansion.

Texas House Republicans backed off initial approval of a Medicaid blueprint Thursday, according to the Associated Press.

Legislators approved features Thursday night that they would like included in a Texas plan to add more than 1 million people to the Medicaid program. The language was similar to one adopted by the Republican majority in the Texas Senate.

But after conservative activists blasted House members for approving the measure 86-57 the House removed the proposal from the budget.

The measure that would allow talks to expand Medicaid rolls. Gov. Rick Perry, a Republican, and other Republican leaders in the state have rejected expanding the health program for the poor unless the federal government allows Texas to develop its own variations.

Guidance issued by the CMS on March 29 indicated the agency plans to maintain strict parameters for any alternatives to expansion of the standard Medicaid program and all changes would be subject to the agency's approval.

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