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Analysis: Arkansas private option supporters walk fine line


By Andrew DeMillo, Associated Press
Posted: January 26, 2014 - 11:00 am ET
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Supporters of Arkansas' "private option" Medicaid expansion are walking a fine line as they assess the future of the program before this year's legislative session. They don't want to understate the danger it faces of being defunded, but they don't want to declare it dead just yet.

It's becoming a tougher balancing act as the session focused on the state's budget approaches. What had already been a bleak picture for the program became more bleak last week after losing another one-time supporter. Sen. Missy Irvin, who had been a deciding vote for the expansion last year, said she couldn't support renewal.

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"While opposed to further public dependence on government programs, I had been convinced that the private option might be a first step in the right direction," Irvin, R-Mountain View, said last week. "I now see it is leading us in the wrong direction."

Irvin's announcement and Republican John Cooper's victory in a special state Senate election a week earlier prompted Democratic Sen. Linda Chesterfield to declare the private option as "at best on life support" when state Medicaid officials discussed their budget. Cooper ran primarily on a vow to defund the private option.

"If Senator Cooper does not vote for it and Senator Irvin doesn't, it's dead on arrival," Chesterfield told reporters.

Chesterfield's comments crystallized the view of private option supporters increasingly worried about the future of the program that had been touted as a model for conservative states that had otherwise rejected the federal health care law.

More than 76,000 people have enrolled in the program, which uses federal money to purchase private insurance for thousands of low-income residents who were newly eligible for Medicaid under the federal health law. It was approved as an alternative to expanding Medicaid's enrollment under the overhaul.

State officials and advocates of the private option had already stepped up warnings about what would happen if lawmakers didn't reauthorize the private option, with $89 million in the state's budget dependent on the savings they expect from the program.

Democratic Gov. Mike Beebe warned that blocking the expansion could have widespread consequences in his proposed budget, possibly threatening funding increases he's proposed to alleviate prison and local jail overcrowding because of parole overhauls.

"The ramifications are huge, and the Legislature will have to figure that out," Beebe told reporters last week.

But Beebe at the same time is warning Chesterfield and others that there's plenty of time between now and the Feb. 10 start of the session.

"Don't get ahead of yourself. ... Right now, there's a lot of reaction that's got a lot of politics to it," Beebe said. "By the time it comes to a vote, there will be real factual issues to be determined and real ramifications."

Beebe's optimism partly reflects the belief among private option supporters that cutting tens of thousands from the insurance program will be a tougher choice for lawmakers than the abstract debate over the private option and the health care law in general.

The stepped-up lobbying effort includes advocates highlighting personal stories of those who would lose coverage under the defunding plan and the state Chamber of Commerce warning about the tax increase businesses could face if the program is discontinued.

Even more telling than those efforts may be the warning from state officials to lawmakers who questioned whether the federal government would allow Arkansas to end the program. State Medicaid Director Andy Allison told lawmakers the federal government couldn't penalize the state for discontinuing the program.

"Essentially when this Legislature decides it want to defund the private option, the primary concern isn't with (Centers for Medicare and Medicaid Services) and the federal government," Allison said. "It's the impact and how quickly you want to actually remove that coverage from individuals who are covered and change the system here."

In other words, how to end the private option isn't as difficult a question as what to do if it's gone.


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