Healthcare Business News

Arkansas' private-option Medicaid alternative bill fails again

By Virgil Dickson
Posted: February 19, 2014 - 7:15 pm ET

The Arkansas House failed for the second consecutive day to approve legislation to fund the state's compromise private-option alternative to Medicaid expansion, even as other Republican-controlled states consider similar approaches.

Arkansas House Speaker Davy Carter, a Republican, vowed that the House will keep voting on the measure until it passes. The legislative session ends March 1. There is no limit on how many times the bill can be voted on, said Matt DeCample, a spokesman for Gov. Mike Beebe, a Democrat.

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The private-option plan allowed the state to buy private insurance for Arkansans with incomes of up to 138% of the federal poverty level, using federal Medicaid money. An appropriations bill that would have funded the option for another year needed 75 votes to pass the 100-member house, but only received 68 Wednesday, two fewer than what the bill got Tuesday.

At jeopardy is the coverage obtained by the nearly 100,000 state residents who have availed themselves of the program. Another 40,000 to 50,000 applications are currently being processed, DeCample said.

Beneficiaries “should be concerned with the fact that the House just tore down something that took years to build,” said Matt Salo, executive director of the National Association of Medicaid Directors.

State Senate leaders claim they have the 27 votes needed to approve the funding law once it reaches them.

Republican lawmakers had indicated for weeks that they were leaning toward not funding the program another year. On Monday, Arkansas House Majority Leader Bruce Westerman, a Republican, claimed that the state regrets the private option.

Many Republican-controlled states had cited Arkansas as a role model for an alternative way of using federal Medicaid funds rather than expanding Medicaid eligibility under the federal healthcare law.

Virginia lawmakers reportedly are waiting to see how the situation plays out in Arkansas, as they mull alternatives to Medicaid expansion.

In Oklahoma, “Arkansas' move away from the private option may make its adoption in Oklahoma even less likely at this time,” said David Blatt, executive director of the Oklahoma Policy Institute. However, he expressed optimism the state will realize that accepting federal funds to cover low-income adults is in its own interest.

In Kansas, South Dakota and Tennessee—three states that have yet to expand Medicaid—Arkansas' decision to defund the private option will likely have little effect, advocates in those places say, citing local political factors.

South Dakota, for example, is currently waiting for approval for an 1115 waiver that would allow it to expand coverage to childless adults under the federal poverty level, according to Dave Hewett, president and CEO of the South Dakota Association of Healthcare Organizations. So, what's happening in Arkansas has little relevance.

Hours before Arkansas' House members voted on Wednesday, New Hampshire's Senate Health, Education and Human Services Committee voted 4-1 on a bill that would allow that state to use federal funds to buy 50,000 residents coverage through the insurance exchange. A full state Senate vote will take place following its February recess.

GOP state Sen. Andy Sanborn was the lone dissenting vote and claimed he did so because he felt the current situation in Arkansas should serve as a warning not to move forward.

Arkansas was the first state given federal approval to use Medicaid funds to purchase private insurance for the newly eligible under the health law.

Follow Virgil Dickson on Twitter: @MHvdickson

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