Supporters of Arkansas' Medicaid expansion say it's worth preserving for the sake of improving people's health and shoring up hospitals' finances. A pivotal group of Republican state lawmakers isn't buying that. But Gov. Asa Hutchinson is betting they will be swayed by the prospect of rutted roads.
On Tuesday, he warned fellow Republicans that if they don't give him the 75% vote he needs from both legislative chambers to approve Medicaid expansion's continued funding, he will cancel a special session on highway financing.
“If Arkansas Works is not funded, that means there is no ability to utilize surplus and take more money from general revenue to fund highways,” he said at the start of a special session on the Medicaid expansion program.
The state's Medicaid waiver program, which was spearheaded by Hutchinson's Democratic predecessor and expires in December, has helped cut the uninsured rate by more than half. About 225,000 people have received coverage under the program.
Hutchinson's new plan, which would require premium payments by beneficiaries, needs to win support from 75% of both the state House and Senate. But nine or 10 GOP senators in the 35-seat Senate have said they won't vote for it. That's enough to doom it. The proposal is under fierce attack by a Koch brothers-backed conservative advocacy group called Americans for Prosperity because it's part of the Affordable Care Act.
Failure to renew the Arkansas Medicaid expansion would be a serious political setback for the Obama administration, which is pressing for expansion in the 19 states that have not approved it so far. It would be a particularly stinging blow because Arkansas was the first state to receive approval from the administration for a customized approach to Medicaid expansion via a Section 1115 demonstration waiver. Since then, five other states with conservative leadership have received similar Medicaid waivers for expansion.
Under Hutchinson's proposed plan, Arkansans with incomes between 100% and 138% of the federal poverty level would pay up to 2% of their income in monthly premiums. Another new provision would require employed beneficiaries 21 and older to enroll in their employer's health plan if the employer agrees to participate, with the program paying for premiums and co-pays. And the state would send unemployed beneficiaries for job training and job search programs.
The administration has offered tentative support for Hutchinson's plan, which contains elements similar to waiver proposals in Kentucky, New Hampshire, Ohio, and Michigan. In an April 5th letter to the governor, HHS Secretary Sylvia Mathews Burwell said her agency looked forward to continuing its discussions with Hutchinson about his proposal. She clarified that the administration would not allow a work requirement, though it could support “referrals to programs that can help applicants increase their connection to the workforce and improve their economic outcomes.”
Burwell also expressed reservations about Hutchinson's proposal to eliminate 90-day retrospective coverage when adults sign up under the expansion program, which hospitals value because it allows them to receive payment for low-income patients before their Medicaid eligibility is certified.
Hutchinson told lawmakers Tuesday that he would not be able to transfer $40 million in surplus and rainy day funds to highways and thus qualify for federal matching highway funds without keeping the federal Medicaid expansion dollars. He warned that the loss of those Medicaid funds would leave a $100 million hole in the budget that begins July 1.
But GOP opponents of the Medicaid expansion scoffed, saying Hutchinson was using scare tactics. Sen. Bart Hester said he believed there was plenty of money available in the budget to fund the state's highways. “When you can't get what you want, you go to scare tactics and pressure,” he said. "Everywhere I drive in Arkansas there are orange (road construction) barrels. To say we're threatening to endanger our roads in some way because we don't pass the Obamacare Medicaid expansion is silly."
Expansion advocates fear that a small minority of conservative lawmakers may be able to roll back the successful coverage expansion. That could happen even though in the Super Tuesday primary elections last month, a Hutchinson-supported slate of GOP candidates mostly defeated primary opponents who ran on a platform of opposing Medicaid expansion.
Hutchinson and his allies hope the threat of Arkansas losing nearly $2 billion in federal matching highway funding over the next decade may bring these legislators around.
“Some Arkansas legislators believe that when it comes to promoting economic development, spending on highways should be a higher priority than providing health care for low-income workers,” said Rich Huddleston, executive director of the Arkansas Advocates for Children & Families. “We believe that a healthy and well-educated workforce is just as critical to the state's future economic competitiveness."
