Gov. Asa Hutchinson on Thursday effectively saved Arkansas' first-in-the-nation hybrid Medicaid expansion by voiding part of a budget bill that would have ended the subsidized insurance for more than 250,000 poor people.
The Republican governor vetoed a provision in the Medicaid budget that ordered a Dec. 31 end to the program, which uses federal funds to purchase private insurance for the poor.
"A lot of courage on all sides of this issue led to this result today," Hutchinson told reporters after issuing the veto.
Arkansas was the first state to win approval for its hybrid Medicaid program, created three years ago as an alternative to expanding Medicaid under President Barack Obama's healthcare law.
Hutchinson's move ended a standoff over the program. A handful of Republicans had earlier tried to block the program by refusing to approve a Medicaid budget bill that funded it.
To get around opposition by some conservative Republicans, Hutchinson and legislative leaders devised an unusual parliamentary move that required supporters of the program to back a provision ending it. Democrats, who unanimously support the Medicaid expansion, reluctantly agreed to the maneuver. It also had the backing of some Republicans who opposed the program and had advocated its defunding.
"We put the people of Arkansas first," House Minority Leader Michael John Gray, a Democrat from Augusta, said in a statement. "Democrats stood together to protect the well-being of children and families across our state."
Health advocates have credited the expansion for a dramatic drop in those without coverage, with the percentage of uninsured Arkansans dropping from 22.5 percent to 9.6 percent since 2013. Hospitals around the state have also said the program has cut the amount they're paying for treating patients without insurance.
Hutchinson is expected to have more than the simple majority of votes required to uphold his decision to reinstate the program when opponents try to override his veto, which could happen Tuesday.
Hutchinson and legislative leaders warned that ending the expanded coverage would've created a $100 million budget deficit and meant significant cuts for schools, prisons and a host of other state services. The reductions would have been needed to increase funding for the state's traditional Medicaid program and for hospital care for those without insurance.
The hybrid expansion sharply divided Republicans who control both chambers of the Legislature, with opponents of the program portraying it as an embrace of the Obama's federal health care law they want repealed. Conservative groups have also signaled they'll likely target Republican lawmakers who backed the line-item veto maneuver in future GOP primaries.
"We are taking a step towards the march of federal control and government expansion," said Republican Rep. Robin Lundstrum, who voted against the budget measure Thursday.
Hutchinson repeatedly derided the federal health overhaul when he ran for governor two years ago but avoided saying what he'd do about the hybrid expansion. Hutchinson called for keeping the expansion after he took office and lawmakers this month approved his plan to add new restrictions to the program, including a requirement that some participants pay premiums. Those changes will require federal approval.
"We are making the best judgment for health care in Arkansas based upon federal policy right now," Hutchinson said. "That's all a governor can do. That's all legislators can do. What's the best thing right now?"
Republican opponents of the program have called the veto maneuver an end-run around the state's budget process and predict it'll be challenged in court. Hutchinson and legislative leaders have said they believe the veto would withstand a legal challenge.
The tactic even drew objections from a member of the governor's family who is a supporter of the expansion but voted against Thursday's budget bill.
"We're doing the right thing in the wrong way and it's setting a precedent for your kids and my kids and my grandkids that we should not be doing," said the governor's brother-in-law, Republican Rep. Kim Hendren.