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Friday, November 30, 2012

Majority Leader not swayed by new DHS projection on Medicaid expansion

Posted By on Fri, Nov 30, 2012 at 2:20 PM

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As I reported this week, the Department of Human Services updated their study on savings to the state’s bottom line if Medicaid expansion is approved, and the numbers look even better for Arkansas than previously thought.

Arkansas House Majority Leader Bruce Westerman told me yesterday that he was not aware of the new projection. (Seems like a lot of folks haven’t heard the news—Arkansas Surgeon General Joe Thompson was still using the old numbers in his speech at the Clinton School of Public Service earlier this week. Note to DHS: maybe it’s time for a press release?)

Informed of the new figures, Westerman, who was familiar with the original DHS study from July, said that he “disagreed with the method” that DHS used.

The DHS study looks at the various projected costs to the state if Arkansas agrees to the expansion: folks that are already eligible joining the rolls, the newly eligible folks that the state will eventually have to chip in for, and administrative costs; it also looks at the projected savings: additional state tax revenue from the new health-care spending in the state, savings from money currently spent on uncompensated care for the uninsured, and savings from folks currently covered by the state moving to the federally funded expansion population. According to DHS, the savings significantly outweigh the costs for Arkansas.

Westerman gets all that, but says, “I believe, to be responsible, you have to look at where that money is coming from that you’re spending in the first place. You’re taking federal tax dollars, spending them in the state, and taxing those dollars. That’s still tax dollars that you’re spending to generate these so-called savings.”

“I’m not doubting their math,” he said. “I’m not doubting that they didn’t take a set of assumptions and run calculations and they’ve got numbers they can defend. What I’m arguing is their set of assumptions. The revenue stream coming from the federal government — we’re going to tax it and we’re going to call that a cost savings to the state.”

What Westerman is really doing here is raising a philosophical objection to zeroing in on Arkansas’s fiscal picture in particular. At no point in our conversation did he raise doubts about the raw numbers. Westerman’s point is that the savings to the state are predicated on federal spending. Even if Medicaid expansion saves money for Arkansas year after year, as the new DHS study finds, that isn’t enough to convince Westerman.

“I don’ t think we can separate the two because the federal fiscal problem impacts our state,” he said. “I don’t think we can look at Arkansas in a vacuum and not consider what’s happening in the rest of the country.”

It's not surprising that Westerman isn't budging so far. After all, he has said from the get-go that "our view is that supporting Medicaid expansion is really embracing President Obama’s law."

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