Wednesday, February 12, 2014

Legislative panel approves special-language amendments to Private Option

Posted By on Wed, Feb 12, 2014 at 4:36 PM

click to enlarge BELL: "I do not believe that there is any other path that we have to exit this session without a shutdown." - BRIAN CHILSON
  • Brian Chilson
  • BELL: "I do not believe that there is any other path that we have to exit this session without a shutdown."

A subcommittee of the Joint Budget Committee today approved amendments — to be added as special language to the appropriation — to the private option, the state's unique healthcare plan that uses Medicaid funds to purchase private health insurance for low-income Arkansans. 

Rep. Nate Bell, one of the sponsors of the changes, said that while he opposed the private option, he did not believe that it was possible to end the policy and develop a responsible phaseout during this fiscal session. He called the addition of the new special language "a reasonable option for all of us...to continue to allow the state move forward without becoming like Washington D.C. and playing shutdown games." 

The amendments (again, technically this is special language, not an amendment to the underlying legislation) would make the following changes: 

* Ban state spending on outreach for the Health Insurance Marketplace (that includes the private option but also the entire marketplace created by Obamacare). That means no advertising, direct mail (a key to the private option's early success), or any other form of promotion, as well as discontinuing the work of the trained guides tasked with aiding folks with enrollment in the Marketplace. Most of these outreach activities are fully federally funded, but the state would not be able to spend those federal dollars. Eligible people would still be able to sign up for the private option (and medical providers or insurance agents could provide information about the program) but the state wouldn't be able to promote the private option. Private entities such as insurance companies could still do outreach and advertising. Here is a full copy of the amendment. 

* Require federal approval by January 1, 2015 of a waiver of Medicaid rules in three areas

1) Ending the mandate on the state to provide non-emergency medical transportation (NEMT). Currently, if a private-option beneficiary can prove they have no way to get to the doctor, the state has to offer transportation — this would take that guaranteed benefit away in the private option. For more on NEMT, see this post.  Importantly, however, the state will not see a full blanket waiver on NEMT as Iowa recently received — the state would still be required to offer NEMT in certain cases (presumably based on distance, type of visit, etc., with particular consideration for rural areas). Devil will be in the details in terms of what the exceptions are. 

2) Allow insurance companies to impose cost-sharing (such as co-pays or deductibles) for private-option beneficiaries between 50-100 percent of the federal poverty level (currently, the private option only has cost-sharing for people above the poverty line). It was already in the law that DHS was supposed to seek this waiver; this requires federal approval by 2015 or the private option ends. 

3) Establish Health Savings Accounts as an option for private-option beneficiaries. The details are still being hammered out, but this is an idea popular in Republican circles that would involve beneficiaries potentially accruing savings in a health-insurance account based on how much medical care they use. This is a particular pet project of Sen. Missy Irvin, the one senator who voted for the private option last time who has publicly flipped. Again, this was already in the law, but this requires federal approval by 2015. 

These essentially amount to the same possible "tweaks and adjustments" that we explored in our recent cover story on the private option. 

Rep. Nate Bell sponsored the amendment regarding outreach and Rep. John Burris sponsored the amendment covering the new requirements for federal waivers. 

Bell was explicit that he still opposed the private option, but said that he believed a compromise was the only way to avoid a legislative standoff. 

"We have a clear situation in front of us," Bell said. "The votes are almost certainly there to not pass the private option. The votes are almost certainly not there to pass a budget bill without the private option. That’s an impasse, folks. Do we want to become D.C.?" Bell, who voted against the private option last year and said that he planned to fight it in 2015, said he would vote for the appropriation during this year's fiscal session with these amendments. 

Bell explicitly acknowledged that “without active marketing, you probably get declining enrollment.” That is, for Bell, a feature, not a bug: "We're trying to create a barrier to enrollment." Less enrollment means lower costs, he said. "In general, as a conservative," he said, "if I have the opportunity to reduce government spending in a program from what’s projected … I’m probably going to take that deal."

The other thing to bear in mind: the get here for Bell is not just taking the foot off the accelerator on private option enrollment; he's also continuing to block spending on outreach — and completely eliminating the guides program come July — for the Obamacare Marketplace (the non-private-option pool, above 138 percent of FPL). Technically, almost all of the outreach funding  that his amendment would kill was only supposed to be directed at non-private-option consumers above 138 percent of FPL; thus, Bell's amendment would be landing a blow against the enrollment process in Obamacare wholly aside from the private option. 

The amended appropriation will come before Joint Budget tomorrow and could be up for a vote on the House floor as soon as Friday. While these amendments are likely to pick up some Republican votes in the House, they may lose at least a few Democrats, many of whom expressed anger about Bell's effort to block outreach funding.

Asked during the sub-committee meeting whether Bell's amendment would cause harm, DHS Director John Selig said, "We think it's harmful, but not as harmful as losing coverage for 100,000 people." 

Both Gov. Mike Beebe and House Speaker Davy Carter said that while they opposed Bell's amendment, they were willing to accept it as the cost of re-appropriating the private option. 

"I don’t agree with what he had to say, but I do give Rep. Bell credit for at least not taking the shutdown approach," Carter said. "At least he’s engaged and willing to talk about it. Apparently some in the Senate aren’t. I commend him on at least being willing to do what he did today, even though I don’t agree with him." 

Carter said that it was counter-productive to intentionally aim to decrease the pool of people participating in the insurance marketplace, as Bell's language would in effect do. But, he said, "it’s basically — do we lose it all or do we tweak it? The question becomes how much can you tolerate." He said it was time to move forward with the appropriation as amended today, "no less, no more."  He added that this was as far as he was willing to go: "That’s my personal line. I’m not willing to budge any more than that. I don’t like that. I’m not willing personally to go any further than that." 

"There are parts of it that I like better than other parts of it," Beebe said of the amendments; he said his office had been working with legislators on them and that the final draft was "worked out with our knowledge and consent." Of the cuts to the outreach budget, Beebe said, "the navigators [trained guides helping to facilitate enrollment in the Marketplace] are probably going to be gone after July 1." Beebe said that according to their legal counsel, there were no problems with federal law if the state stops all outreach. "You're still going to have some private-sector outreach," Beebe pointed out. 

Several Democrats were visibly angry and frustrated, and were aggressively critical of the amendments during the committee hearing. (One asked, "You're saying we should keep our citizens ignorant?" Another asked, "what is next —  should we stop the federal government from signing people up for Medicare?"). At least some said they would not vote for the private option with these amendments attached. House Minority Leader Greg Leding said talks within the party were ongoing and they would likely meet as a caucus tomorrow: 

We as a caucus are discussing it. There are things that give members cause for concern. There are some members who aren’t sure they can support the private option with these amendments. At the same time, we recognize there are going to be some changes that need to be made in order to secure the votes to keep the private option going.

Today, we almost certainly lost some Democratic votes. I haven’t done a full count of the caucus, but based on the conversations I had roaming around the room during the committee [if the vote was held today] we lost some.

I have serious reservations about some of these changes. I have concerns about the NEMT waiver and I’ve got concerns about eliminating the outreach. At the same time, I do realize that keeping the private option going is the [goal]. We’re trying to figure out how far we’re willing to bend. 

"Democrats aren't happy at all," Carter said. "I'm not happy about it. We may lose some and gain some, but I think the net is that there is over 75 [in the House]. That's probably the only way to get over 75." 

If Carter is right, the key political question is in the other chamber: whether any of the nine senators planning to vote no are swayed by Bell's argument that this is the best way forward. 

"Their choice is to either pass it or to shut the whole thing down," Carter said. "There aren’t any other choices. Whatever version we pass, that’s the choice. What decision they choose to make, they’ll have to live with that." 

To reporters after the meeting, Bell said, "In the last 24 hours opposition has hardened." Interestingly, Bell said that he thought that if the vote was held today, it would fail in the House because of a coalition of Democrats and Republicans blocking it. But "if the vote were held in the Senate today, I believe it would pass. That's just based on...individual conversations I've had with members. Now, everything down here is in a state of flux until we push buttons." Bell said he has spoken with seven of the nine "no" senators. He would provide no further details other than to say, "If a vote were held in the Senate today, I am reasonably confident of Senate passage."

Bell was blunt about his ultimate objective: "I didn't vote for this program originally, I don't like it, I want it to go away. I would love to see the program fail. I do want a controlled failure." But he believes that there simply isn't a clear end game to a defund strategy during this year's fiscal session. His amendments amount to an attempt to squeeze out what he can given the tricky terrain for private option opponents. 

That tricky terrain was highlighted just prior to Bell's presentation. Sen. Jim Hendren, a diehard private option opponent, tried an amendment that would have simply ended the program at the end of the calendar year. It was easily rejected by voice vote.

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