Wednesday, November 30, 2016

Hutchinson wants Medicaid block grant to include Obamacare funds in its scope

Posted By on Wed, Nov 30, 2016 at 4:11 PM

click to enlarge CAREFUL WHAT YOU WISH FOR:Incoming HHS Secretary Tom Price (left) wants to end the Medicaid expansion. Republican Gov. Hutchinson wants to keep it, with modifications.
  • CAREFUL WHAT YOU WISH FOR:Incoming HHS Secretary Tom Price (left) wants to end the Medicaid expansion. Republican Gov. Hutchinson wants to keep it, with modifications.

In John Brummet's online column for the Democrat-Gazette today
, he writes of a recent conversation with Governor Hutchinson about the future of Medicaid in Arkansas.

Everything about health care policy remains up in the air until we see a concrete proposal emerge from the Trump administration about what to do with the Affordable Care Act, but as Sarah Kliff wrote recently in Vox, there's strong consensus within the GOP to move toward Medicaid block grants. Conservatives like block grants because they give states more control over how they run their Medicaid programs and because most block grant proposals promise to limit federal spending — which is another way to say they cut services. Incoming Health and Human Services Secretary Tom Price is a big fan.

At the moment, though, there is enormous variance in how much Medicaid money states receive per capita. That's in large part because of the wrinkle created in 2012, when the U.S. Supreme Court allowed states the ability to opt out of the Medicaid expansion that Obamacare uses to cover low-to-moderate income Americans. Some states accepted the expansion and some (Republican-controlled) states refused it. Under bipartisan leadership, Arkansas accepted a version of the expansion that created what's now called the private option (now rebranded as "Arkansas Works").

So if traditional Medicaid spending is block-granted, what happens to the expansion money? David Ramsey speculated yesterday that some GOP governors, like Hutchinson, might pressure their counterparts in D.C. to keep it in place.

Today, Brummett reported that Hutchinson does indeed want a block grant that includes the private option money as well. In other words, the governor wants the Obamacare tap to keep flowing in Arkansas. (He also wants to restrict access to that flow — perhaps through work requirements or increased cost sharing or other obstacles that federal authorities in the Obama administration have refused to authorize. Increased autonomy under a block grant would allow the state the authority to do just that.)

This isn't terribly surprising, since Arkansas is benefiting enormously from the private option money. In addition to providing health coverage to about 300,000 people — that's around 10 percent of this low-income state's entire population — it's resulted in a net fiscal windfall to state government that's allowed Hutchinson and his allies in the legislature to enact major tax cuts.

However, it's still significant that the governor is clearly stating his intent to advocate for a continuation of the policy, because pro-private option Republicans like Hutchinson have always framed their support for Arkansas's modified Medicaid expansion in terms of making the best out of a terrible situation — the terrible situation being the Affordable Care Act itself. Even with Republicans controlling the whole of the federal government, Hutchinson evidently still wants to keep the private option around.

Meanwhile, as Ramsey wrote on Monday, the ACA replacements dreamed up by the likes of Tom Price and Speaker Paul Ryan envision no such beneficence for Arkansas or other states that have enacted expansion. Their proposals would simply roll back the benefit, thus kicking millions of people off their insurance nationwide.

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