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The future of the private option 

A Q&A with Rep. Charlie Collins, co-chair of a health reform task force.

REP. CHARLIE COLLINS - BRIAN CHILSON
  • Brian Chilson
  • REP. CHARLIE COLLINS

By law, the Health Reform Legislative Task Force must make recommendations on the future of health care in Arkansas by the end of this year.

The task force was created by the legislature earlier this year at the request of Gov. Asa Hutchinson. It is charged with exploring options for the private option — the state's expansion of Medicaid covering more than 200,000 Arkansans, which is set to expire at the end of 2016 — as well as for the rest of the state's $6 billion Medicaid program. The consultant hired by the task force, the Stephen Group, found that the private option projects to save the state budget $438 million between 2017 and 2021. The task force appears to be nearing a consensus that the private option coverage expansion should continue, albeit with some Republican friendly tweaks suggested by the Stephen Group. But it remains divided over what to do about the rest of the Medicaid program. The Stephen Group found that moving some of the high-cost populations in Medicaid (such as the aged, disabled and the blind) into managed care could save the state hundreds of millions of dollars annually.

The Times spoke with Task Force co-chair Rep. Charlie Collins (R-Fayetteville) last week to check in on the status of the task force with its deadline looming. The interview has been edited for length and clarity.

Give me the view from 10,000 feet: How are you feeling about where the task force is and where it's going?

I feel wonderful about that. I think that the Stephen Group has done a great job. They've gotten a lot of input from everybody involved and put together a very compelling set of recommendations to really move us to a great place.

The challenge now is — OK, we've got these strong recommendations but now we get into the difficult choices associated with them. For example, everybody sits in their chair at home and throws their shoe at the television screen and complains about the national debt. This task force is taking on those very issues. The hybrid managed care proposal is a $500 million per year reduction. So in one fell swoop we're knocking a significant amount off of our share of the annual federal deficit [the federal government covers 70 percent of the state's traditional Medicaid program].

The reason nobody else in the country is doing anything is because of the Herculean difficulty involved in doing it. It's not because people are stupid, it's because it's the hardest work imaginable. That's the real reason nobody's doing it. We're tackling that work.

But if you're making an argument about putting a dent in federal deficit spending via reforms to the traditional Medicaid program, what about the private option? The private option helps the state budget. But whatever we call the revised version of the private option, continuing the coverage expansion — which the Stephen Group recommendations would do, and which you support — means incrementally more federal deficit spending.

Breaking down all of the different pieces and how they all connect, we can do that. But I want to make sure that we separate the different discussions. There's three buckets of recommendations. One of them is [traditional] Medicaid savings, another one is what we do on the private option, and another is what else we are doing to improve in health care, from eligibility to improving liability issues in nursing homes. And there's a lot of other recommendations in there.

So if you ask me what I am personally focused on, my own guiding principle, my answer to that is that I'm focused on the Arkansas taxpayer. We're paying taxes to multiple entities, federal government, state government, local government, we're paying them all over the place. So that's who I'm defending. If you talk about the way the money works, if I was in charge I would simplify it, but I'm not in charge. In fact, President Obama got a lot more votes than I did, so he has a lot more power than I do. One of the things he did back in 2010 was raise 12 federal taxes and take $600 million out of Arkansas taxpayers' pockets. And then he reduced Medicare reimbursements to health care providers by $600 million per year. He took $1.2 billion a year out of our system. Getting that money back to the people of Arkansas is a priority in my view, which happens when we cover these expanded populations. Because that's the only way Obama will release it.

So ultimately you view the spending question through the lens of the state budget and state economy. And killing the private option would actually be a net loss for the state budget.

It would be a massive hit. This year it's $300 million. Not only do we have the direct costs, which are $150 million, but we also have the uncompensated care costs at hospitals.

That's not even getting into taking the federal money out of the state economy.

That's correct and, also, John Stephen [managing partner of the Stephen Group ] doesn't include — because he's biased against the private option — his numbers do not include 2015. They do not include 2016, where the benefits are dramatically higher [in 2015 and 2016, the federal government pays the full cost of the private option, while in future years the state of Arkansas will have to chip in a small percentage of the costs]. In other words, if you just include 2015 and 2016, the benefits to the Arkansas taxpayer double compared to the $438 million in savings he's got in that report.

When the task force was picking a consultant, you and the task force co-chair, Sen. Jim Hendren (R-Gravette), expressed concerns about the choice of the Stephen Group. It seems like that has flipped and you're happy with their work?

The referee is important in things like this because they bring a certain mindset to the table. I thought the other consulting group was stronger overall in terms of the creativity they would bring for innovative solutions. And also I thought they were not biased against the private option. I believe Stephen is — not was, but is — biased against the private option. It's like having Arkansas play LSU, but the referee was chosen by LSU.

But even with that kind of refereeing — now people have seen the financials of the private option. Stephen, as they've done all their work, they've been honest, they've done a very good job. I wouldn't undo my initial reasons for being concerned about them. However, I would also say that Stephen has listened to everybody, they've been very open-minded, they've gone with the facts on all these things. So they've played the role of the referee very well. That doesn't change the fact that in my view they still have the bias. We already talked about a great example: They've understated the benefits of the private option by almost half, in my view, by ignoring 2015 and 2016, the prime benefit years.

Knowing how it worked out now, did it have political value — a biased referee who is nevertheless stating that the state budget would benefit from continuing this policy? Does it swing the politics to have these recommendations come from the group hand-picked by private option opponents like Rep. David Meeks (R-Conway), Sen. Terry Rice (R-Waldron), Rep. Joe Farrer (R-Austin), et al?

That's for you to assess yourself. All I know is that I made sure we were loud and in the paper, absolutely crystal clear how hard we fought for a different referee because of my concern that this referee is biased against the private option. And whatever numbers this referee puts together reflect that bias — and that has not changed. Nonetheless, this referee has done a fantastic job of the work, of being interactive, of being honest, showing all sides, and crunching the data — notwithstanding the fact that their bias shows in how they calculated those numbers with regard to the private option. You can conclude whether or not that turns out at the end of the day to be quite fortuitous.

Specifically on the private option, what's the biggest thing that needs to change from the policy we have now to whatever version of the private option goes into effect in 2017 and beyond?

There's three things. The first is more encouragement of work. These are mostly able-bodied folks. We've got to help them move from dependency to being able to be more independent, so there's got to be a focus on more work. Number two: more personal responsibility. People on other health care plans have to pay co-pays, they have to know when to see a primary care physician instead of the emergency room. We need more personal responsibility like that for the population in this program too. And the third thing — these are all related to each other — is healthy behaviors. It's not right to expect the people of Arkansas to pay for somebody who is not going to do any of the things that we know will help improve their health, and instead of that are going to do things that abuse their health.

Now the question is not what direction we want to head. The question is how far can we get on those three metrics. The Stephen Group was very helpful and productive in designing 19 specific recommendations that we can request the federal government give us, and we ought to be able to get them substantially approved.

Then to get even further down the road, for example requiring work or something like that — we know that this administration will not do it. ...

But you'd like to try if you get President Rubio.

Right. So the idea is these two buckets of improvements. We go and fight like crazy to get as much as we possibly can — at an absolute minimum, we should be able to get all of the substance that's in the in-the-box recommendations. Then we come back again with the new administration, whether it's a Republican or a Democrat, we fight to get more of those out-of-the-box things.

There are real substantive changes that the Stephen Group is proposing to the private option, but it still uses Obamacare money to fund a coverage expansion. It keeps that in place. Is there a political appetite to approve that in the legislature?

The answer is time will tell. I never want to speak for how anyone else is going to vote or feel about things other than me. Certainly from the discussions I've had, and if you watch the task force meetings, the heated discussions have focused more on managed care, but that doesn't mean that the other issue's gone away.

We're working on the most unique, most advanced, most innovative solution to dealing with Obamacare — which is a better solution to dealing with Obamacare than Texas Obamacare or Mississippi Obamacare or Louisana Obamacare or Florida Obamacare. All those Obamacares are worse Obamacares than the unique approach we have in Arkansas, in my view. We were No. 1 out of 50 states in dealing with that bad policy that came down from Washington.

I don't think anybody is ready to jump up and down and say "yes, yes, yes" until the feds come back and say what they're going to allow. I think this process will continue through until we actually see the waiver approvals that come back from the feds.

From the very beginning I've fought for as much of this as we can possibly get. So to me, this is merely a continuation of what I've always fought for. The reason I'm open to doing a deal is because of the money being taken out of Arkansas, all part of that law that the Democrats in D.C. passed. I've got to play on the field of battle that exists. I can't exist in a fantasy where I can rewrite federal laws.

As you say, the most heated division on the task force hasn't been about the private option, it's been about whether to use managed care for high-cost populations in the traditional Medicaid program — a much bigger slice of the Medicaid spending pie. If we're talking about almost $2 billion in projected savings over five years, stakeholders are worried about taking the hit.

The way it's designed should be such that providers, patients and taxpayers all win. That's easy for me to say. You can make all those arguments, but you and I both know that there are some people that would say, "Oh yeah but over here this person doesn't feel very good about the changes." That element of uncertainty makes people question change.

The reason this is so controversial, I'll go right back to where we were at the beginning of the discussion: the Herculean difficulty associated with bending the cost curve. There is very little way to have a conversation with any human being that suggests that the world is going to change around you and a big part of the goal is so that not as much money is flowing into this space. There's no way for a person to feel excited about that.

Support for health care reporting made possible by the Arkansas Public Policy Panel. For more information, visit arktimes.com/specialprojects.

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