Carter skeptical of savings from Medicaid expansion | Arkansas Blog

Friday, January 11, 2013

Carter skeptical of savings from Medicaid expansion

Posted By on Fri, Jan 11, 2013 at 3:40 PM

FULL HOUSE: A big crowd came to hear House Speaker Davy Carter at Clinton School today.
  • Duncan Baird
  • FULL HOUSE: A big crowd came to hear House Speaker Davy Carter at Clinton School today.

Incoming House Speaker Davy Carter (R-Cabot) spoke at the Clinton School of Public Service today. As expected, Medicaid expansion was the hot topic.

Carter sounded the same skeptical note we’ve been hearing from moderate Republicans — yes, the Feds are offering a great deal paying for expansion for the next three years, but Carter worries about the fiscal impact of the 10 percent share that Arkansas will have to contribute to expansion down the road.

In fact, the Department of Human Services projects that the savings gained from expansion would be larger than the costs, leading to savings for the state’s bottom line to the tune of more than $700 million between 2014 and 2025 (and projected savings continue even after Arkansas has to chip in).

Carter addressed the DHS study, saying that “we don’t agree on those sets of numbers.” The study projects savings in three areas and Carter gave his take on each.

First, some people currently being covered by the state Medicaid program will move in to the expansion population with the higher federal match rates (that amounts to $65 to 89 million per year). “That’s the most credible part of that economic analysis,” Carter said.

Secondly, the state projects to save money by avoiding the costs of uncompensated care as more people are covered ($44 to 58 million per year). Carter said that savings on this front were somewhat credible, but asked “how are you calculating the uncompensated care? Show us the formula.”

Finally, the state projects to gain tax revenue because of the hundreds of millions of dollars of federal money that would come in to the state with expansion ($30 to 35 million per year). Carter referred to this as “funny money” and complained that it represented a “quite sizable” portion of the predicted savings. When I asked him whether he really thought there would be no state tax revenues associated with $600 to $800 million a year in federal stimulus, he said “that’s not something tangible we can bank on….Those are cherries on top. I hope that happens…but you can’t make decisions on that.”

Carter said that contrary to DHS, his own prediction was that expansion would cost the state an additional $80 to $100 million per year once the federal match goes down to 90 percent.

The other major point that Carter stressed on the Medicaid expansion front: He and other Republicans are still holding out hope that the federal government will change the terms of expansion for Arkansas. The feds have already stated clearly that it’s all or nothing: if states want the generous matching rates that come with the Affordable Care Act, they must expand Medicaid all the way up to 138 percent of the federal poverty level.

Carter is hoping that Gov. Mike Beebe can somehow convince the feds to offer a “tailored plan, unique to Arkansas.” He said that legislators' “energy and efforts are going in to seeing if there’s any hope” on this front. "We're beyond…the all-or-nothing parameter….If it’s true that it’s all or nothing, it makes it extremely difficult to do.”

Does that mean that if the Feds don’t budge expansion is dead in the water?

“I’m not prepared to say that,” Carter said.

Other highlights:

Don’t worry Granny. Carter said that Republican legislators are committed to not allowing any cuts in the Medicaid program over the next two years. “Not going to happen.”

Term limits too short. He said that he thought term limits are not working and need to be extended, though he supported the idea of term limits in general.

Hospitals in financial trouble. “The hospital issue is grave…I’m a straight shooter. I don’t know that the state has an answer to that problem.”

Fighting the national debt from Little Rock. “As our colleagues in D.C. try to figure out how to balance our checkbook…those are real problems…I will tell you, I’m committed and my colleagues are committed to addressing these issues at the state level. If they’re not going to be addressed in Washington, we’re going to address them here.”

Pie in the sky (but a worthy goal!): “Our goal should be to have the least amount of citizens per capita that qualify for Medicaid than any other state in the union…we owe it to our citizens to provide them an opportunity for success.”

Deal with Medicaid expansion in the regular session "I don’t want to have a special session. I don’t know where that came from."

Beebe fan. “When history books are written, he will go down as one of, if not the, best governor in the history of the state.

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