Joint Public Health discusses Government Accountability Office report on private option | Arkansas Blog

Thursday, September 25, 2014

Joint Public Health discusses Government Accountability Office report on private option

Posted By on Thu, Sep 25, 2014 at 10:33 PM

The Joint Public Health Committee met today and got its standard progress report on the private option. The rump group of diehard aginners are titillated by anything that might be construed as bad news for the private option, so these meetings are less about information gathering and more about grandstanding. Legislators, often with a vague grasp of the relevant details, play Perry Mason and grill state officials. Hilarity ensues. 

The topic du jour was the report released by the federal Government Accountability Office earlier this month, which argued that the feds failed to ensure that the private option was "budget neutral" — that is, that the state's alternative approach wouldn't be more expensive than regular old Medicaid expansion would have been. You can read all about it here, or if you prefer the short version, here's my take in 23 tweets

You can understand why private option opponent and Public Health co-chair Cecile Bledsoe was excited to talk about the GAO report. It was critical of the waiver process that led to the private option. Fun! But the report wasn't anything new. There was no new data. It was the same old argument that has been debated about the private option from the get-go. The Arkansas Department of Human Services argues that traditional Medicaid expansion would have required raising reimbursement rates to achieve sufficient access; therefore expanding coverage would cost the same either way. GAO (and plenty of skeptics from the left and the right) argue that the evidence isn't clear that Medicaid rates would have had to go up; therefore the private option would be more expensive because private insurance costs more. 

There is no way right now to definitively answer this dispute, which is over a hypothetical scenario — what would have happened if the state did something (expand traditional Medicaid) which the state did not in fact do. Several legislators today seemed to be under the impression that GAO had described something that had happened, or that their report had settled the debate. In fact, GAO, like DHS, is making assumptions about what might have happened in a counterfactual scenario, although they're making very different assumptions. 

The most surreal moment in today's meeting came when Rep. Joe Farrer asked, "When did Arkansas know that the private option was going to cost more than traditional Medicaid?" DHS Director John Selig responded that we don't in fact know that, and that state officials believe the opposite. Farrer continued to assert that "we did know" and asked, three times, when state officials knew. State officials responded with...well, with the same argument they've been making for a year a half.  

It's a little bit ironic that the anti-private option diehards have latched on to the GAO report and the comparison with Medicaid expansion. After all, if you believe that Medicaid is significantly cheaper than private insurance (and the historical evidence is on your side there), that would seem to argue for...traditional Medicaid expansion! Indeed it's precisely the argument that many on the left made when the private option first emerged. The aginners have taken the odd route of putting tremendous focus on comparing the costs of two different policies they don't want. 

The best question came from right-wing private option foe Rep. John Payton. "On the one hand, a program pays for the medical needs of a population. On the other hand, the same population with the same medical needs pays a third party to cover those needs with a profit margin. How can that be budget neutral?"

Fair question! This is of course the critique liberals often make about privatization schemes. One of the things that makes the private option debate so fun is how it flips a lot of ideological expectations in surprising ways. Who'd have thought that Payton would be front and center arguing that public programs are more cost-effective than profit-seeking private companies? (Selig answered with the standard-order line about the private sector being more efficient.) In another context, you'd swear Payton was an old-line liberal, arguing for traditional Medicaid expansion. 

Rep. Douglas House had a different approach: "I'm not distracted by a comparison of Medicaid costs versus private option costs any more than I'm concerned about how it compares to a pack of cigarettes and a six-pack of beer."

Bledsoe closed things by saying, "This has been a very interesting discussion about the GAO [report.]" I give that claim 4 Pinocchios. 

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