Private option, GOP-style. More bureaucracy and confusion | Arkansas Blog

Monday, January 19, 2015

Private option, GOP-style. More bureaucracy and confusion

Posted By on Mon, Jan 19, 2015 at 10:31 AM

click to enlarge GETTING READY: Asa Hutchinson posed for an official portrait last week. This week, he gets down to serious business, such as health care. - GOV. HUTCHINSON TWITTER
  • GOV. HUTCHINSON TWITTER
  • GETTING READY: Asa Hutchinson posed for an official portrait last week. This week, he gets down to serious business, such as health care.

Gov. Asa Hutchinson
gives his long awaited pronouncement on health care Thursday. If he doesn't recommend continuation of the private option expansion of Medicaid through Obamacare — albeit with a new name and a new conservative spin — he's been the best poker bluffer in the world.

The unified Republican resistance to Obamacare has given way nationally to a parade of Republican governors that Asa Hutchinson seems likely to join. They say they are "reinventing" and "improving" the original model to create something even a Tea Party adherent could love.

David Ramsey has written about this change in tone for The New Republic.  He points out some inconvenient facts about the GOP's Obamacare 2.0. Tennessee, Arkansas, Iowa, Michigan and Pennsylvania are in this movement. Others are in the process of talking to the feds about more rule changes.

That’s good news for those states' poorer residents, who have been left to fend for themselves while state legislatures offer massive resistance to Obamacare. In practice, however, crafting plans that are ostensibly more conservative has tended to add layers of bureaucracy and administrative complexity. The Republicanized versions of Medicaid thus far have ended up more complicated, confusing, and possibly costlier than the program Republicans refused to expand in the first place.

Take, for example, Arkansas—the state that got the ball rolling for red states seeking GOP twists on Medicaid expansion with its privatized version known as the “private option.” Last month the state got approval for a byzantine new program, called Health Independence Accounts, that imposes co-pays on some beneficiaries unless they pay a small monthly fee. Those who have paid their fees are eligible, under certain conditions, for up to $200 to pay for the costs of private health insurance if their income goes up and they transition off of Medicaid. To run the program, the state will pay a third-party administrator about $15 million annually (covered by the feds as part of the cost of expansion).

The private option — though it was far better than the alternative of doing nothing — always had a flaw in its tout as a "market-based" solution. Rather than having a single-payer, efficient, lower-overhead government insurance program like conventional Medicare, the Arkansas plan dictated that private insurance companies get a profit cut. That means a greater overall cost. 

The "transformational nature" of additionally burdening poor people to instruct them on living more virtuously fits the majority mood. Republicans believe people who need assistance are generally unworthy (though many of them shout loud amens every Sunday in churches nominally built on the example of Jesus.) They think the poor are lucky ducks happy to get something for nothing. (Think of the 40 percent of Arkansas working taxpayers who make less than $21,000 a year, but are exempted from Hutchinson's proposed income tax cuts because he thinks they already get enough from government.)

Those lucky ducks may soon be confused lucky ducks. Writes Ramsey:

More complex programs can also be more confusing for beneficiaries. State officials in Arkansas have suggested that the Health Independence Accounts would serve as an educational tool, modeling how to be consumers of private insurance, but it's just as likely that beneficiaries will simply be baffled by the genuinely confusing structure and rules. Trying to latch GOP hobby horses onto Medicaid and low-income beneficiaries can make for an awkward fit—in practice, the HIAs aren’t much like private insurance, aren’t much like Health Savings Accounts, and don’t clearly incentivize the most cost-effective ways of using the health care system. To make matters worse, state Republicans have banned state-appropriated outreach funds to help eligible beneficiaries enroll in the private option and navigate the system

Ramsey quotes David Sanders and many others throwing around that misleading word "reform." A change is not necessarily a reform. Reform means make something better. Making something you've already received harder to hang onto is a reform? I think that's a philosophical, not empirical inquiry.

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