Gov. Hutchinson makes pitch for keeping Medicaid expansion — with changes | Arkansas Blog

Wednesday, August 19, 2015

Gov. Hutchinson makes pitch for keeping Medicaid expansion — with changes

Posted By and on Wed, Aug 19, 2015 at 11:57 AM

click to enlarge 'WE CAN DO BETTER"': Hutchinson says the current private option can be improved. - BRIAN CHILSON
  • Brian Chilson
  • 'WE CAN DO BETTER"': Hutchinson says the current private option can be improved.

Gov. Asa Hutchinson
made the case for continuing Medicaid expansion in Arkansas — in some form or fashion —  this morning. Hutchinson addressed a joint meeting of the Legislative Healthcare Reform Task Force and the Governor’s Medicaid Advisory Council.

UPDATE: Rep. David Meeks (R-Greenbrier) has provided a video of the governor's full remarks on YouTube.

Hutchinson began by reminding the group of some simple math. As federal contributions decline, the state will need to find $50 to $60 million in general revenue to continue the program. But that's nothing compared to the hit Arkansas would take if it opted out of expansion. "If you end Medicaid expansion, you’re going to be taking $1.4 to $1.7 billion out of our state’s economy," Hutchinson said. 

The governor said, "I opposed and continue to oppose the Affordable Care Act, because of the negative impact it's had on individuals, businesses and states — but we have to deal with the economic realities of Congressional action, Supreme Court rulings and independent executive action that expands the federal health care mission and limits flexibility."

After stating his continued opposition to the ACA, the governor then went on to argue for keeping the ACA-created Medicaid expansion by detailing the ways in which actually rejecting the ACA would hurt the state and its citizens.

"We can say no to Medicaid expansion ... We have that option. Again, the result is $1.4 to $1.7 billion drained out of our Arkasnas economy." More importantly, he said, "220,000 would have their health care coverage ended." As he said a little later in his remarks, "We know now that those covered ... are our friends, our neighbors, our families. We care about them."

Wait, 220,000? Aren't there closer to 250,000 people on the private option? Well, Hutchinson said, he believes that "after the redetermination process is complete" the final count will be down by about 30,000. He gave no concrete reason for this assumption, which is a little disturbing. The "redetermination process" refers to the troubled eligiblity verification situation at DHS that's resulted in tens of thousands of Medicaid beneficiaries losing their insurance despite being eligible. Given all the confusion and mistakes in that process, it seems like a bad idea to be making predictions ahead of time about how many beneficiaries will actually be determined ineligible. This has the dangerous ring of a self-fulfilling prophecy.

Hutchinson also reminded the task force that charity care is no solution. "The previous system that we relied upon prior to the private option has been dismantled ... Everything has changed since a couple years ago, prior to the private option."

True. He might have also acknowledged that relying on uncompensated care is no way to run a health care system, ACA or no ACA. But all those quibbles aside, Hutchinson's key point was this, and it's exactly the right one:

Now, if you conclude that we should not leave those 220,000 without some type of health care, then that brings you to another decision point. And that is: We need to pay for their coverage as a state and absorb those dollars out of our state revenue budget, or we do it in partnership with the federal government. I have not talked to many that believe we can absorb the coverage of 220,000 out of state general revenue. If you reach that conclusion that we cannot do that, then that leaves you with only one option.

If we continue to provide care for the 220,000, we have to have some kind of Medicaid expansion with a combination of federal and state dollars.

However, Hutchinson said "we can do better" than the current private option. The heart of his critique of the existing program: "The private option does not have enough controls to incentive work." He wants to see more cost-sharing.

He suggested seven points to "improve" the program, though he also said the recommendations to the task force were neither complete nor comprehensive, and that he expected the legislature to make changes:

1. Implement mandatory employer-sponsored insurance premium assistance. "There are many employees that have employer-sponsored insurance available that is ACA-qualified, but the employee opts out of the employer-sponsored plan so they can get the coverage on the private option," he said. The governor said the state needs to mandate that private option-eligible people take employer-provided insurance whenever it's available, but provide premium assistance to employers to assist with deductibles and co-pays. 

2. Increased cost sharing for beneficiaries above 100 percent of the poverty line, in the form of premiums. These first two items would require an expansion of the 1115 waiver from the federal government.

3. Some sort of work training required as condition for coverage. Hutchinson said this would not require an expanded waiver.

4. Eliminate non-emergency transportation coverage. Hutchinson said it would save $14.7 million per year. Hutchinson said

5. Limit access to private plans to working people. This might be the most significant suggestion and also the weirdest. Hutchinson suggested establishing a certain income line as a cutoff for the private option (that is, Medicaid-funded private insurance); below that income line, we'd put people on traditional Medicaid. He said this would result in significant cost savings. (In that case, might it not be be better to go with traditional Medicaid for everyone below 138 percent of the poverty line, as originally envisioned by the ACA?)

6. Implement or expand various cost savings ideas for Medicaid: This might include managed care, lowering Medicaid reimbursement rates and expanding the state's payment improvement initiative.

7. Strengthen program integrity. That is, patrol the private option rolls more vigilantly. He projected that when the dust settles after this messy round of Medicaid eligibility verification concludes, private option rolls will have declined by some 30,000 people.

David Ramsey is traveling today, but will undoubtedly have much to say about all this once he gets to a computer. 

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