Gov. Asa Hutchinson continues negotiations with feds on future of private option, says focus is not "punitive side" | Arkansas Blog

Thursday, February 4, 2016

Gov. Asa Hutchinson continues negotiations with feds on future of private option, says focus is not "punitive side"

Posted By on Thu, Feb 4, 2016 at 2:40 PM

Steve Brawner at Talk Business reports on vague comments from the governor on negotiations with the feds over continuing the private option

“We understand their limitations, and they understand what we want,” he told reporters. “They’re going to work to give us as much as they can within their own constraints. I’m going to continue to push, and this conversation hopefully will lead us to a strong Arkansas Works program.”

Hutchinson said his fundamental changes to the private option include incentivizing work; greater individual responsibility such as requiring higher-earning recipients to pay 2% of their incomes for insurance premiums; encouraging the utilization of employer-based insurance instead of government insurance; and program integrity.

“Those are the four elements of it,” he said. “They’re still intact. None of those have been rejected. But we want to be able to push the envelope in each one of those to get as much as we can to make those successful.”

Hutchinson said the state’s efforts will focus on incentives rather than punitive measurements because of the Obama administration’s requirements.

“The punitive side is not something that this administration is interested in, so we’re having to look at incentives, and we don’t want to overload a program with incentives, so we’re looking at options to make this stronger,” he said.

Again, the broad outlines of what the governor is asking for should be doable. I note that he doesn't specifically mention the asset test (imposing a fee on beneficiaries with significant assets in order to stay in the program) — that's almost certainly a no-go with the feds. 

The big takeaway here is downplaying "the punitive side." Hutchinson already walked back the idea he pushed a few months ago of a punitive "lockout" — barring beneficiaries from getting back onto coverage for six months if they failed to pay premiums. I'd say the question is at this point is whether the premiums will be enforceable. In other words, will people be kicked off of coverage if they don't pay, or will there just be incentives in place if they do pay (like additional benefits, such as vision and dental)? What income levels will premiums be assessed at? Will premiums be waivable if beneficiaries comply with wellness or work-referral requirements? 

These are the sorts of details to look for when the governor presents his final agreement to the Health Reform Legislative Task Force on Feb. 17. But the governor's downplaying of "the punitive side" suggests that the feds are holding their ground and we won't see a radical change in terms of how much the Obama administration is willing to bend for red states. 

Support for special health care reporting made possible by the Arkansas Public Policy Panel.

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