Chamber of Commerce is spending campaign cash to protect private option | Arkansas Blog

Friday, February 12, 2016

Chamber of Commerce is spending campaign cash to protect private option

Posted By on Fri, Feb 12, 2016 at 9:46 AM

The Arkansas State Chamber of Commerce backed the private option when the policy emerged as a bipartisan compromise between the Beebe administration and leading Republicans in the legislature back in 2013. Now, they're opening their pocketbooks to keep it around. Steve Brawner of Talk Business reports

The Arkansas State Chamber of Commerce for the first time is making independent expenditures in state legislative races. The expenditures are paying for mailers backing candidates who support Gov. Asa Hutchinson’s Medicaid expansion plan, Arkansas Works.

Chamber President and CEO Randy Zook said Thursday that the expenditures were being made in “a couple, three Senate races; a couple, three House races.” He said the expenditures were being made to “people who have been targeted by other groups for defeat because of that single vote.”

Those "other groups" Zook references are Americans for Prosperity and Conduit for Action, a pair of conservative advocacy groups that are pouring money into a handful of races to try to pick off Republican incumbents who backed the private option. These primaries could be a key political signal for the future of the private option, the state's unique version of Medicaid expansion that uses Obamacare funds to purchase private health insurance for low-income Arkansans. The private option needs supermajorities in both houses of the legislature in the coming special session in April in order to continue. Margins are said to be extremely tight.

Gov. Asa Hutchinson is trying to rally support for the policy (he calls his slightly tweaked version "Arkansas Works"). While anti-Obamacare Tea Party groups are trying to pressure Republicans (some of whom campaigned explicitly against the Medicaid expansion) to end the coverage expansion and strip 250,000 Arkansans of their health insurance, the business community is pushing for the continuation of the policy. That's largely because continuing the private option would save the state more than $400 million between 2017 and 2021, according to a consultant hired by the state, as well as pumping billions of federal dollars into the state economy. The fact that the Chamber is taking the unusual step of making independent expenditures in state legislative races helps highlight the economic stakes in the battle to come over the PO. 

The other big driver for the Chamber: the governor's plan for $750 million over ten years in state spending on highways (which will bring another $2 billion in federal matching money). That plan is entirely dependent on continuing the private option, according to Hutchinson, who said his plan is "not workable if we don't have access to federal funds that are part of the Medicaid expansion." The governor's repeated assertions that the PO and improving roads are "tied together very carefully" could rally powerful constituencies to push even harder for the PO — and the net savings for state revenue that come with it — because of the highway money at stake. 

Ending the private option (or whatever you want to call it) "would be a colossal failure of common sense,” Zook told Talk Business

Continuing the private option will be a tough slog given the makeup of the legislature and the political pressure from right-wing advocacy groups. But there will be a lot of powerful stakeholders pushing to keep the expansion in place: the Chamber and other big players in the business community, Walmart, hospitals, the insurance companies. And the list of stakeholders making noise will grow once the governor releases his two budgets — one with the PO and one without. The latter is likely to have major cuts, with pain for municipalities, higher ed, and more. 

Sen. Jim Hendren, who said he won't make up his mind until he sees the final "Arkansas Works" plan, told me a few weeks ago that many are underestimating the hits that will come to the budget if the PO goes away: 

I don’t think some people understand that it's going to be hard. There’s going to be pain. There’s going to be college presidents, and superintendents and city mayors and councilmen, and there’s going to be a lot of people who are upset if we end up having to make those kinds of cuts to budget. So there’s no question that the stakes are high and the consequences in either direction will be monumental.
Support for special health care reporting made possible by the Arkansas Public Policy Panel.

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