Gov. Asa Hutchinson announces details on plan to continue private option, okayed by feds | Arkansas Blog

Wednesday, February 17, 2016

Gov. Asa Hutchinson announces details on plan to continue private option, okayed by feds

Posted By on Wed, Feb 17, 2016 at 3:54 PM

click to enlarge HUTCHINSON: “As powerful and determined as we are we cannot change federal health care policy by simply being stubborn." - BRIAN CHILSON
  • Brian Chilson
  • HUTCHINSON: “As powerful and determined as we are we cannot change federal health care policy by simply being stubborn."
Gov. Asa Hutchinson today presented his plan for the continuation of the private option, with conservative tweaks, to the Health Reform Legislative Task Force. The governor released a letter from federal Secretary of Health and Human Services Sylvia Burwell giving broad approval for his slate of requested changes. 

However, the feds turned down Hutchinson's controversial request for an asset test, which would have imposed a fee on beneficiaries with substantial assets, such as a house worth $200,000. Burwell's rejection of this idea was no surprise. Asset tests were explicitly banned for the Medicaid expansion population by the Affordable Care Act. “That’s a non-starter with this administration,” Hutchinson said.

The governor said that he would have liked to have gone further in establishing "personal responsibility" requirements on beneficiaries. “There were some fundamental differences between myself and Secretary Burwell,” the governor said. “We butted heads.” However, Hutchinson said that he was happy with the progress they made within the limitations of "current federal policy." He said that he hoped that further changes might be possible under a future presidential administration. 

The governor's tweaks include premiums and co-pays for beneficiaries who make more than the federal poverty level, work referral programs for unemployed beneficiaries (though not work requirements), and more use of employer-sponsored insurance. The new policy framework, which Hutchinson calls "Arkansas Works," may include positive incentives to encourage relevant beneficiaries to pay premiums or participate in job training programs, but it won't feature punitive consequences. Beneficiaries will still remain covered even if they fail to pay required premiums or don't take advantage of job training programs. The governor said that there were further details and nuances to come but provided a document to the task force today laying out key elements in Arkansas Works.  

The governor made a similar pitch to the task force as he made in a press conference yesterday. He stressed that if the state refused to accept the federal money to continue the Medicaid expansion, it would face an immediate hole in the budget of more than $100 million. He argued for the importance of continuing coverage for the 250,000 Arkansans dependent on the private option for health insurance, and he said it would be unfair if middle-class Arkansans continued to receive Obamacare subsidies while the poor were left out in the cold. He noted that no matter what the state decides on expansion, Arkansas is paying in for the federal health care law — more than $1 billion in Medicare reimbursement cuts, increased investment taxes, and other pay-fors. The state can't afford to pay for Obamacare without getting the billions in expansion dollars in return, he said. 

Hutchinson said that he hoped that a new administration would dramatically change Obamacare and offer states more flexibility (Hutchinson believes that coverage options should continue for the expansion population, but states should receive block grant funding to figure out their own method to offer coverage). Until then, he said, Arkansas Works was the best option for the state under current law. “As powerful and determined as we are we cannot change federal health care policy by simply being stubborn,” he said.  

Even with today’s announcement that the feds are mostly on board with Hutchinson’s conservative revisions, getting legislative approval to continue Medicaid expansion won’t be easy. That's thanks to a quick in the state's constitution, unique in the nation, which requires a 75 percent majority of lawmakers in both chambers to approve certain appropriations. The governor said that the enabling legislation for Arkansas Works can pass with a simple majority when the legislature convenes for a special session in April. But a supermajority will be necessary to move forward in the fiscal session that follows, because a rump group of 26 percent in either chamber can block the entire Medicaid budget in order to kill the private option. 

“Secretary Burwell did not give me what I would like to see in the program,” said Republican Sen. Jim Hendren, chair of the task force (and the governor’s nephew). Hendren, a key vote in the senate, said he remained undecided. “I think it’s a step in the right direction, but I still have some real concerns. I fundamentally disagree with a program that just gives people stuff without any expectation of effort.”

Rep. David Meeks, a Tea Party conservative who previously opposed the private option, also said he was undecided. “I don’t like the fact that we’re having to take directions from the federal government and we’re not going to get the flexibility that we need,” he said. “But in reality, the governor is right that if we don’t do it, we’ll have a $100 million budget shortfall.”

While there may be more to come on the fine print, the governor did offer more details today on just what Arkansas Works will looks like, which I'll cover in a subsequent post. 

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

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