The Focus Is On Medicaid as Legislative Session Begins Today

by Andrew DeMillo  on Monday, Jan. 14, 2013 7:33 am  

Medicaid is the biggest issue facing members of the 89th General Assembly, who gather Monday.

LITTLE ROCK — Leaders of the Arkansas House and Senate say most questions about the state budget, tax cut proposals or a possible special session depend on how legislators address a Medicaid program that already receives nearly one out of every five tax dollars the state receives in its general revenue budget.

"That issue is going to drive, in my opinion, almost every other monetary issue," incoming House Speaker Davy Carter, R-Cabot, told reporters last week.

Medicaid is the biggest issue facing members of the 89th General Assembly, who gather Monday. For the first time in 138 years, Republicans will control the state House and Senate. It's also the last regular legislative session for Gov. Mike Beebe, a Democrat who is barred by term limits from seeking re-election next year.

The most immediate question legislators face is how to fill a projected $138 million shortfall in Arkansas' Medicaid budget. State Human Services officials have blamed the shortfall partly on the program's growing costs and a reduction in the federal matching rate tied to the state's per-capita income.

The shortfall comes even after Beebe proposed $90 million in additional general revenue and $140 million from the state surplus to help the program.

To cover the deficit, DHS officials have proposed a series of cuts that include removing thousands of seniors from nursing home care, eliminating an insurance program for low-income workers, cutting reimbursements to providers and eliminating non-emergency dental care for adults.

Whether those cuts are necessary is up in the air. Carter and incoming Senate President Michael Lamoureux last week said they believe that the cuts can be avoided by using the remainder of the state's expected $300 million surplus and growth in revenues in next year's budget.

"My personal opinion is, 'No, the cuts to Medicaid are not going to happen,'" said Lamoureux, R-Russellville.

Beebe has said he's open talking with Carter and Lamoureux about whether to use more of the state's surplus, but said he's reluctant to rely on more one-time money for ongoing programs in Medicaid. He also noted that the more money that's used for Medicaid, the less would be available for economic development, construction projects and other items normally funded with the state surplus.

"Can we do some more? Of course you always can," Beebe said. "But you make trade-offs when you do that."

Legislators are grappling with the Medicaid shortfall while they're also weighing whether to expand its rolls by 250,000 people. Beebe is urging the Legislature to support expanding the program's eligibility under the federal health care law, but to do so will require a three-fourths vote in the House and Senate.

The health care law calls for the federal government to pay the full tab for the Medicaid expansion when it begins in 2014. After three years, states must pay a gradually increasing share that tops out at 10 percent of the cost. The U.S. Supreme Court in June upheld the health care law, but justices said the federal government could not take away states' existing federal Medicaid dollars if they refused to expand.



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