Private Option Will Work, Save Money (Ray Hanley Commentary)

by Arkansas Business Staff  on Monday, Jul. 22, 2013 12:00 am  

Ray Hanley

I read with interest Dan Greenberg’s critique of Arkansas Business Editor Gwen Moritz’s recent commentary on the state’s new “private option” Medicaid expansion and its critics. While I have the utmost respect for those who opposed the expansion, I feel obligated to respond to his July 15 commentary.

While Greenberg said the questions he asked “pose difficulties” for those who support the private option, it’s in fact not the case. We know the expansion will work because the state has a proven, time-tested model: ARKids First. I was the Medicaid director in 1997 helping Gov. Mike Huckabee and state Sen. Mike Beebe create ARKids First, which has provided affordable health coverage to more than 100,000 children. Arkansas has been recognized on a national scale for this program, and there are few who would argue against its success.

In terms of funding, Greenberg asserted Arkansas would be on the hook for hundreds of millions of dollars when the federal share of the private option costs dips to 90 percent. This ignores the fact that the private option is projected to save the state $359 million in spending on uncompensated care at hospitals and generate an estimated $254 million in state tax revenue connected to the additional health care spending in the state between 2014 and 2021. It’s money that will offset the cost of expansion when the state is required to fund 10 percent of the cost in three years.

But the expansion isn’t just about dollars. More importantly, it is about giving more than 200,000 low-income Arkansans greater access to health care than ever before by making it affordable. I’m reminded that the reason most Arkansans claim personal bankruptcies is due to medical bills. Giving families good insurance to help avoid those debts will, among other things, help relieve financial pressure and increase the potential to get health problems treated in a timely way.

This brings us to the Oregon study Greenberg mentioned. He wrote the study “strongly suggests that there is no difference in actual, physical health outcomes between those covered by Medicaid and for those with no coverage at all.” However, what the study actually says is “[w]e found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions.” Those health measures are just a small aspect of a person’s physical health. What the study did find was that “it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain,” which are all very positive outcomes for health care consumers and the state.

However, I don’t need any study to tell me that giving low-income uninsured adults a private option insurance card will improve the health status of Arkansas. The United Health Foundation’s most recent health rankings place Arkansas as the 48th state in the country for overall health, and poverty plays a big role in that ranking.

We are facing a very real health care crisis in our state and nation. Ignoring the problem and doing nothing isn’t an acceptable course of action. The private option is our best approach to the major social issue of our time, namely how to do what every other advanced country in the world has done — ensure basic health care for all our families at a reasonable cost.

I’m proud of the bipartisan effort of state leaders to extend health coverage to more than 200,000 low-income Arkansans while helping to stabilize the state’s health care infrastructure and boost the state’s economy. Doing so took courage, and we are confident the expansion will be successful.

Ray Hanley is president and CEO of the Arkansas Foundation for Medical Care in Little Rock. Email him at RHanley@AFMC.org.

 

 

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