Davy Carter Expects Private Option Funding Will Be Approved

by Mark Friedman  on Monday, Feb. 3, 2014 12:00 am  

Davy Carter

Davy Carter, speaker of the Arkansas House of Representatives, said he thinks legislators will hold their noses and vote to continue funding the “private option” Medicaid expansion during the fiscal session that begins Feb. 10.

“We will continue to fund it because it makes more sense to do so than not,” Carter, R-Cabot, told Arkansas Business last week. “I think once we talk about these things that logic will prevail.”

The Arkansas Hospital Association hopes he’s right.

“It’s definitely no secret that the Hospital Association and all of Arkansas’ hospitals really need the private option to be funded,” said Jodiane Tritt, the AHA’s vice president for government relations.

The private option uses federal funds to pay for private insurance for Arkansans who earn up to 138 percent of the federal poverty level. The federal government will pay all of the costs for the expansion through 2016, and then gradually decrease its share of the funding until the split is 90 percent federal and 10 percent state, according to the Arkansas Department of Human Services.

As many as 250,000 Arkansans may be eligible for private option coverage. As of last week, about 88,000 Arkansans have received health insurance because of the private option, DHS said. And another 10,000 people are awaiting health insurance through the private option, DHS said.

The current private option funding will remain in place until June 30. The upcoming vote in the Legislature is to continue the funding on July 1.

Hospitals Face Big Losses

If the private option isn’t continued, it could cost hospitals millions in lost revenue, Tritt said.

Hospitals across the country are already facing the loss of billions of dollars due to lower reimbursements per patient. To help pay for the Affordable Care Act, the growth rate in Medicare reimbursements took a hit. For Arkansas hospitals, that means missing out on $2 billion to $2.5 billion in Medicare revenue during the next decade.

The Arkansas Hospital Association has estimated that without the private option, hospitals would be called on to provide about $400 million in uncompensated care in 2014.

But with the private option in place, the uncompensated care would be lowered to $200 million, Tritt said.

 

 

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