A Look at Medicaid Proposals Before Arkansas Lawmakers

LITTLE ROCK – When Arkansas lawmakers return to the Capitol this week, they’ll decide whether more than 250,000 people should keep their subsidized health insurance and whether private firms should manage some Medicaid services.

The Legislature is set to convene Wednesday for a special session focused on Gov. Asa Hutchinson’s proposal to keep and rework the state’s hybrid Medicaid expansion. The Republican governor is also asking lawmakers to approve his plan to have private firms manage Medicaid’s programs for the developmentally disabled and mentally ill.

Here are some details about the proposals on the session’s agenda:

WHAT IS THE HYBRID MEDICAID EXPANSION?

Arkansas’ Republican-led Legislature and Democratic governor three years ago approved the “private option,” which uses federal funds to purchase private insurance for the poor. The program was crafted as an alternative to expanding Medicaid under the federal health law, and Arkansas was the first state to win approval for such a hybrid approach.

WHAT CHANGES ARE BEING CONSIDERED TO THE PROGRAM?

Hutchinson is proposing renaming the program “Arkansas Works” and wants to add new restrictions that he says will help participants move up the economic ladder. He says participants who make at least 100 percent of the federal poverty level should pay a premium equal to 2 percent of their income. The legislation would require participants 21 and older enroll in employer health insurance, if available and if the employer agrees to participate, with the program paying for premiums and co-pays. The bill would also require that unemployed participants be referred to the Department of Workforce Services for job training and job search programs.

WHY DOES HUTCHINSON WANT TO KEEP THE PROGRAM?

Hutchinson ran for governor two years ago opposing the president and his health care law, but ducked saying what he’d do with the Medicaid expansion, which was already helping thousands. After having a task force study the program, Hutchinson said he wanted to keep the hybrid expansion. The Republican governor has said that dropping health coverage for thousands of poor Arkansans would be unfair, since those with higher incomes would still be eligible for insurance subsidies under the health law. He’s also warned that dropping the program will create a budget deficit of at least $100 million.

WHY ARE SOME LAWMAKERS AGAINST IT?

The expansion has sharply divided Republicans since it was created, and many GOP lawmakers have called it hypocritical to embrace a key part of the health care law they’ve repeatedly called for repealing. They’ve also said they don’t think the state can afford the cost when it has to begin paying for a portion of the expanded coverage next year. Democrats have traditionally supported the expansion, but are wary about some of the restrictions Hutchinson’s seeking.

IS THIS THE FINAL WORD ON THE EXPANSION?

No. Passing Hutchinson’s plan requires a simple majority in this week’s session, but the program still faces another obstacle. Continuing the expanded coverage will require approval of a budget bill in the fiscal session, and that measure needs three-fourths support in the House and Senate. The fiscal session begins April 13. The plan also must be approved by the federal government.

WHAT IS MANAGED CARE?

Hutchinson has proposed contracting with private firms to provide services for the developmentally disabled and mentally ill. Hutchinson has said the managed care plan will save the state $1.4 billion over the next five years, and has pledged to use some of the savings to cut in half the waiting list for home- and community-based services for the developmentally disabled.

WHO’S OPPOSED?

Hutchinson faces resistance from Democrats and some Republicans in the Legislature who say they’re worried about the impact managed care would have on Medicaid patients and providers. A group of lawmakers opposed to Hutchinson’s plan have offered a competing proposal where the state would contract with private companies to coordinate services for the developmentally disabled and mentally ill. Under this plan, unlike Hutchinson’s proposal, the state would continue paying providers directly rather than through a private firm. Hutchinson has said he’s not putting that proposal on the special session agenda.

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