Davy Carter Expects Private Option Funding Will Be Approved

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.

The University of Arkansas for Medical Sciences also supports the private option.

About half of its uninsured patients are eligible for insurance through the private option, according to UAMS’ Chancellor Dan Rahn.

“We believe the continuation by the private option next year would have a positive impact on UAMS’ clinical operation of $14 million,” Rahn said.

UAMS already is seeing more newly insured patients in its clinics and in other outpatient areas, Rahn said.

But the preliminary numbers don’t show much of a change in the percentage of newly insured patients in its emergency room. Through Jan. 28, 42 percent of patients were uninsured, while in January 2013, the percentage was 43 percent, according to UAMS. The number of patients with Arkansas Blue Cross & Blue Shield went from 8 percent in January 2013 to 10 percent through Jan. 28.

The Vote

Carter said favoring continuation of the private option is not the same as favoring “Obamacare.”

“Most everybody, including myself, is unhappy with the Affordable Care Act,” he said.

If the Legislature could vote to make health care reform go away, it would, Carter said. But then, “where do we go back to?” Carter said. “The default position is really bad.”