Correction: Sen. Missy Irvin is a Republican from Mountain View. The wrong hometown was given in this article.
The Senate voted 28-7 late Wednesday night to approve using hundreds of millions of federal dollars to purchase private health insurance for 250,000 low-income Arkansans, after a day of waiting and amendments.
The bill giving the state Department of Human Services authority to spend the federal money now goes to Gov. Mike Beebe’s desk. The House approved the appropriation bill 77-23 on Tuesday, after coming up six votes short on Monday.
The plan, called the “private option” at the Capitol, creates a program to allow people who make up to 138 percent of the federal poverty level to use federal Medicaid funds to purchase private health insurance from a government-run exchange.
To get to the 27 votes needed to pass an appropriation bill, sponsors agreed to change separate enabling legislation that had already reached the governor’s desk but had not been signed.
An appropriation, or authority to spend money, needs approval from three fourths of lawmakers in both chambers. The enabling legislation needs a simple majority vote.
The two enabling bills, which set up a framework for what the program will look like, were pulled from Beebe’s desk and sent back to the Legislature, so changes could be made that would make the program palatable to a handful of wavering lawmakers.
On Wednesday night the House and Senate Public Health, Welfare and Labor committees added the amendment to House Bill 1143 by Rep. John Burris, R-Harrison, and Senate Bill 1020 by Sen. Jonathan Dismang, R-Beebe. The bills are identical.
The House bill was given final approval by a 71-22 vote. The Senate bill was not given final approval Wednesday night. The Legislature is expected to pass both by the end of the week.
The governor called the vote a victory for Arkansans.
“You’re going to have over 200,000 working Arkansans who could not afford insurance and didn’t have health insurance that are going to be covered. It’s huge for the hospitals, it’s huge for small business,” Beebe said. “This is not a victory for any individual, it’s not a victory for any group of folks. It’s a victory for the people of Arkansas.”
Beebe said the amendment makes explicit what he says was already implicit in the bill to assuage some lawmakers’ fears, such as specifying which federal waiver the state will ask for.
“We had no problem with that. It delayed it a little bit, but that’s OK. That was part of the whole process,” he said.
The amendments also added Sen. Missy Irvin, R-Mountain Home, to the bill’s list of co-sponsors. Irvin opposed the private option before the bill was amended.
“She wanted to make sure that there was language actually in the bill that said what everybody’s been saying, and so it’s in there,” Beebe said.
Burris said the changes weren’t made purely for political reasons.
“This just really clearly lays out the steps, one, two, three, in a more succinct way,” Burris said. “It’s good to have it in the bill. I still think it makes it better policy, it certainly doesn’t hurt the politics.”
Some opponents dislike the private option because it arose from the Medicaid expansion plan outlined in the federal 2010 Patient Protection and Affordable Care Act. The U.S. Supreme Court, on a 5-4 vote, upheld most of the Act in June, but struck down a provision which would have required states to expand their Medicaid programs.
Opponents of the legislation don’t want Arkansas to accept billions of federal dollars over the next decade to implement the program, a move that would add to the federal debt.
Sen. Jim Hendren, R-Sulphur Springs, told senators the bill would allow for the largest expansion in state government history.
“At some point we as a people have to say, ‘enough,’” he said.
Supporters argue that the state can recraft the Medicaid expansion provision and at the same time shield the state from some of the health-care act’s other effects. They question how the state can turn down health care for a quarter-million uninsured Arkansans - and the hundreds of millions of federal dollars that will come with it each year.
Wednesday’s amendment specifically states that the Department of Human Services will seek a comprehensive waiver under Section 1115 of the Social Security Act. The waiver in essence exempts the new program from meeting the federal Medicaid requirements.
Sen. David Sanders, R-Little Rock, said the changes address some concerns that have been raised.
“There has been criticism that the program that this bill put in place is simply Medicaid by another name,” Sanders said. “But that was never our intent.”
The amendments also specify that the state will not seek permanent amendments to its Medicaid State Plan. The state plan is the contract between the state and federal government detailing how the state will run its Medicaid program. For example, Arkansas’ traditional Medicaid program covers adults up to 17 percent of the poverty level who have children on Medicaid. It is difficult to change the plan. Some members feared that the state would change its state plan and be forced to provide the private option to 250,000 Arkansans from now on, even if the state couldn’t afford it or federal funding plunged.
The bill requires the state to seek approval by 2015 for an optional Health Savings Account program. Participants could choose higher deductible plans, but would keep some of the savings.
The bills all state that if the federal government doesn’t grant requested waivers or allow the state to implement the program exactly as laid out in the bill, then the private option will not go into effect and those 250,000 people will not have help getting insurance.
Beebe stressed that the state Department of Human Services worked with the federal Health and Human Services Department while constructing the amendments Wednesday to ensure that the federal government would be likely to approve the private option.
Burris said the amendment shouldn’t surprise the federal government.
“This is all happening in consultation. There’s not anything here that should be a big red flag to [federal Health and Human Services.] There’s nothing here that’s just going to sink the ship,” Burris said.
As amended, the bills also state that Arkansas wants confirmation from the federal government that employers will not be penalized for not providing insurance for the population served under the exchange.
Some members said they were concerned about how business owners would be affected if Arkansas didn’t act on the private option.
A March 13 study by the Jackson Hewitt Tax Service estimated that Arkansas businesses with more than 50 full time employee that don’t provide health insurance would be hit with $26 million to $38 million in federal penalties when their employees seek subsidized insurance in the state’s online health-insurance pool.
The study assumes that employers would be fined $2,000 to $3,000 per employee.
“This alleviates those employers from that,” Sanders said. He said if the private option isn’t approved or ends, employers will face that cost again.
Burris also cited concerns about the fines.
“We simply want to make sure that is confirmed in writing and authenticated from the federal government,” he said.
Also Wednesday, the Senate Insurance and Commerce approved House Bill 1508 by Rep. Mark Biviano, R-Searcy, which would take the federal-state insurance exchange and place it under the control of a state-level nonprofit in 2015. The state missed the deadline to take control of its exchange before 2015.
The Affordable Care Act required the creation of private-insurance marketplaces - called exchanges - from which people can pick their own insurance plans. Arkansas lawmakers wouldn’t approve a state exchange in 2012 so the state Department of Health partnered with the federal government to create one. Over 200,000 Arkansans will purchase their own insurance through the exchange, along with the 250,000 who would use federal funds to buy plans if the private option is approved.
Front Section, Pages 1 on 04/18/2013