LITTLE ROCK — An answer from the federal government on whether Arkansas can “partially” expand Medicaid is unlikely before the end of February, and details of how it would work remain murky to many legislators and policymakers.
But the politics of a possible partial expansion already were crystallizing Thursday, a day after Gov. Mike Beebe said he would ask an old political friend, U.S. Department of Health and Human Services Secretary Kathleen Sebelius, if any wiggle room is available for a smaller expansion.
In December, Sebelius’ agency said if states choose to participate in the expansion, they must do so for up to 138 percent of the poverty level, or income of about $15,415 for an individual. In Arkansas that means up to 250,000 more would get Medicaid coverage.
Many state Republicans said Thursday, on and off the record, that the possibility of a partial expansion - perhaps to 100 percent of the poverty level, covering about 160,000 people - reinforces their wariness about making any deal on Medicaid before President Barack Obama’s administration more clearly outlines the boundaries of the debate.
A sweeter deal could emerge, they say, and that makes a good argument for delaying a decision and possibly tackling it in a special legislative session.
“I’m not trying to be evasive, but [a federal response would] take the handcuffs off and let us get to work, and then we can get to a number,” said Michael Lamoureux, the Senate president pro tempore.
Lamoureux, a Russellville Republican, wouldn’t say what that number is.
“I don’t want to be pinned down to anything,” said Lamoureux.
Democrats said that endless delays cost the state in its early attempts to set up a state-run insurance exchange under the Patient Protection and Affordable Care Act. They’re leery of a new attempt to run out the clock, they say.
“Last time, we missed the mark on the exchange,” said Rep. Reginald Murdock, a Marianna Democrat who is the vice chairman of the House Public Health, Welfare and Labor Committee. “This waiting, waiting, waiting, investigating doing things differently - invariably, you miss the mark.”
For months, 100 percent of the poverty level, or $11,170 a year for an individual, has been the “number” most widely discussed as being acceptable to some moderate Republicans and possibly some Democrats.
One advantage to that plan, advocates say, is that those making above that income level can buy heavily subsidized health coverage on the insurance exchange.
But how very poor people could afford exchange coverage under current subsidies is a “quandary,” said Ray Hanley, state Medicaid director for three governors, and current president and CEO of the Arkansas Foundation for Medical Care.
“This is a key, key question: What happens to the people between 100 and 138 percent of [the] poverty [level]?” asked Hanley.
Bigger federal subsidies for the exchange is the likely option, essentially cost-shifting Medicaid expansion from the state to Washington, D.C., he said.
“And then you would have a long line of governors wanting the same deal,” Hanley said.
For the approximately 50,000 Arkansans who would fall in the “island” between 100 percent and 138 percent of the poverty level, the federal subsidies would pay for all but between 2 percent and 4 percent of their premiums. That would still be more expensive than Medicaid, and perhaps too high for many people without bulked-up federal subsidies, Hanley said.
“It’s a really hard question. We’re talking about really low income people, struggling to meet their daily obligations,” said Cynthia Crone, the exchange’s planning director. “But it would be more affordable than what they have today.”
The exchange subsidies don’t contain any state dollars. They are “advance” federal tax credits. If someone didn’t make a monthly premium payment,the Internal Revenue Service would pay it for them.
At the end of the year, individuals would need to settle their accounts with the federal tax collection agency, said Alice Jones, spokesman for the Insurance Department.
Beebe decided to pursue the possibility of a scaled-back expansion after the federal government announced Monday that it would allow charging co-pays for Medicaid services like nonurgent emergency-room visits and higher-priced prescription drugs.
“It seems to show some willingness to put some things back on the table,” said Matt DeCample, Beebe’s spokesman.
Beebe still favors full expansion to 138 percent of the poverty level, DeCample said, but he’s willing to talk about other options.
Until answers come from Washington, though, those options remain speculative, DeCample said.
“For us, until we know whether it’s something we can do at all, there are no numbers, no negotiation about numbers,” he said.
Beebe hasn’t had serious negotiating sessions with Lamoureux, House Speaker Davy Carter, R-Cabot, or other Republicans since the legislative session began Monday, DeCample said.
“So far, it’s mainly continuing reaching out, asking what information we can get [lawmakers],” DeCample said.
Many Republicans remain perplexed at the shifting sands of the Medicaid-expansion debate.
“You expend effort looking at it one way, the next thing you know the rules have changed,” said House Republican Leader Bruce Westerman.
Westerman said he wants any deal to include overhaul items such as greater fraud-detection measures and co-pays, but he isn’t inclined to rush.
“I’d prefer a special session to a bad decision,” said Westerman, who represents much of Garland County.
The federal decision in December to require full Medicaid expansion was about “putting pressure on the states” to go along with the law’s original intent, which was that Medicaid expansion would be mandatory, Hanley said.
But the U.S. Supreme Court ruled in June that states can’t be mandated to expand, the choice is left up to states. That has led to the current standoff, he said.
But the clock is ticking, said John Selig, director of the Department of Human Services.
The state’s insurance exchange must begin enrollment by Oct. 1. The danger is that if expansion hasn’t been decided by then, confusion about who is eligible for the exchange might complicate efforts to get that component of the new healthcare law off the ground, he said.
There is still time, just not infinite amounts of it, Hanley said.
“You don’t have to do it in 60 days,” said Hanley.
But waiting too long will create financial headaches for hospitals and other providers, he said.
For now, say many Republicans, waiting may be the best option.
“It kind of validates what Lamoureux and Speaker Carter have said about waiting because it seems to be a little bit of a moving target at this point,” said John Burris, a Harrison Republican and chairman of the House Public Health, Welfare and Labor Committee.
Front Section, Pages 1 on 01/18/2013