LITTLE ROCK — Lawmakers who want to see a price tag on the new private model for Medicaid expansion likely won’t see any dollar figures before a vote, Gov. Mike Beebe said Thursday, adding that a much-discussed “sunset” clause in any legislation would create a three-year window for “actual data, not speculation.”
“Then the Legislature and the governor can make an intelligent decision based on data as to whether they want to keep it, not keep it, whether they want to adjust it, go a different route,” Beebe told reporters at the Capitol.
Beebe, a Democrat, can’t run for re-election because of term limits. He leaves office in January 2015.
Under an unprecedented deal Beebe secured last week with U.S. Health and Human Services Secretary Kathleen Sebelius, private insurance companies would provide health coverage to an estimated 250,000 poor Arkansans, with the federal government paying the premiums.
A July 2012 Congressional Budget Office report estimated that an average person who buys coverage in the exchange would cost the federal government $9,000 in 2022. That same person would cost $6,000 to cover under Medicaid.
State Surgeon General Dr. Joe Thompson disputes those figures, saying that healthcare costs have traditionally been lower in Arkansas than the national average and that Arkansas never set “price points” for Medicaid or the exchange.
And estimates can’t account for the unpredictability of how the exchange will work, Beebe said.
“First of all, you don’t know how many insurance companies are going to be in - this is what we talked to the legislators about - some of these decisions are going to be forthcoming over the course of setting up the exchange: the number of companies that want to vie for business, what that competition will do to costs. How many will be involved? What the various plans are because there could be a multiplicity of different plans at different costs, and you’re never going to have that answer before it’s time to make a decision,” Beebe said.
The deal Beebe brokered with Sebelius allows the state to place all 250,000 people earning up to 138 percent of the federal poverty level, or $15,415 for an individual, into the insurance exchange.
The federal government would pick up 100 percent of the private insurance premiums. By 2020, though, the state will be responsible for 10 percent of the cost.
In November, the state Department of Human Services estimated that the state would spend about $133 million in 2020, but it predicted that those dollars would be offset by $180 million in increased tax revenue, less money spent on the uninsured and other savings.
The net savings to the state would be about $46.5 million, according to the department’s analysis.
The department isn’t likely to provide a similar set of detailed savings estimates for the new option on the table before lawmakers vote, Beebe said.
“No, no, no, I doubt it very seriously,” Beebe said.
Beebe has repeatedly said that he wants the issue settled during the current legislative session.
Department Director John Selig said his agency doesn’t plan to produce any new cost projections in the near future.
“We will at some point,” Selig said.
But the department anticipates that the ledger will tilt more in the state’s favor under the new option, Selig said.
Administrative costs for the $5 billion Medicaid program that now covers 780,000 Arkansans should go down, he said, since it won’t be directly handling a quarter million new recipients. And likely higher reimbursement rates on the exchange should translate into more economic activity with expansion, he said.
“The numbers just get better - at least in the near term,” Selig said.
House Majority Leader Bruce Westerman, R-Hot Springs, said he would like to see data and a detailed outline of potential costs.
“I’ve got some concerns. What is the total bill on doing that? It literally opened Pandora’s Box on questions for me when we got this news,” Westerman said. “I want to see it outlined and know what we’re getting into. I’d like to see the data. Show me the numbers and show me something in writing.”
For doctors and some other providers, the “private option” shows promise, specifically because payments from private insurers will likely be higher than what Medicaid would pay.
Private-sector reimbursements have been much higher in the past, said David Wroten, executive vice president for the Arkansas Medical Society.
“That makes it a lot easier for physicians to open their doors for more Medicaid [funded] patients,” he said.
Republican Rep. John Burris of Harrison, who has been deeply involved in the expansion negotiations, said there are so “many moving pieces” to the proposed exchange expansion that it’s hard to quantify costs at this stage. But he said Republicans would work to tamp down any financial cost to the state.
“We’re not just going to give a blank slate and say, ‘You set it up.’ Frankly, we have a lot of ownership in this model because we were the ones that proposed it,” Burris said.
Burris’ Democratic counterpart on the House Public Health, Welfare and Labor Committee, Reginald Murdock of Marianna, said he thought a sunset clause provided a reasonable mechanism to gather more facts.
“The good thing about what hopefully we’ll do is having a three-year period of getting real data to verify, three years at no cost to state to help us make a better informed decision,” Murdock said.
For any expansion of health coverage for poor Arkansans, three-quarters of state lawmakers must sign off: 75 votes in the House and 27 in the Senate are required.
Republicans hold majorities in both chambers. Burris said that “it’s way too early to tell” if enough GOP support exists for the new plan.
Beebe thinks lawmakers can make a decision without firm numbers.
“It would be even more politically difficult if we were asking them to make it part of their specific budget findings,” he said. “But, you know, all this stuff is going to be subject to the kind of competition, kind of variations that will exist. So I don’t know if you can put a specific price tag on what it’s going to cost because you don’t [know] what all the insurance plans are going to be.”
Front Section, Pages 1 on 03/01/2013