Medicaid plan likely a keeper, Rapert says

Lawmaker keen on nonprofit model

— A leading Republican who has been unhappy with the state partnering with the federal government on its health insurance exchange said Monday that he is likely resigned to keeping that model for now.

“The governor and the Insurance Department have already made a commitment for the partnership, so that’s the track that the state’s on, regardless,” state Sen. Jason Rapert, R-Bigelow, said after a hearing on the exchange’s fate that he led as chairman of the Senate Insurance and Commerce Committee.

Rapert has previously been uneasy with the partnership model, favoring the federal government to run the state’s exchange, a key component of the Affordable Care Act, which will begin offering federally subsidized health coverage to about 211,000 Arkansans in January 2014.

Last week, Gov. Mike Beebe announced an agreement with the U.S. Department of Health and Human Services that allows the state to expand its $5 billion Medicaid program by up to 250,000 people by placing most or all of them on the exchange, with federal dollars paying their premiums for the first three years. That deal, Beebe said, is contingent on the state keeping its partnership model.

At the end of a second hearing on the fate of the state’s partnership exchange, Rapert said his views have been “evolving.” He is now most keen on a nonprofit model with state oversight that would have a “firewall” protecting state taxpayer pocketbooks, he said.

He has spoken positively of New Mexico and Idaho’s exchanges. Both states have Republican governors who have adopted the state-run model.

“The efficiencies that can come when you remove the burden of bureaucracy, which is a conservative principle, is something worth looking at,” Rapert said of a state-run model.

The deadline for switching to a state-run model has passed. Rapert has said he thinks the federal government might still allow Arkansas to change its model, much like it obtained the unprecedented federal deal to expand Medicaid through the exchange.

But if Washington, D.C., doesn’t budge, Rapert said, he wants the best path forward to a nonprofit model. The partnership, Rapert said, “may be the only option” toward that goal.

Rapert said he remains opposed to “this mandate that’s being imposed on us by the federal government, period,” referring to the Affordable Care Act.

“We have not won that battle. So given that fact, we’re going to have to make decisions between what I think are poor options from beginning to end,” Rapert said.

At the nearly two-hour hearing, all testimony from seven witnesses - including former state Supreme Court Justice Annabelle Imber Tuck - advocated for the state to keep its current model, saying it will give the state better flexibility to switch to a state-run model in the future, give Arkansans better consumer assistance and regulation of insurance plans, and lay the groundwork for cheaper premiums in coming years.

NEW ESTIMATES

Arkansas Department of Human Services officials said they would rework projected benefits from Medicaid expansion in light of Beebe’s recent deal with U.S. Secretary of Health and Human Services Kathleen Sebelius after Republicans said they wanted fresh data.

Last year, the Human Services Department estimated the state would save $630 million by 2021 through fewer dollars spent on the uninsured, increased tax revenue generated by nearly $9 billion in federal money and shifting some Medicaid recipients to the more generous federal expansion funding, including pregnant women and those who become impoverished after a sudden medical emergency.

Under the new health-care law, the federal government will pay the total cost of expansion until 2017. After that, the state’s share gradually rises to 10 percent by 2020.

Republicans have asked Beebe for new estimates to find out whether expanding Medicaid through the exchange would be cheaper or more expensive.

“I think we can have some analysis done. I understand that they may not be hard numbers, but I would like some numbers for the legislative body to look at,” said state Sen. Jonathan Dismang, a Searcy Republican.

Last week, Beebe said he didn’t think such an estimate would be available before lawmakers took a vote on expansion. On Monday, Human Services spokesman Amy Webb said her agency would get to work.

“Now that we know that getting legislators some updated information is a priority for them, Andy [Allison] and his staff will work on accomplishing that,” Webb said in a text message.

Allison is the state’s Medicaid director.

LEGAL QUESTIONS

Meanwhile, Allison said that a blog report questioning the legality of the state’s deal with Sebelius on expansion was off the mark.

“We have firm standing,” Allison said.

Project Millenial, a healthcare blog, analyzed the Arkansas deal here: http://projectmillennial.org/2013/03/02/arkansas-is-fiddling-with-obamacare/

Allison said the Centers for Medicare and Medicaid Services fully understood the complex interaction between federal rules and statutes when it promised that Arkansas could expand its Medicaid program through its exchange.

Republican leaders said they had faith in Beebe and Human Services Department officials’ understanding of the agreement.

Senate President Michael Lamoureux, R-Russellville, joined other Republicans who have said in recent days that they would like to see the agreement in writing. Human Service Director John Selig said that written confirmation should take place within the next week or two.

But Lamoureux said he wasn’t concerned about the deal breaking federal law.

“We are going to proceed with the information they gave us. If someone wants to challenge the legality of what we’re doing, they can bring us that information, but so far nobody has,” Lamoureux said.

MEDICAID CONSULTANT

Lawmakers also agreed Monday to hire an outside consultant, the Alexander Group, to study the existing Medicaid program, which covers about 780,000 people.

The Bureau of Legislative Research will pay $220,000 to the firm headed by Gary D. Alexander, a former Pennsylvania public welfare and health official, in four installments of $55,000, ending June 6.

State Rep. Bruce Westerman, R-Hot Springs, and state Sen. David Sanders, a Little Rock Republican, have pushed for an outside examination of the state’s program in hopes of identifying fraud, waste and inefficiencies.

The state faces a $61 million deficit in its existing Medicaid program beginning in July.

Sanders said he expected the study to be “very helpful” to lawmakers as they debate Medicaid expansion and other changes.

Speaker Davy Carter, R-Cabot, said he thought the contract, which could be terminated on a month-to-month basis, was “money well spent.”

HOSPITAL STUDY

Arkansas would gain 10,600 jobs by 2020 and save $610 million, according to a study of Medicaid expansion plans by George Washington University and Regional Economic Modeling Inc., a policy-analysis firm based in Amherst, Mass.

The study was commissioned by the Arkansas Hospital Association, which supports expansion. The report was completed before Arkansas’ Medicaid deal was announced and was based on earlier expansion models, said Bo Ryall, president and CEO.

He said the data still supports expansion, as Selig has said expansion through the exchange would likely increase savings to the state. Expansion is important to the state’s hospitals, especially those in rural areas, which are frequently the largest employer in their counties, he said.

“This proves to us that we can’t turn down this money,” Ryall said.

Information for this article was provided by Sarah D. Wire of the Arkansas Democrat-Gazette.

Front Section, Pages 1 on 03/05/2013

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