Reauthorize private option through ’16, Hutchinson says

Gov. Asa Hutchinson speaks Thursday at UAMS, where he said he wants to see the state's private-option Medicaid expansion reauthorized through 2016.
Gov. Asa Hutchinson speaks Thursday at UAMS, where he said he wants to see the state's private-option Medicaid expansion reauthorized through 2016.

Gov. Asa Hutchinson announced Thursday that he wants to see the state's private-option Medicaid expansion reauthorized through the end of next year while also creating a legislative task force to consider a better way to address health care into the future.

Hutchinson, speaking at UAMS Medical Center in Little Rock, said there are real benefits to the private option in the insurance it has provided to more than 200,000 Arkansans and the savings it has created for hospitals. But he also noted that it has significant budget implications if it continues.

Hutchinson said the legislative task force must find ways to provide health care to Arkansans covered by the private option without having to raise general revenue beyond inflation. The task force will also be asked to come up with a way to incentivize working to encourage people on the private option to seek employment and to provide the state with greater flexibility in managing the program.

He said the state needs a system that is "compassionate, affordable, fits Arkansas and provides access to care."

"It is time to close this chapter and start a new one," he said of the private option. "It is a new day for health care in Arkansas, and I pledge to work with you to find the right solution for all of Arkansas."

Hutchinson said the task force, which will be "legislatively driven," should provide recommendations by the end of this year to give them time to be enacted and for hospitals to plan.

"This gives us stability for the present and an opportunity for the future to create new reform that accomplishes an objective of compassion for those currently being served but looking broadly about how we accomplish that in an affordable way," Hutchinson told reporters.

Hutchinson spoke of receiving a letter from Secretary of Health and Human Services Sylvia Burwell in which she wrote favorably of working with Arkansas on reforms. Hutchinson was part of a delegation that met with Burwell in Washington, D.C., last week.

In the letter, which was released after the speech, Burwell wrote that Hutchinson's interest in preventive care and support of small business insurance changes without growing costs were "reasonable and achievable objectives."

"… I can assure you of our openness to new ideas as you consider how to pursue these interests," Burwell wrote. "We also understand your desire to encourage employment, and we commit to work with you on how you might achieve this objective while ensuring access to health coverage for eligible individuals."

She added later that the federal government looks "forward to working with you on a potential broad block of changes that could lower costs and improve access and quality in ways that best meet the needs of your state."

In the speech before a packed auditorium, Hutchinson first outlined the positives and negatives he sees in the state's health-care system.

The private option, he noted, has provided insurance to more than 200,000 Arkansans who didn't have it before while also leading to a drop in uncompensated care at the state's hospitals, which resulted in big savings.

"Those two benefits are facts we cannot deny, should not deny and should rejoice in," he said, noting that federal money also has helped the state budget.

But Hutchinson cautioned there are also significant costs that the state will ultimately bear. The state would have to pay for 10 percent of the program by 2021, which Hutchinson said would be more than $200 million.

"To put that into context, that's two $100 million prisons" or roughly a third of the state's budget for all its higher education institutions, he said.

Going forward, the state's health-care system needs to incentivize employment and preventive care, emphasize the role of the private sector and charity care, and ensure cost controls, Hutchinson told those in attendance and viewers at live streams at other UAMS campuses across the state.

He noted that the costs of the Medicaid and Medicare programs as a whole have swelled considerably since they were created in 1965.

"Nobody, not even conservatives, thought those programs would grow so uncontrollably," he said.

Check back for updates and see Friday's Arkansas Democrat-Gazette for full coverage.

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