WASHINGTON -- Legislation filed by U.S. Rep. Bruce Westerman would cut the amount states receive for their expanded Medicaid enrollment under the Patient Protection and Affordable Care Act and shift some of the money to road construction.
If approved, the bill would reduce federal funding for health care in Arkansas by as much as $300 million a year, according to an Arkansas health policy group.
Arkansas, along with 28 other states and the District of Columbia, agreed to expand Medicaid to adults with incomes of up to 138 percent of the poverty level -- $16,105 for an individual or $32,913 for a family of four -- with the understanding that the federal government would pay 100 percent of the cost for the first few years. Starting in 2017, states will gradually take on some of the cost, paying 10 percent by 2020.
Since it began, more than 250,000 Arkansans have been approved for health care coverage under the expansion.
The Prioritizing American Roads and Jobs Act would reduce the amount the federal government pays for the expanded Medicaid population to the amount it pays for the original population made up of the elderly and disabled, the Hot Springs Republican said.
Arkansas health officials and a state senator who helped designed the program said such a change could affect whether the program survives.
If the bill becomes law, half of the estimated $30 billion a year in savings would go toward the nation's nearly insolvent Highway Trust Fund, which pays for infrastructure repairs and improvements, and the other half would go toward slowing the growth of the national debt.
"There are some areas of government where there seems to be plenty of money and I think it's a matter of priorities," Westerman said. "I think my constituents, and I believe most people across America, believe that funding road and infrastructure are an important purpose of the federal government."
Early last week, the House passed a two-month extension for Highway Trust Fund financing, continuing the series of short-term extensions it has passed since 2011. The Congressional Budget Office estimates that the fund will become insolvent some time this summer. Money for the fund largely comes from a federal gasoline tax, set at 18.4 cents per gallon since 1993.
Concerns about long-term viability of the trust fund has prompted the Arkansas Highway and Transportation Department to suspend 70 projects worth $282 million so far this year, including the replacement of the White River bridge on Interstate 40 in Prairie County.
The Highway Department has said it is evaluating each project before asking for bids to ensure there is enough state money available to foot the bill in case the federal funds are jeopardized.
How much the federal government pays for traditional Medicaid recipients varies by state based on population and poverty rates. In Arkansas, the federal government pays 70 percent for the traditional population and the state government pays 30 percent. In many states the rate is closer to a 50-50 split.
The Arkansas Legislature approved the program, often called the private option, in 2013. It uses federal funds to purchase private health insurance for eligible Arkansans. Westerman helped draft the 2013 law when he was a state lawmaker, but withdrew from being a co-sponsor and lobbied against the final effort.
State Sen. David Sanders, R-Little Rock, who helped create the original expansion program, said just cutting the funding would be hard unless it gives the state more flexibility regarding how the money is spent.
"As a stand-alone measure unto itself, I wouldn't support it," he said. "Alone it would be tough, but as part of a comprehensive measure where Congress was willing to give states a lot more flexibility with those funds and to actually take savings and apply it to other parts of programs that rely on federal funds, I think it would work. As is, it would be hard."
In March alone, Arkansas received $100 million from the federal government for the program, according to the Human Services Department.
While Westerman's legislation stipulates that the funding model wouldn't change until 2017, the original Arkansas law that expanded access states that Arkansas' expansion would end immediately if the federal government ever changes what percentage of premiums it pays.
Arkansas Center for Health Improvement's Access to Quality Care Director Craig Wilson said such a change to the approximately $1.1 billion-a-year private-option program would be difficult.
"The state would immediately have to pick up roughly $300 million. I'm not sure any state could stomach that in that sort of time frame," he said.
The current system is an "injustice" because it funnels more money to states that participate in the program than to those who opt out, Westerman said.
"I think a lot of people don't realize that we're paying this huge premium to 29 states and the District of Columbia that is above and beyond what's being paid to traditional Medicaid recipients. The Highway Trust Fund applies to all 50 states, whereas this $300 billion premium over 10 years is only going to those states that expanded Medicaid," he said.
States would have to make up the shortfall if they wanted to continue offering Medicaid to the expanded population of poor citizens, Westerman said.
"They made the choice to expand Medicaid; they would have to make the choice if the program is worth staying in and paying the rest of it with state money like they are doing for traditional Medicaid patients," Westerman said.
Westerman said improving roads would mean more jobs, and less of a need for the expanded Medicaid option.
"These are able-bodied working-age adults who will get more opportunities for people to get a job and not be dependent on the government for these health care benefits," Westerman said. "What we really need back home is jobs."
While more than 50,000 of Westerman's constituents have received health care as a result of the expansion, Westerman says he's focusing on fixing a problem that everyone faces. "There are about 750,000 people in my district who are not benefiting from poor roads," he said.
Metro on 05/25/2015