A state senator claims the Senate's leader acted inappropriately when he introduced special language to modify a tax credit more than a year ago.
The change affected a 2.5 percent tax on health insurance premiums by ending a tax credit on Medicaid expansion plans that offset much of the cost of the tax for insurers. By ending the tax credit, about $20 million in additional money flowed into the expansion's trust fund.
That fund will eventually be used to pay the state's share of the Medicaid expansion, which is known as Arkansas Works.
In the 2015 regular legislative session, Senate President Pro Tempore Jonathan Dismang, R-Searcy, introduced special language to the Arkansas Insurance Department's appropriation bill to make the change. Lawmakers approved the change and the bill in that legislative session and it became law.
Sen. Bryan King, R-Green Forest, has asked for Arkansas Attorney General Leslie Rutledge to opine on whether the special language was germane to the bill and if not, whether the addition violates the state constitution.
"He did it in a deceptive way. That was the biggest thing," King said. "It [the fund] doesn't fund the Insurance Department. It funds another program. I think that, very likely, is unconstitutional."
The change was a "tax-raise" that should have been in its own bill, he said.
Dismang said the special language addition was done properly.
"We wouldn't have had the amendment to begin with if we didn't feel that it was germane to the legislation," he said. "It goes back to the very beginning of the private option. We talked about how the premium taxes were going to be pushed aside and stored for the day we had the match."
Because of that match, Arkansas must pay ultimately 10 percent of the cost of the Medicaid expansion in 2020. The federal government will foot the rest of the bill, as it has so far.
Dismang said lawmakers never expected insurers to take advantage of the tax credit for state-subsidized plans under the Medicaid expansion. He said his special language was aimed at correcting that problem.
First approved by the Legislature in 2013, the expansion of the Medicaid program extended insurance coverage to adults with incomes of up to 138 percent of the poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.
Most of those covered under the expanded part of the program receive the coverage through what is known as the private option, which uses Medicaid funds to buy coverage through private insurance plans. More than 300,000 Arkansans have been enrolled for coverage through the Medicaid expansion.
King is a staunch opponent of the program, while Dismang is one of the architects of it.
Asked why he was bringing up the matter now, King said the change made through special language was recently brought to his attention. More than 2,000 bills were introduced in that legislative session.
"We have to trust that it's an up-front process so we can make informed decisions," he said. "I feel like it needs to be brought out."
Metro on 10/11/2016