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Medicaid deal with U.S. solid, Beebe says

by Charlie Frago | March 8, 2013 at 12:27 a.m.

— Arkansas’ deal to expand Medicaid is legal, Gov. Mike Beebe said Thursday, and emails among state officials indicate that top federal officials agree.

The oral agreement reached between Beebe and U.S. Secretary of Health and Human Services Kathleen Sebelius last month hasn’t yet been put in writing, as some Republican lawmakers want, but Beebe says the deal will stick.

“I think we’ve got it. If it’s necessary, I think we can get a follow-up letter. They’ve publicly said what they’ve said. I don’t think there’s a lot of risk there,” Beebe told reporters after a pro-expansion rally on the Capitol steps.

The deal will allow Arkansas to use Medicaid dollars to buy private health insurance to cover up to 250,000 poor Arkansans who earn up to 138 percent of the federal poverty line, or $15,415 for an individual.

Concerns have arisen since the agreement was struck about the likelihood that the private option will be more expensive than a straight Medicaid expansion.

But e-mails obtained by the Arkansas Democrat-Gazette through a state Freedom of Information Act request show state officials strongly confident that so-called cost comparability will not be a stumbling block.

The state has “firm standing” with the federal government, state Medicaid Director Andy Allison said earlier this week. A Monday e-mail from Allison to Arkansas Department of Human Services Director John Selig and state Surgeon General Dr. Joe Thompson sheds light on Allison’s confidence.

“Cindy Mann [director of the Center for Medicare and CHIP Services, or CMS] told Ohio and us today not to lose sleep over cost comparability. They apparently are comfortable in their interpretation of the rules on this. I think we should defer to them, since they are already taking direct questions,” Allison wrote.

Federal law permits paying Medicaid dollars for private insurance - the meat of Arkansas’ plan - but the federal government also requires that such a scheme be “comparable” in cost to covering that group under a traditional expansion of Medicaid as allowed by the Patient Protection and Affordable Care Act.

So far, Arkansas is the only state to publicly announce that it has reached such a deal with the Obama administration, although Allison’s e-mail suggests that Ohio is pursuing a similar plan.

Beebe said any chance of expanding Medicaid in Arkansas depends on the Sebelius deal. Expansion requires super majority support of 75 votes in the House and 27 in the Senate.

“If they reneged on the deal, it wouldn’t happen,” Beebe said.

On Thursday, state Department of Human Services spokesman Amy Webb reiterated that the state’s deal is legally sound.

“For us, these are CMS rules and regulations. Obviously, they are aware of them. They’re the ones that told us that we’re on firm ground,” she said.

Sara Rosenbaum, a professor of Health Law and Policy at the George Washington University School of Public Health in Washington, D.C., has studied the Arkansas model.

It’s legally solid, she said.

The Center for Medicare and CHIP Services still hasn’t said how it will determine comparable costs, but just doing a “price-to-price comparison” with regular Medicaid expansion gives a misleading impression that exchange coverage is more expensive, Rosenbaum said.

Such an analysis doesn’t take into account an expected reduction under Arkansas’ model of “churn” - or people switching between Medicaid and the insurance exchange as their incomes fluctuate, which is expensive to administer and often keeps poor people from using their coverage.

If a state expands through the exchange, costs associated with that instability are eliminated, she said.

Nor does a simple price tag analysis factor in the lower costs of insuring what her research has found to be a young, healthy population over the long term, she said.

“Everybody thinks that they are very sick, very poor homeless, but that’s not the case,” Rosenbaum said of the expansion population.

The legality of the Arkansas deal isn’t being parsed solely by health-care experts. Governors and lawmakers around the country also are keenly interested in the details.

A national conference call, with Allison explaining the nuances of Arkansas’ agreement, is also in the works, an e-mail reveals. That call has not been scheduled, said Webb.

E-mails obtained from the Department of Human Services this week show other states immediately inquired about the state’s deal.

On Feb. 28, former Texas Medicaid Director Billy Millwee e-mailed Allison to congratulate him.

“[Our Legislature] is in session and overnight the tone has changed from one of ‘no way’ to ‘maybe’ driven [by]... Arkansas,” Millwee wrote.

An Alaska official e-mailed to say his state’s health and human services department commissioner was “quite interested” in what Beebe had brokered.

“This is a high priority for our department,” wrote Josh Applebee to Marquita Little, Department of Human Services director of policy and planning, on Feb. 27, a day after the deal was announced.

Arizona and Florida officials also have contacted the state, according to Webb and Thompson.

Sen. David Sanders, a Little Rock Republican who has been involved in the expansion negotiations, said he has talked with officials in “nearby” states previously opposed to expansion.

“They see our model as one that is very appealing,” Sanders said. He declined to identify which states had shown interest.

Texas Gov. Rick Perry, who has opposed expanding Medicaid, thinks that “it’s still premature to evaluate” Arkansas’ expansion model, Lucy Nashed, a Perry spokesman, said last week.

“Gov. Perry’s position on expanding Medicaid has not changed,” Nashed said.

Other Republican governors of neighboring states didn’t respond to requests for comment. Louisiana, Mississippi and Oklahoma’s GOP governors have all said they won’t expand. Tennessee Gov. Bill Haslam has promised a decision later this month.

Missouri’s Gov. Jay Nixon, a Democrat, supports expansion but faces political opposition from lawmakers.

“We really don’t have anything to weigh in with on what’s happening in Arkansas,” said Scott Holste, Nixon’s spokesman.

Florida Republican lawmakers have taken an interest in Arkansas’ deal, according to a report Thursday in the Tampa Bay Times. Thompson said he’s been contacted by Florida officials to explain the fine points of the agreement.

Rosenbaum predicts other states will follow Arkansas’ lead.

Beebe said other states will be able to reach the same understanding with the U.S. Department of Human Services that he did.

“Anything they give to any state, in my opinion, they’re going to make available to any other state that wants to do it the same way,” Beebe said.

Front Section, Pages 1 on 03/08/2013

Print Headline: Medicaid deal with U.S. solid, Beebe says


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