LITTLE ROCK — The state’s top business-lobbying organization announced support Thursday for providing government-funded private health insurance to about 250,000 low-income Arkansans through the state’s Medicaid program.
Lawmakers said the Arkansas Chamber of Commerce/Associated Industries of Arkansas is arriving late to the party.
The organization’s announcement came the day after a Department of Human Services actuarial consultant announced that expanding insurance through the “private option” would have a $670 million benefit to Arkansas over the next decade through reducedpayments for uncompensated care, lower costs for the existing state Medicaid program and increased tax revenue.
“Our hope is that by increasing enrollment in the private insurance market and encouraging competition in the health insurance marketplace, we will see more Arkansans obtain health care coverage and ultimately lower costs for those services,” chamber President Randy Zook said in a news release.
In January, Zook said the state chamber was reluctant to take a stance on Medicaid expansion, saying he didn’t know whether the organization would ever pick a side.
If Arkansas doesn’t provide insurance for its low-income population,business owners in the state who don’t provide health insurance would be hit with $26 million to $38 million in penalties if their employees sought subsidized insurance in the state’s online health insurance pool, according to a March 13 study by the Jackson Hewett Tax Service.
Zook noted the fines in his statement.
“This action will also ensure that Arkansas businesses are not hit with a de facto tax increase from fines that would apply if the state does not move ahead on this issue,” he said.
Lawmakers are working to decide whether to provide access to health coverage via government-subsidized private insurance, to put those 250,000 people in the Medicaid program, or do nothing. The 2013 legislative session is scheduled to end April 19.
Sen. Larry Teague, who does not support the private option, said that at this point in the session the chamber’s announcement doesn’t matter.
“I think the discussion was, private option is the only discussion on the table,” Teague, D-Nashville, said.
He said the chamber could have had a role in the discussions if it had taken a stance when the session began in January.
“The state chamber has come late to the game. They should have taken a position three months ago,” Teague said. “We’ve been trying to work on this, and they might could have helped. Now they’re just kind of saying ‘OK, I’m in.’ It’s a little late.”
In July, the U.S. Supreme Court struck down provisions of the 2010 federal Patient Protection and Affordable Care Act and let states choose whether to extend their Medicaid programs to cover people making up to 138 percent of the federal poverty level, or $15,145 annually for an individual.
Many states have rejected adding thousands of people to their Medicaid rolls. Republican state legislators had said the issue was a nonstarter for Arkansas.
Then in late February, Gov. Mike Beebe got unprecedented federal approval for a “private option” to extend insurance coverage to those making up to the 138 percent level.
Beebe said the chamber’s announcement will help persuade Arkansas legislators to approve the plan.
The chamber represents “a whole lot of businesses and a whole lot of people, and they analyze stuff pretty thoroughly. I think it’s very helpful,” Beebe said.
If the Legislature approves the private option route, the federal government will pay premiums for private health insurance companies to provide coverage through the private-insurance exchange to an estimated 250,000 of the state’s poorest residents.
House Public Health, Welfare and Labor Committee Chairman John Burris said the chamber’s announcement won’t affect the final decision.
“It’s never been about what association group supports what policy, depending on what’s in their own self-interest. It’s about crafting the best policy that’s actually good for the people of Arkansas,” Burris, R-Harrison, said.
The health committee’s vice chairman, Rep. Reginald Murdock, D-Marianna, said he doesn’t think the announcement will have a big effect but “that couldn’t hurt us any. I think more people are starting to buy into the program.”
House Democratic leader Greg Leding of Fayetteville said it’s good to see another association back the idea of using private insurance, but, he said, it likely won’t influence opponents.
Leding said it may help Republicans who campaigned against the Affordable Care Act, but “as adamantly opposed as some of their supporters are to the Affordable Care Act, I don’t know that the state chamber weighing in would provide much cover.”
The numbers released Wednesday by the Human Services Department showed that the private option will cost $1.9 billion over the next decade.
It showed that expanding Medicaid would cost $2 billion over 10 years. Doing nothing would cost the state $1.1 billion over that same time.
The numbers differed widely from an initial report released by the actuary March 19 that said it would cost up to 15 percent more to implement the private option than it would to implement standard, government-run Medicaid expansion.
Department DirectorJohn Selig said Thursday that the initial report didn’t consider that the state would have to raise Medicaid reimbursement rates if it expanded access to the 250,000 people.
“If you add 250,000 new people to Medicaid, you’re probably going to have to raise your rates somewhat in Medicaid to make sure they all have access, because doctors may not want to serve as many Medicaid clients, they are competing with private clients to get that doctor’s time,” Selig said. “That has made a huge difference in closing that gap.”
Under the private option, insurance rates for those 250,000 people would be the same as for someone paying for his own privateinsurance, he said.
The actuaries felt that over time the private companies could more efficiently manage the patients.
“The private sector’s alittle more nimble, a little more flexible and might be able to keep costs down a little bit better than we could for that population,” Selig said.
Front Section, Pages 1 on 03/29/2013