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Private option’s future disputed

Beebe says calling it DOA before session is premature by Claudia Lauer, Michael R. Wickline | January 23, 2014 at 4:59 a.m.

Gov. Mike Beebe said Wednesday that it’s premature for state Sen. Linda Chesterfield to suggest that Arkansas’ new program to use federal funds to purchase private health insurance for poor Arkansans is at best on life support ahead of the Legislature’s fiscal session, which starts next month.

Nonetheless, Beebe - a Democrat - said the Republican-controlled Legislature will have to decide where to cut his proposed $5 billion general revenue budget if it decides not to reauthorize federal funding for the private option. Lawmakers may start by slicing Beebe’s proposals to provide additional money for the state’s colleges and universities, and prisons, the governor said.

If Sen.-elect John Cooper, R-Jonesboro, and Sen. Missy Irvin, R-Mountain View, don’t vote for reauthorizing the use of federal funds for the private-option program in fiscal 2015, as they’ve said they won’t, “it is dead on arrival,” Chesterfield, D-Little Rock, said Tuesday.

The fiscal session begins Feb. 10.

Beebe said Wednesday, “Tell [Chesterfield] she doesn’t need to get ahead of herself either.

“Right now, there is a lot of reaction that has got a lot of politics to it,” he said. “By the time it comes to a vote, there will be real factual issues to be determined and real ramifications.”

The appropriation authorizing the use of $915 million in federal funds for the private-option program will require 27 votes for approval in the 35-member Senate, which approved a similar measure with 28 votes last year. It will require 75 votes in the 100-member House of Representatives, which approved the funding measure with 77 votes last year.

Cooper was elected last week to fill a vacant seat formerly held by Jonesboro Democrat Paul Bookout, who supported the private option. Irvin, who voted to fund the private option last year, said Monday in a written statement that she is “opposed moving forward and will not vote to fund the appropriation for the private option.”

Beebe said Irvin “had two concerns that caused her to rethink where she is, and I think if those two concerns are addressed then Missy will be all right, but you’ll have to ask Missy.”

Irvin said Tuesday that Arkansas Blue Cross and Blue Shield, one of the companies offering the private plans, has cut reimbursement rates for physician specialists below those for primary-care doctors for services provided to Medicaid patients and others who enroll in coverage through the state, and that will hurt patients’ access and quality of care. She also said she was disappointed that there hadn’t been more progress with the state’s plans for health-savings accounts for Medicaid recipients.

Irvin could not be reached for comment on her cellphone Wednesday afternoon.

House Republican leader Bruce Westerman of Hot Springs, an opponent of the private option, said Wednesday that he doesn’t want to speculate on whether there are enough votes to reauthorize funding for the private option, recalling that a similar measure in 2013 fell six votes short of the 75 required for approval in the House only to be approved with 77 votes a day later.

The Arkansas State Chamber of Commerce warned Wednesday afternoon that Arkansas’ businesses face “a substantial tax increase if the Arkansas Legislature backs away from the private option,” citing Jackson Hewitt Tax Service’s latest estimate that the added cost is between $27 million and $40 million.

States that do not expand Medicaid for adults leave their large employers exposed to employer “shared responsibility” tax penalties under the federal Patient Protection and Affordable Care Act, Jackson Hewitt said in its report.

“This additional expense will have a chilling effect on the growth plans of Arkansas businesses,” Randy Zook, president and chief executive officer of Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said in a news release. “With nearly 100,000 Arkansans still unemployed, those companies do not need to deal with added costs.”

Zook said in an interview that he’s not worried that the private option is in peril.

“It’s fragile. There is no question about it,” he said. “I think people will look at the facts.”

The expansion of Arkansas’ Medicaid program, authorized by the federal government and approved by the state Legislature last year, extended eligibility to adults with incomes of up to 138 percent of the poverty level - $15,860 for an individual or $32,500 for a family of four.

It made an estimated 250,000 Arkansans eligible for coverage that started Jan. 1. Under Arkansas’ private option, most recipients can sign up for private plans on the state’s health-insurance exchange and have the premiums paid by Medicaid.

About 10 percent - those whose health needs are considered exceptional - are expected to be covered under the traditional Medicaid fee for-service program.

From Jan. 13 to Monday, enrollment in Arkansas’ fledgling private option saw its largest weekly increase since the Arkansas Department of Human Services began accepting applications.

According to numbers released Wednesday, 85,309 people have been approved for coverage since the Oct. 1 enrollment period started. Of those, 76,899 had completed enrollment in the private option as of Monday, up from 70,057 as of Jan. 13. An additional 8,410 applicants qualified for traditional Medicaid and are now covered under that program, said department spokesman Amy Webb.

According to this week’s numbers, more than 10,000 additional people have applied for health-care coverage. About 6,800 additional people were enrolled in the private exchange in the past week.

“I think there are a few things happening to increase those numbers,” Webb said. “I think people are getting coverage and going to the doctor. And they go home and tell their friends and family and neighbors. And that leads to more people asking questions and applying.”

“I also think, even though the March deadline doesn’t apply to the private-option plans, I think that federal exchange deadline is driving more people to consider their health coverage choices,” she added.

People who enroll in private plans through the end of March will be covered retroactively to Jan. 1 under the state plans. People who enroll in the private-option plans after April 1 can receive retroactive benefits for the three previous months. But, Webb said, enrollment is ongoing for the private option.

In all, 129,186 people had applied for the private option through the state and federal health insurance exchanges as of Monday, with all but 9,295 applying directly through the state program. So far, 92,446 have been determined eligible.

Webb said many emailed questions about the expanded health-care programs are referred to her, and she has not been asked by applicants about the possibility of the private option being defunded in the coming legislative fiscal session.

“I would have to ask our operators if they’re receiving phone calls, but I have not been getting those questions,” Webb said.

“Based on the conversations going on and as the fiscal session starts, that may be something that people begin asking about,” she added. “For now, though, considering the numbers and that we’re seeing literally hundreds of people applying every day, we expect interest to continue even as these ongoing discussions about the future of the program continue.”

Webb said that because the program is funded through July 1, many people might not be worried about it quite yet.

“I think our numbers are indicative of a popular and much-needed program,” she said.

The state’s public schools, prisons and human-services programs would get increased funding under Beebe’s draft $5.03 billion general-revenue budget for the fiscal year starting July 1, which raises state spending by $105.8 million. The governor’s proposed budget factors in an $85.2 million reduction in general-revenue collections stemming from tax cuts enacted by the Legislature last year and up to $89.2 million in projected savings resulting from federal Affordable Care Act funding, including the private option, according to the state’s budget administrator, Brandon Sharp.

If the Legislature declines to reauthorize federal funding for the private option, “we have at least [an] $86 million hole [in the proposed budget]; maybe a bit more than that depending upon what the revenue does,” Beebe said.

But Westerman said he “doesn’t put a whole lot of stock in that $89 million [projected savings] figure,” and he needs to see more details.

Legislative leaders said they haven’t started discussing where to cut Beebe’s proposed budget if the Legislature fails to reauthorize federal funding for the private option.

Senate President Pro Tempore Michael Lamoureux, R-Russellville, said private-option opponent Sen. Jim Hendren, R-Sulphur Springs, has encouraged lawmakers to develop their own budget plan.

“Jim is a fighter pilot and trained to have a plan B,” said Lamoureux. “Right now, I have a plan A - pass the private option. I am trying to figure out a way to make it happen.”

Front Section, Pages 1 on 01/23/2014

Print Headline: Private option’s future disputed

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