The private option ink blot

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

You know those tests where therapists ask clients to describe an ink blot because people see what they’re inclined to see? This week, legislators were given a 450-page one.

That would be the report by The Stephen Group, the consulting firm hired by the Health Reform Legislative Task Force to help it decide what to do about the private option in particular and Medicaid in general.

Here’s the ink blot part: Legislators who support the private option can be encouraged by the report because it recommends changing it but not ending it. Meanwhile, opponents can point to a finding that 43,000 people served by Medicaid and the private option may not live in Arkansas, while the programs combined enroll 500 people who are deceased.

Here’s the background. Medicaid is the government health program serving the poor, the disabled, and the aged who live in nursing homes. It’s mostly but not entirely funded by the federal government and mostly administered by states. The Affordable Care Act, which created Obamacare, expanded Medicaid in all the states to cover more lower-income people. In 2012, the Supreme Court ruled that Obamacare is constitutional but that the Medicaid expansion must be only voluntary. Many states said no.

Arkansas created the private option. Instead of expanding Medicaid, it uses those dollars to buy private health insurance for Arkansans not covered by Medicaid and having incomes of no more than 138 percent of the federal poverty level. Republican legislators had the idea and worked with then-Gov. Mike Beebe, a Democrat, to implement it.

In some ways, it’s been a success. It’s currently serving about 200,000 Arkansans, give or take tens of thousands because the state is in the process of redetermining eligibility. According to a Gallup poll, the state’s uninsured rate fell from 22.5 percent in 2013 to 9.1 percent during the first half of 2015. That’s the best in the country, and the private option was a big reason why. Without the private option, hospitals would provide $1 billion in uncompensated care from 2017-21, according to the report. The private option is bringing $1 billion in federal funds to the Arkansas economy every year.

But that’s still a billion dollars in taxpayer money, opponents say, which increases the national debt. While the feds are paying for all of it now, Arkansas will be responsible for 10 percent of the cost in the next few years. It was supposed to serve the working poor, but 40 percent of its beneficiaries had no income last year, so it’s still a health care entitlement program. It’s still Obamacare.

The private option was created in 2013. It must be approved by 75 percent of legislators each year. It barely passed the first time and barely survived in 2014. We can’t keep doing this. So this year, Gov. Asa Hutchinson asked legislators to extend the private option through 2016 while it created the task force to decide what to do next.

Back to the ink blot. The small consulting firm found what the state’s huge Department of Human Services could not: 42,891 Medicaid and private option beneficiaries whose best addresses appear to be located out of state, including 3,220 whose best addresses are in California. Almost 500 on the rolls were dead before they even became a part of the program.

It’s unknown how much of this represents waste and abuse. It’s unclear how many actual dollars are going to the wrong places. A program this big will have challenges with its mailing list. Some people with California addresses may have moved to Arkansas recently.

Still, private option opponents can point to this report and say they were right all along, that government can’t do anything correctly, and the private option should be scrapped.

But the report didn’t recommend that. Instead, it said the private option should be retooled to become more of a transitional program that encourages work and personal responsibility – which, supporters would say, was the plan all along. Participants should look for work and meet health and wellness goals. Legislators might consider limiting participation in the private option to a few years. Meanwhile, the state should create an office that monitors the eligibility of all Arkansans seeking state services, including the private option.

Members of the task force must make their own recommendation by the end of this year. Will they vote to end the private option, or change it? It depends on what they see in the ink blot.

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