Arkansas Works and the private option: What’s all the fuss about?

Gov. Asa Hutchinson
Gov. Asa Hutchinson
By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

This next month, legislators will debate whether or not the private option should continue as Gov. Asa Hutchinson’s version, Arkansas Works.

What’s all the fuss about? I’ll try to answer your questions.

What exactly is the private option?

Let’s start with the background. The Affordable Care Act, which created Obamacare, expanded the number of Americans eligible for Medicaid, the program that pays for medical care for poor people. Americans with incomes up to 138 percent of the federal poverty level became eligible. Meanwhile, the act cut the federal government’s reimbursements to hospitals that serve a high number of uninsured patients, who often don’t pay for their own care. The assumption was those people would be on Medicaid.

But then the Supreme Court ruled that states could choose whether or not to participate in the Medicaid part. Most Republican-leaning states said no, but their hospitals’ reimbursements are still to be cut. Arkansas in 2013 said “Yes, but.” Instead of putting people on Medicaid, a government program, it used those dollars to purchase private insurance. Republican legislators and Gov. Mike Beebe’s administration created it, and the federal government approved it.

What have been the results?

As of the end of January, 267,590 Arkansans had qualified. A Gallup poll last year found Arkansas’ adult uninsured rate had dropped from 22.5 percent in 2013 to 9.1 percent in 2015 – the country’s biggest improvement. Hospitals are treating fewer patients who don’t pay.

Other states that turned down the Medicaid money have faced consequences. Rural hospitals have closed. Oklahoma this week proposed cutting what Medicaid pays doctors and hospitals by 25 percent. That’s huge because Medicaid already doesn’t pay much, which is why many doctors won’t treat Medicaid patients. Louisiana, which first said no to Medicaid expansion under a Republican governor, recently elected a Democrat who promised to take the money.

What do opponents say?

The private option as it currently exists would cost $1.63 billion in 2017. Currently, the federal government pays for almost all of it, but next year the state starts picking up 5 percent, which increases to 10 percent by 2020 – assuming Congress doesn’t change the rules and make the state pay more. So the state will have to find that money.

Some legislators have a major philosophical problem with the private option. They say it’s a health care entitlement with roots in Obamacare that increases government dependency and adds to the national debt. Those federal dollars aren’t a gift; they come from American taxpayers, current and future.

So what’s Arkansas Works?

Last year, Hutchinson convinced legislators to approve the private option through the end of 2016 while the state figured out what to do next. In the meantime, he’s proposed Arkansas Works, which changes the program in a few ways. Beneficiaries with incomes from 100 to 138 percent of the federal poverty level would pay up to 2 percent of their income for insurance premiums – about $19 a month. Private option recipients would be referred to work and work training opportunities, though they wouldn’t be required to take advantage of them. Hutchinson would like to do more in that area, but the Obama administration won’t let him.

Is it really that different from the private option?

No.

Why does the Republican governor support government-funded health care?

He says he opposed and still opposes Obamacare, but he inherited this situation. If Arkansas does nothing, the private option would go away at the end of this year, and then all those people would lose their health insurance, and hospitals would have to go back to providing all that uncompensated care. Also, losing those federal dollars would blow a $100 million hole in the state budget.

What does the next month look like?

Legislators are meeting starting April 6 in a special session to vote on Arkansas Works. Then starting April 13, legislators meet in the fiscal session that occurs every even-numbered year. Because Arkansas Works will cost money, it requires a three-fourths vote in both the House and Senate. In other words, 26 representatives or nine senators could kill it.

What’s the vote count look like?

Hutchinson doesn’t have a three-fourths majority yet in either the House or the Senate. But he’s trying.

What will the outcome be?

I don’t know.

Related: The private option ink blot.

7 thoughts on “Arkansas Works and the private option: What’s all the fuss about?

  1. Oklahoma, which didn’t take money from the Affordable Care Act, is in dire financial condition. They’re in a $1.3 billion budget hole and are making draconian cuts to everything. The Tulsa World is asking Oklahomans to look to the east for salvation: Arkansas should be a model for Oklahoma. Enough said.

  2. Hi, Sandy. Thanks for writing, and I’m sorry I didn’t respond to your last comment. I do have an opinion about this issue, but I’d like my comments on this site to remain neutral for now so people can just get information. I’ll email you.

  3. The only reason this doesn’t have more support is because it fails to enrich lobbies to the extent they feel entitled.
    This is according to Oklahoma finding that the AHCA failed to produce the expected jobs.
    Three middlemen stand in between the funds and the recipient, who is labeled as receiving an entitlement.
    Being on this program I can speak first hand on the subject.
    Men is expensive cars and suits and grand offices with no bid contracts, employ men driving leased new cars and offices in business dress, employing multiple business men in nice cars and offices, employing people in business casual driving cars reimbursed .30 to distribute monies to people with no cars.
    We understand now, we are called entitled because, we are entitled to what money is left over.

  4. Thanks for asking, but we have company insurance for the family.
    We only deal with Arkansas’s policies that affect the Waiver Programs. My son of 30 has CP from birth. He is so borderline developmentally disabled that he was dropped from DDS Waiver program , which is what he should be on, to a long term disability program.
    We have years of dealing with these programs, and their administrators. These administrators are for profit and run caseloads on the case managers and supervisors that are over the set limit consistently. This means they do not have the time to provide for durable medical equipment. Just a few examples, it took almost 2 years to get a electric bed repaired and even then the case manager found it easier to get UCP to pay for that.
    We were asking for a over the bed tray for over 3 years, give up and found one on Craigslist. Needed a rail system put in, never happened. This program had $7,500 per yr. built into his plan. We only saw this one time. Getting anything was next to impossible. 13+ years we have in dealing with Focus then Abilities. I can tell you all about the empty promises from both of these companies. From networking with others in our position all these providers operate about the same.
    We were dropped by Abilities Unlimited on the last minute of the pay period (11/17) with no transition to another program.
    As of 4/5 we will be on a long term disability program which has a one time $7,400 dollars built in to it. No program addresses our transportation needs.
    I’m willing to speak to anyone about this even if it means reprisal. I believe we were dropped by AUI for being vocal. I know of others that are afraid to speak.
    Best regards,
    Dan
    Brightback@yandex.com

  5. I read your article and it is now clear to me. I tend to fall on do not approve Arkansas Works side—opposite from where I was before reading your article explaining the program. I don’t consider a $100 million shortfall in the budget unattainable. I didn’t agree and don’t agree with all the tax reductions done by the legislature last year, mistake number 1. I think these republicans elected in last elections are naive if they think they are helping the state by reducing taxes and state agencies size!! I listen some to Paul Harrell who has been on a tear for a year on Obama care and now I understand why, but he is a “decrease the size” guy who is too far to the right in my opinion. These new legislators compare Texas’ ability to bring in factories to Arkansas saying our taxes are the reason–why are taxes in Texas, Mississippi, Louisiana and some surrounding states lower than Arkansas? Well let’s see, Arkansas population is 4 million, we have no oil revenue, no coastal tourism, no extremely large cities, our severance tax on abundant gas reserves are the lowest in the south and most of it is sold to Indiana. Arkansas is a poor state, thank God for Mississippi or we would have the lowest per capita income in the U.S..

    A friend who is a staunch Democrat told me that although Obamacare is a noble idea the country cannot afford it, this was back when it was first proposed, he was right!!
    I am sorry to ramble on but let’s look at La., Kansas and other states with recent Republican tea party governors—Louisiana tuition is up 80% for public colleges (thank you Gov. Jyndall?) same for Kansas—cut, cut, cut taxes is a temporary high!!
    The old saying still holds “you get what you pay for” go ahead you naive tea party state legislators, cut all these feel-good taxes in a balanced budget state, cut it to the bone—NOW WHERE ARE YOU GOING TO FIND THAT $100 million for prisons, the $$ for highway program, the $100 million for Hospitals unpaid bills, the so called “hole” in Asa’s budget. Governor Beebee had a surplus that Asa and Tea Party and other legislators will spend away and because of their zeal to cut to the bone, what services do you want to let Arkansans do without since you have done all these “feel good, good ole boy, slap on the back tax cuts???

  6. Hi, Bob. Thanks for reading and writing. I tend to think that the state should keep the private option but am pleased that you read my column and came to the opposite conclusion, because my goal in this debate is to be fair.

    Reading your post, it looks like you tend to oppose more spending but also oppose cutting taxes. I’m the same way, at least until we get our house in order. I call myself a “fiscal responsibilitarian.”

    Keep in touch. I’d love for you to subscribe.

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