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

In mid-December, I wrote that legislators would decide how to reform health care in Arkansas by the end of the month. As the TV character Maxwell Smart used to say, “Missed it by THAT MUCH.”

What legislators actually did was give Gov. Asa Hutchinson a few months to negotiate with the federal government – and then sometime next year they’ll decide how to reform health care. It will be a “cage fight,” in the words of Sen. Jim Hendren, R-Sulphur Springs, chairman of the Health Reform Legislative Task Force (and Hutchinson’s nephew).

The task force was created last year to determine what to do about Medicaid and the private option. Medicaid is the health care program for the poor, the aged and disabled. The private option is the Medicaid program that buys private insurance for Arkansans with incomes up to 138 percent of the federal poverty level. The private option, which was created in 2013, currently is funded entirely by the federal government, but Arkansas begins paying 5 percent in 2017 and 10 percent by 2020.

The private option provides health insurance for about 200,000 Arkansans. It is the primary reason the state has cut in half its number of uninsured residents, lessening the unpaid care provided by hospitals. But critics believe it is an unacceptable concession to Obamacare that eventually will cost the state a lot of money. It must pass with 75 percent support from each house in the Legislature each year, which means nine senators can kill it.

Hutchinson, who wants to keep it, persuaded lawmakers this year to fund it through the end of 2016 while his administration and the task force create an alternative. He’s proposed a sequel, “Arkansas Works,” that like many sequels looks a lot like the original. It would, however, involve more personal responsibility on the part of beneficiaries, including requiring those with higher incomes to shoulder part of the cost for what is now essentially free health care.

Those changes will require a waiver from the federal government that Hutchinson has already started seeking. In January, he’ll meet with Sylvia Burwell, secretary of the Department of Health and Human Services. He’ll probably get part of what he wants because Burwell will know the private option is on shaky ground. But he already knows he won’t get everything he’d like.

He requested and received the task force’s blessing to proceed. During a voice vote on a motion supporting his efforts Dec. 16, zero legislators voted no.

But legislators weren’t necessarily endorsing Hutchinson’s overall goals. Sen. Cecille Bledsoe, R-Rogers, a private option opponent who had led the task force in applauding Hutchinson the day before, didn’t vote at all. She’s not opposed to seeking waivers because it can’t hurt to ask. But she remains deeply concerned about the program, whatever it’s called. Among her fears is that the federal government won’t hold up its end of the bargain of paying 90 percent, forcing Arkansas to pay more.

The next few months will be eventful. Hutchinson will request and then await the waiver. On March 1, Arkansas’ party primary elections could reduce the number of pro-private option lawmakers, though the new officials won’t take office until January 2016. There will be a fiscal session after the primaries and then a special session regarding health care that could be a doozy.

Somewhat surprisingly, the biggest debate for now is not about the private option but about adopting a managed care model where a private company would be contracted to manage parts of Medicaid. Even the Arkansas Department of Human Services’ director, John Selig, says private companies could better manage some services than DHS can.

But DHS’ record on contracts has been disappointing lately – the most notable example being a computer system for tracking Medicaid re-enrollments that is $100 million over budget. And not everyone supports managed care, anyway. Opponents include a group of mostly Republican legislators who make their livings in health care and believe Arkansas would be better served expanding the reforms it’s already undertaken. So the same day the task force gave Hutchinson its blessing on the waiver, it also instructed its consultant, The Stephen Group, to see if it could find enough savings over five years using the current model to cover the state’s 10 percent in 2020. Then lawmakers will decide if that route is better than managed care.

So changes are still coming to Arkansas health care. It’s just the cage fight will be next year, not this past one.

***

For additional reading: Is health care a commodity or an entitlement? Neither.

For legislators, The Stephen Group report was an ink blot test.