Category Archives: Legislature

Looking ahead to an eventful 2016

Legislature, Politics, State government, Uncategorized

Calendar turning copyBy Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

Happy new year. In Arkansas politics, it’s going to be an eventful one.

In January, Gov. Asa Hutchinson will meet with U.S. Department of Health and Human Services Secretary Sylvia Burwell to request a waiver for “Arkansas Works.” That’s his version of the private option, the program that uses federal Medicaid dollars to purchase private insurance for lower-income individuals. He’s asking for changes that will require more personal responsibility on the part of recipients, and which will make it more acceptable to Republican legislators. Those legislators will vote on Arkansas Works, or something like it, in a special session focused on health care in the middle of the year.

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Next year’s health care ‘cage fight’

Health care, Legislature, Politics, State government

CapitolBy 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.

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

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

Reforming health care – next week

Health care, Legislature, State government

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

Next week – Dec. 15-17, to be precise – a legislative task force will try to reform health care in Arkansas while deciding what to do about the state’s most contentious issue in years. That’s all.

Here’s the background. After the passage of Obamacare and then a U.S. Supreme Court decision on the matter, states could choose whether or not to expand Medicaid, which provides health care to poor Americans and others. Blue states said yes to the expansion. Most red states like Arkansas said no.

Arkansas said, “Yes, but …” Instead of expanding Medicaid, it would use that money to buy private insurance for Arkansans with incomes up to 138 percent of the federal poverty level.

The program has insured 250,000 Arkansans at its height. In fact, Arkansas has led the nation in reducing its uninsured population. Several states have followed its lead and adopted or considered their own versions. However, some legislators are opposed because the state is scheduled to begin paying part of the cost in 2017, and because this is Obamacare, and because it contributes to the national debt.

The private option barely passed in 2013 and barely was reauthorized in 2014. Because money is being spent, passage requires a three-fourths majority, which means nine senators can block it.

Instead of having yet another political battle this year, Gov. Asa Hutchinson asked legislators to fund it through 2016 and, in the meantime, reform it along with the overall Medicaid program. To accomplish that task, a Health Reform Legislative Task Force has been meeting this year and will make its report by the end of this month. Their big meeting is scheduled for Dec. 15-17. Then there will be a special session next year where the full Legislature will vote.

The task force was composed of about half private option supporters and half opponents. It hired a national consultant, The Stephen Group, that offered suggestions for changes but certainly didn’t advocate scrapping it.

Hutchinson has offered his own reforms, similar to The Stephen Group’s, that he’s calling “Arkansas Works.” Speaking to a health care group this week, he insisted the private option would end on Dec. 31, 2016. But while Arkansas Works clearly changes the private option, it’s not radically different. The government still would pay for poor people’s private health insurance.

The changes instead would make it less of a welfare program. Beneficiaries who work would be required to be insured through their employer when available rather than through the private option, with the state chipping in to help with costs. Those who don’t work would be required to obtain work training. Recipients earning at least 100 percent of the federal poverty level – and maybe some making less – would be required to pay part of the costs for what is now free health care. Those who don’t pay would lose their health insurance and be locked out of the system for a period of time. Hutchinson also floated the idea of a lifetime cap, meaning a person can’t stay on the private option forever.

Hutchinson said the program must cut costs, explaining, “We have to have the savings if we’re going to do what I believe is our responsibility, and that is to cover that expanded population.”

Note that Hutchinson said covering those people “is our responsibility.” It’s been clear since his 2014 campaign that while he might want to change the private option, he doesn’t favor replacing it with nothing.

Nor do that many legislators. There are some, but even many of those who originally opposed it now would keep something in its place. Otherwise, many Arkansans would lose their health insurance and go back to waiting until they are really sick and then accessing the health care system without insurance – and their local doctors and hospitals would eat the cost. If that happens, hospitals will close. It’s happened in other states.

Actually, the private option isn’t the biggest controversy now. The big debate is about whether the state should adopt a managed care model where parts of the Medicaid system would be run by a private company and not the state. Supporters say it would create efficiencies. Opponents say managed care companies will take taxpayer dollars and skimp on care and on payments to providers. Several Republican legislators – generally they work in health care somehow – are among the opponents.

That debate is worth more space, but I only have 750 words to talk about health care. The task force, meanwhile, has one more week to reform it.

Voters: Better roads, same taxes

Legislature, State government

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

One thing is clear from two recent polls: Arkansans want better roads, but they don’t want their taxes raised much to pay for them.

The latest poll comes from the Arkansas Good Roads Foundation, a group that supports more highway spending. It released a poll this week where 98 percent of likely voters said roads and bridges are important for economic development and job growth.

But roads and bridges have a problem. Traditionally, they’e been funded by gas and diesel fuel taxes paid at the pump. The 18.4-cent-per-gallon federal gas tax (24.4 cents for diesel) hasn’t been raised 1993, while Arkansas’ 21.5-cent gas and 22.5-cent diesel taxes have been the same since 2001. Those taxes were not indexed to inflation, so Arkansans are paying the same 39.9 cents they were paying in 2001. As in most walks of life, 39.9 cents does not buy the same now as it did then.

Adding to the problem is that vehicles are becoming more fuel efficient, so drivers buy less gas and pay less in gas taxes to drive on roads becoming more expensive to construct and maintain. Drivers who can afford gas-electric hybrids pay less, while electric car drivers pay almost nothing.

The whole idea behind the gas tax is that it’s a user fee: The government service is funded by the citizen benefitting from it. But that stopped being the case in 2008, when fuel tax revenues at the federal level stopped being sufficient, and Congress started filling the gap with transfers from the general fund – the one running a $439 billion deficit in 2015.

In other words, the highways we’re driving on are being partially funded by the passengers riding in a child safety seat in back. Then when they become adults, they’ll pay to fix those worn out roads, unless they follow our example and stick their own kids with the bill.

Some highway funding supporters say the simplest fix is just to raise motor fuels taxes for now and figure out how to address the shortfall caused by increasing fuel efficiencies later.

But that’s clearly a no-go with voters. The Good Roads Foundation poll found a gas tax hike had the support of only 32 percent of respondents, with 53 percent opposed – 40 percent strongly so. When pollsters offered more detailed ideas, they found that 53 percent would support a 2-cent-per-gallon increase. After that, the numbers dropped fast: Only 32 percent would support 5 cents, and only 17 percent would support 10 cents.

Those numbers confirm the results of a poll released a couple of months ago by the Arkansas chapter of Americans for Prosperity, which is always against all tax increases. That poll found that while half of Arkansans believe that the condition of the state’s roads is “a major problem that deserves attention,” 64 percent oppose raising fuel taxes to address it.

What 63 percent of Arkansas do support, according to the Good Roads Foundation poll, is shifting new and used car sales tax receipts to highways. That money currently goes into general revenues, where it pays for everything else – schools, prisons, and health care services, mostly. Obviously, more money for highways means less money for those things.

A group appointed by Gov. Asa Hutchinson to sort through all this, the Governor’s Working Group on Highway Funding, is sending him a menu of options. Most members would like to increase highway funding however they can. But Hutchinson has made it clear he will support no plan that increases overall government revenues or taxes. Earlier this year, one of the members of that working group, Rep. Dan Douglas, R-Bentonville, proposed a bill that would have done what those 63 percent of Arkansans said they supported: transfer car sales tax revenues to highways. At the time, Hutchinson was opposed, but money doesn’t grow on trees, and maybe something can be worked out.

Seventy percent of Arkansas highway construction dollars come from the federal government. This week, Congress did what it has not been able to do in a long time: produce a long-term highway funding bill. If passed, it will provide an additional $50 million for Arkansas each of the next five years.

To qualify for all of it, the Arkansas Highway and Transportation Department must find matching money somewhere – which is the problem it already has. At least it’s not a new one.