The Arkansas Highways Plan Medicaid Asterisk

Jan 23, 2016

Left to right: Senate President Jonathan Dismang (R-Searcy) and Governor Asa Hutchinson (R).
Credit Michael Hibblen / KUAR News

The news this week was all about the governor’s highway funding plan but that doesn’t mean there wasn’t a good reason to talk about the unsettled issue of Medicaid expansion.

Toward the end of Governor Asa Hutchinson’s remarks on the highway proposal earlier this week he cautioned that all of it would need to be scrapped if the legislature doesn’t approve his reconstituted private option, which he calls Arkansas Works, in a special session this Spring.

“This all could be jeopardized if my budget, that I will present, is not acceptable to the legislature,” said Hutchinson.  “This budget with the surplus funds that are available, that I can allocate $40 million to highway needs in our state, is not workable if we do not have access to the federal funds that are part of the Medicaid expansion. I want to put that asterisk into the mix as we make this presentation.”

The governor is faced with the task of convincing three-quarters of the Republican-controlled legislature to re-authorize Medicaid expansion after many of them promised to kill its unique state-level manifestation known as the private option. The program uses federal Medicaid money to provide private insurance to those earning up to 138 percent of the poverty level. The expansion in eligibility and funding is part of the Affordable Care Act that a majority of states have opted into.

It appears that most Republicans and those in leadership are committed to passing Medicaid expansion. Opening a meeting of the health care task force, charged with making recommendations on the state’s Medicaid system for a Spring special session, Republican co-chair Charlie Collins of Fayetteville framed the far-reaching budget implications of Medicaid policy.

“They are not just policy decisions. They have massive impacts on the Arkansas budget and taxes over the next five years,” said Rep. Collins. “I’m going to continue to emphasize that. I know that’s kind of like the dumb guy at the party that keeps bringing up that nasty fact but if we don’t consider our policy decisions in the context of the financial complications of the budget we can live in a fantasy land that a decision on policy really is easier to make than it actually is when you consider the ramifications financially.”

The governor acknowledged House and Senate leadership for help in crafting the highway plan which is predicated on funds made available through Medicaid expansion.

“I want to applaud Speaker Gillam and President Jonathan Dismang. They have really been great partners in this, helping to formulate this plan. This is not just something that has come from the executive branch. This has been a joint effort,” said Hutchinson.

Those more aligned with the tea party wing of the Republican Party tend to dismiss that Medicaid expansion saves the state money to help pay for things like highways. In the past State Senator Bryan King has told me focusing on state-level impact shouldn’t come at the expense of a rising federal debt. He and State Senator Terry Rice, who recently resigned from the Health Care Task Force shortly after it endorsed the governor’s plan, simply don’t believe it’s possible to both denounce Obamacare while simultaneously supporting continued Medicaid expansion.

State Senator Dismang of Searcy took Rice’s place in the task force this week. Speaking about projected savings to traditional Medicaid based on changes suggested by consultants the Stephen Group he commented on the importance of clearly defining state Medicaid savings vs. federal savings. Dismang said achieving state savings is what ought to concern legislators.