In a new series, Cash & Candor, Arkansas Money & Politics / AY Magazine Editor Caleb Talley aims to shoot it straight when it comes to business and politics in and around the Natural State. Talley comes to AMP by way of the Arkansas Delta, where he spent the last two years calling balls and strikes at the Forrest City Times-Herald. Read more Cash & Candor here.
Arkansas lawmakers will have a lot on their plates when they return to the Arkansas State Capitol next month. And while the future of state highway funding will loom large over the session, I doubt it will be the most controversial issue debated at 500 Woodlane.
My prediction for the most contentious battle of the 2018 fiscal session goes to Arkansas Works, the state’s hybrid Medicaid expansion. It’s same old song and dance, but with a slightly new twist.
To understand where we’re going, let’s first see where we’ve been.
In 2013, Arkansas’ Democratic governor, Mike Beebe, and a Republican-controlled legislature led the nation by creating and implementing an alternative to Medicaid expansion that used Medicaid funds for premium assistance to purchase private health care plans for Medicaid-eligible individuals. (Say that five times fast.)
In 2016, Republican Gov. Asa Hutchinson succeeded in getting his overhaul of Medicaid expansion approved. Under the revamped program, dubbed “Arkansas Works,” enrollees above the poverty level paid very modest premiums for coverage – approximately $13 a month in 2017 – and unemployed enrollees were referred to job training.
Last year, lawmakers approved even more changes to the state’s expanded Medicaid program, though they have not yet been implemented.
During a May special session, the General Assembly approved measures that would cap Medicaid expansion eligibility at 100 percent of the poverty level, rather than 138 percent, as it is now. The measures also included a requirement to work or seek work for some Medicaid enrollees and gave the state control of eligibility determination with a new computer system that is now in place – a program that tracks an enrollee’s income through various agencies and whether or not they receive benefits from another state.
These changes lie in wait, though, requiring approval from the federal government. And though the update seems like something the Trump administration would love to bite, the state has yet to receive the waiver needed to move forward.
According to his staffers, Hutchinson remains optimistic that the changes will get the green light in 2018. On Thursday, the governor’s communications director, J.R. Davis, assured listeners of a Little Rock-based conservative radio show that federal approval was just around the corner.
And it better be, otherwise there’s a good chance that the entire Arkansas Works program will fail to receive reauthorization once legislators convene for the fiscal session. As pointed out by the AP’s Andrew DeMillo last week, the numbers don’t exactly look good for those looking to continue to the program, which has extended health care to about 300,000 Arkansans. Two vacancies to the state senate leave supporters just a vote short of the three-fourths majority needed to keep the program afloat.
But if lawmakers stopped blowing smoke up our butts long enough to look at the numbers, they might find real results in the hybrid Medicaid expansion program.
With roughly 300,000 previously uninsured Arkansans now on the rolls, there has been a significant decrease in unpaid care at Arkansas hospitals, especially in low-income, rural communities. As a result, Arkansas has managed to evade the epidemic of hospital closings and staff reductions that have plagued surrounding states that chose not to expand Medicaid.
A case study conducted by the Arkansas Center for Health Improvement found that one hospital system reduced its staff by 97 employees in a Missouri unit, while adding 198 employees in its rural Arkansas counterpart. Between 2013 and 2015, Baptist Memorial significantly reduced staff in its Mississippi and Tennessee hospitals, while increasing its Jonesboro facility by 250 employees. Neighboring Texas, which has the highest uninsured rate in the country, saw 18 rural hospitals close since 2013.
And as much as the program costs, it would be even more expensive to toss out. Arkansas lawmakers would be wise not to forget the impact ending the program would have on the state’s finances. Opting out of Medicaid expansion would tear a massive hole through the budget, with approximately $130 million in our own federal dollars being taken away and given to other states.
If lawmakers are struggling to find the $50 million needed for highway funding each year, where the heck do they expect to find $130 million? Sometimes, hard figures and common sense ought to eclipse the partisan pissing match.
Maintaining Arkansas Works, especially in its updated form, would actually save the state money over the next few years, as long as it’s managed effectively and sustainably. And the governor, along with state Department of Human Services Director Cindy Gillespie, has been working overtime to make the Medicaid budget, in general, more palatable to legislators on the fence.
On Thursday, Hutchinson announced a nearly half-billion-dollar decrease in the requested Medicaid budget for fiscal year 2019. That did, however, mean removing more than 117,000 Arkansans from the Medicaid rolls. Expect roughly 30,000 more to be removed if the updates to Arkansas Works are approved by the Trump administration.
It will be a while before the impact, if any, of that downsizing on rural hospitals is known. But it will be nothing compared to the impact of eliminating Medicaid expansion altogether. Hutchinson knows that. And, though they’ll spend the spring talking in circles, our state legislators know it, too.
But don’t expect a final decision until May, after a special election fills the two vacant seats in the state senate. I see a special session with Arkansas Works written all over it.
