Gov. Beebe Goes All In On Medicaid Expansion

As we reported nearly two weeks ago, Gov. Mike Beebe has received formal word from the federal government that Arkansas could opt out of an expansion of its Medicaid program in future years. Today, Beebe said he’s firmly committed to the expansion.

Beebe told reporters on Tuesday (Sept. 11) that he thinks it will help people currently without insurance.

“He’s confirmed that nothing else is in the way to endorsing full expansion of Medicaid,” Beebe spokesman Matt DeCample tells Talk Business.

Arkansas officials estimate expanding Medicaid could help insure another 250,000 uninsured Arkansans and could create $372 million in savings to the state’s program.

GOP lawmakers have expressed skepticism at the estimate and say they have concerns about the costs of expansion.

The U.S. Supreme Court ruling in June upheld the individual mandate portion of the federal health care law. It also said states could not be penalized for opting out of a provision calling for expansion of Medicaid, a health insurance partnership between the states and federal government to help poorer citizens.

Beebe has said often that while the federal government will pay 100% of the costs of expansion from 2014 though 2017, he wanted the option for the state to opt out once Arkansas would be required to pay a portion of the costs, assuming a financial burden might complicate its participation.

Over the next few months, Beebe is expected to share information and facts throughout the state, DeCample said. “As we get closer to January, the strategy is to disseminate as much information as we can to show what the positive benefits will be,” he said.

DeCample added that rural hospitals and physicians may stand to benefit the most from a Medicaid expansion.  He also said that the expansion would require full participation for eligible citizens.

“Our understanding from CMS [Center for Medicare and Medicaid Services] is that while you have the flexibility to opt-in and then opt-out later, it’s an all or nothing choice.  We don’t get to approach it incrementally,” he said.

In a separate announcement, the Beebe administration also disclosed that late last week CMS gave its official approval of a state Medicaid plan to alter its payment model from a “fee-for-service” system to a “bundled payment” system.

Arkansas Medicaid officials had been planning for more than a year to modify the payment model in an effort to squeeze savings from the program that it predicts could be facing a $250 million to $400 million shortfall.

“This is a true milestone for the Medicaid program and the last hurdle for initial implementation of our transformation efforts,” said Andy Allison, Arkansas Medicaid Director. “The new system is the first of its kind in the nation, giving the Arkansas and CMS teams the rare opportunity to bring fresh ideas to the table.”

The first phase of the program was initiated in July 2012.