Beebe defends private option savings, takes shot at Whirlpool

Gov. Mike Beebe said Tuesday (Feb. 4) there are a “multiplicity” of reasons Arkansas Legislators should vote to fund Arkansas’ private option plan, and he also took a shot at Republican gubernatorial candidates who “don’t understand the budget” with respect to the private option.

Beebe was interviewed Tuesday by Roby Brock as part of the “Talk Business” Internet broadcast series. Topics of the interview included Arkansas’ economy, prison and parole issues, and his plans for life after he leaves the governor’s office in January 2015.

PRIVATE OPTION POLITICS
In the 2013 Arkansas General Assembly, a bipartisan group of state lawmakers, led by Republicans Sen. Michael Lamoureux and Rep. Davy Carter, worked with Beebe to push through a plan that allows Arkansas health officials to steer Medicaid expansion funds from the Affordable Care Act – aka Obamacare – into private health insurance plans. Arkansas officials obtained permission in early 2013 from federal officials to use Medicaid expansion money promised in the federal health care law to subsidize insurance for low-income Arkansas workers. The money would help some previously uninsured citizens who earn up to 138% of the federal poverty level to obtain insurance. By some state estimates, that universe could include as many as 250,000 Arkansans.

Funding for the private option narrowly passed both chambers of the Arkansas General Assembly in 2013 and is expected to come up for renewal funding in February 2014. Some Republican members of the Arkansas Legislature plan to block funding, a move that could leave the state without a mechanism to process increased federal funding of the Medicaid program in Arkansas.

Brock asked Beebe to explain how the private option plan saved Arkansas $89 million to those who are skeptical of that number. Beebe agreed that some are skeptical.

“Including, apparently, some people running for governor that don’t understand the budget,” Beebe quipped.

Beebe did not mention a name, but Republican gubernatorial candidate Asa Hutchinson recently said claims of benefits from the private option plan are the result of “fuzzy math.” Hutchinson is the presumptive GOP nominee who is likely to face former U.S. Rep. Mike Ross for governor. Beebe is backing Ross.

Beebe said the savings come from several sources, including reduced spending on uncompensated care to hospitals and savings from reduced spending on those enrolled in Medicaid.

“The combination of all those moves saved state general revenue between $80 (million) and $90 million dollars,” Beebe explained.

PRIVATE OPTION AND TAX CUT DEAL
He added that the private option deal was coordinated with a tax cut deal that reduced state revenue by about $86 million. Beebe argued that if legislators now come back and nix private option funding, they will see a return to higher medical costs for the state and the lost revenue from the tax cuts.

“That money has already been spent by giving back it back to the taxpayers,” Beebe said of the tax cut deal. “If you don’t have the private option, then the money that you saved and the money that you otherwise have given back to the people and those folks that are now being paid for by the private option will no longer be paid that way.”

Beebe said the vote during the upcoming fiscal session “will be a close vote.” But he believes Legislators will ultimately “deal with logic and money” and set aside ideology.

“You can hate Obamacare and you can hate what they are doing in Washington. What Arkansas did, in a bipartisan manner, Republicans and Democrats leading together, is to take something and make something better out of it. It’s the alternative to strict Obamacare. It’s something different, and it’s now being copied by Republican Legislatures and Republican governors across the country,” Beebe said.

‘MULTIPLICITY OF ARGUMENTS’
Beebe said there are a “multiplicity of arguments” for funding Arkansas’ private option plan, with one of those reasons being that 100,000 more Arkansans enrolled in Medicaid.

“These aren’t deadbeats. These are working folks that work for people who do not carry insurance and they don’t make enough money to be able to have their own individual policy,” Beebe said.

He also said Arkansas’ businesses are estimated to save $38 million a year by not having to pay penalties under Obamacare. Also, private option funding will help Arkansas hospitals, especially rural medical operations.

“The hospitals are paying for this whether we take it or not,” Beebe said. “There will be some small hospitals that may or may not make it as a result of this.”

OTHER TOPICS
Beebe took listener questions on several topics. Following are some of the topics and Beebe’s responses.

• Prison policy
As to Arkansas’ prison system, Beebe said systemic issues with the parole process has resulted in “lax treatment” of some who fail to meet parole requirements. But he said the fix to that has to be balanced with how many people Arkansas can afford to jail. He said there are about 2,700 “backed up in county jails” that are state prisoners.

“We’re going to have to open some more beds,” Beebe said, and find the revenue to pay the counties for housing the prisoners.

Beebe has proposed about $45 million in the next budget to help alleviate the problem. He said the money could be jeopardized if the Legislature nixes private option funding.

• Tax cuts
Beebe said his administration has proposed and pushed the effort for more tax cuts “than anybody in the history of Arkansas. Any Republican, any Democrat, any governor in the entire history of our state.”

Beebe said the combined tax cuts during his years as governor total close to $1.3 billion, with much of that through the reduction in the sales tax on groceries.

“But we do it in a responsible manner so that we don’t impact essential services like education, or like public safety with the prisons or any of the other things that the state has to be able to provide,” Beebe said.

• Post-retirement
Following a question about how he planned to use his “extensive knowledge” of public policy once he leaves office, Beebe joked that he would use a lot of that knowledge “at the coffee shop.”

“Certainly I’m not going to roll over and play dead, but I don’t have any specific plans to do anything full time,” Beebe said.

Beebe said his official papers will go to his alma mater, Arkansas State University in Jonesboro.

• Arkansas job numbers
When asked about Arkansas’ labor force numbers still being below levels prior to the beginning of the Great Recession in 2008, Beebe said the state often lags the nation when coming out of an economic downturn. He expressed confidence that the state’s job figures will recover.

“I think it’s a timing thing,” he said, and added that a possible help could come from the effort by Bentonville-based Wal-Mart Stores Inc. to return manufacturing jobs to the U.S.

But manufacturing jobs may not fully recover, Beebe said, and was pointedly critical about Whirlpool’s decision to close its refrigerator manufacturing plant in Fort Smith. Benton Harbor, Mich.-based Whirlpool closed the plant, which at one time employed as many as 4,600, in mid-2012.

“You know, when Whirlpool takes their marbles and goes to Mexico, I mean, we need policies that punish the heck out of companies that take their business, their manufacturing and take it for cheap labor outside this country. That’s another problem on the national level that I detest,” Beebe said.