Sen. Dismang: Private Option May Have Cut Disability Applications

Adult applications in Arkansas for a type of Social Security Supplemental Security Income disability program have fallen 13% in the past year, according to Sen. Jonathan Dismang, R-Searcy, the incoming Senate president pro tempore – a drop he attributed in part to the state’s “private option.”

Dismang, one of the private option’s primary architects, made his comments before and after a panel discussion Saturday at the Southern Governors Association annual meeting in Little Rock. The panel discussion about changes in Arkansas health care policies also included Gov. Mike Beebe, Kentucky Gov. Steve Beshear, and Maryland Gov. Martin O’Malley.

Dismang said he learned of the drop in SSI Title 16 payments after contacting the State Department for Social Security Disability Determination offices Friday. He said the number of applications had been rising for at least seven years.

He said it’s too early to tell what caused the drop – the improving economy could be a factor – and said the issue needs to be subjected to academic study. However, he said the private option could be a factor.

The private option was created by the Arkansas Legislature and Beebe’s administration in response to the Affordable Care Act, otherwise known as Obamacare. Under a U.S. Supreme Court ruling, states have the option of expanding or rejecting increased Medicaid funding. Arkansas legislators in 2013 instead chose to use those dollars to purchase private health insurance for lower income Arkansans.

About 200,000 Arkansans have received insurance coverage as a result of the private option. According to a recent Gallup survey, Arkansas led the nation in reducing its uninsured rate from 22.5% of the population to 12.4%. An Arkansas Hospital Association survey found a 30% decrease in uninsured hospital admissions and 24% fewer uninsured emergency room visits comparing January-March 2014 with the year before.

Arkansas is one of 26 states that used some vehicle for expanding Medicaid coverage, said Barbara Lyons, director of the Kaiser Commission on Medicaid and the Uninsured. Twelve Southern states did not expand their rolls, resulting in an estimated loss of $316 billion in federal dollars over 10 years, including $127 billion for hospitals, she said. She said expanding the Medicaid rolls would have insured five million people.

Opponents argue that the private option is too expensive and its funding too uncertain. The federal government currently pays 100% of the costs of insuring those Arkansans, but in 2017 Arkansas will pay 5%, a number that rises to 10% in 2020. The cost to the federal government is expected to be $1.59 billion in fiscal year 2015 and $2.35 billion in fiscal year 2020. No opponents of the private option spoke during the panel discussion.

The private option must be passed with 75% majorities in both the House and Senate. It barely passed in 2013 and was barely reauthorized in 2014. Beebe said he thought it would survive, potentially with tweaks, as long as nearly three-fourths of the Legislature support it.

“You’re not going to take an overwhelming majority of the Legislature and let a small minority of that Legislature wag that tail to the point that they’re just going to roll over and play dead, in my opinion,” he said. “I mean, I’ve been watching this stuff 32 years. We wouldn’t have done that when I was a senator.”

Dismang said he disagreed with that assessment.

“I don’t think it’s going to happen on its own, and it’s not going to happen without changes, if not significant changes, to the program,” he said in an interview.

Dismang said the private option’s future will be influenced by what kinds of rates insurance companies announce they will be charging this October. He said passage could be tied to workforce development if proponents can show it is encouraging people to work rather than rely on government benefits, which is why the drop in SSI applications could be important.

“I know that’s where an interest is, and that’s probably, I would think, where a compromise would originate,” he said.

Puerto Rico Gov. Alejandro Garcia Padilla and Virgin Islands Gov. John de Jongh also participated in the discussion. Talk Business & Politics editor publisher Roby Brock served as moderator.