Westerman Bill Would Fund Highways With Private Option Dollars

A bill filed in Congress Thursday by U.S. Rep. Bruce Westerman would transfer part of the money used to pay for Arkansas’ private option to the Highway Trust Fund.

The Prioritizing American Roads and Jobs Act would bring funding for expanding the Medicaid population – currently paid 100% from federal funds – down to the same level as traditional Medicaid funding. According to Westerman, the federal government funds traditional Medicaid at an average of 57% nationwide, and in Arkansas at 70%.

Westerman said reducing that funding would free $30 billion a year. Under the act, half would go to the Highway Trust Fund, and half would be used to reduce the federal budget deficit.

Congress is struggling to determine how to fund the nation’s highway system. The federal government’s highway funding authorizing bill, MAP-21, is set to expire this month. The House voted to extend it through July on Tuesday, and now the bill is in the Senate.

The Highway Trust Fund, which disburses money to states, is set to become insolvent in August without an infusion of money. The current funding mechanism, the fuel tax, has not not been raised since 1993 and produces less money than previously because cars are becoming more fuel efficient and therefore use less fuel.

Westerman said he was looking for a long-term solution and that it is an “injustice” that the federal government only reimburses a percentage of the costs for aged and disabled traditional Medicaid recipients, but reimburses all of the costs for the expansion population, which includes able-bodied adults with incomes from 17% to 138% of the federal poverty line.

That money funds Arkansas’ private option, the program that uses Medicaid dollars to buy private insurance for that population. Arkansas’ uninsured population has decreased since the private option was created, but critics say it adds to the federal budget deficit and that the cost to Arkansas will be unsustainable as the federal reimbursement rate moves as scheduled from 100% to 90%.

Westerman voted against the private option while in the Legislature. He said the Prioritizing American Roads and Jobs Act would not become effective until January 2017. Under a law passed by the Legislature this past session, the private option will expire at the end of 2016. A task force is studying whether and how to replace it in the context of overall Medicaid reform.

Some transportation advocates support increasing the fuel tax, but the idea does not have much support in Congress. Westerman doesn’t support it, either.

“As long as we’ve got our priorities wrong on the spending, I’m going to be a hard sell on increasing the fuel tax, and I think there’s a lot of people in Congress in that same position,” he said.

Westerman said the bill likely will be assigned to the House Energy and Commerce Committee and its Health Subcommittee, and it also will go to the House Transportation and Infrastructure Committee.

“I’m in this to pass a bill and make a change, and I’ve got to wake up every day thinking that’s what’s going to happen,” he said.