Three Questions (Four, Actually) With Sen. Jim Hendren

Today begins an ongoing feature on Talk Business & Politics’ health channel, “Three Questions,” where health leaders and policy makers are asked to respond to three questions about important health care issues.

Except today’s subject, Sen. Jim Hendren, was asked four. The Sulphur Springs Republican and nephew of Gov. Asa Hutchinson is at the center of today’s debate over health policy. A longtime private option opponent, he helped his uncle broker a compromise where legislators funded the private option through 2016, when it is supposed to end.

In the meantime, Hendren sponsored a bill creating the Health Reform Legislative Task Force to study overall health care reform, including what to do about the 218,376 Arkansans now served by the private option, and report back to the governor.

Hendren co-chairs that committee – his second major effort at health care reform. He also chairs the cost-saving and efficiency-creating State & Public School Life and Health Insurance Task Force.

TB&P asked him about what the future holds for health policy, and what he’s learned from the past.

TB&P: You’re co-chairing a committee that’s supposed to create a preliminary report for reforming health care in about six months. How can you possibly do that?

Sen. Jim Hendren: Reforming health care in Arkansas is a monumental task. Annually, we spend nearly $5 billion on Medicaid and currently about $1 billion on the expansion population (state and federal). Also, we have a role to play in the state/fed partnership exchange. We will not have all the answers or even discovered all the questions prior to our preliminary report.

We will begin by addressing the programs that are ‘time sensitive.’ Medicaid expansion/private option is set to expire in 18 months unless the Legislature acts. What the state will do upon expiration of our waiver for the private option simply must be addressed in the preliminary report. We will also identify ‘low hanging fruit’ identified in the current Medicaid program. Complete overhaul and reform will certainly continue through 2015 and probably beyond.

TB&P: How does the King v. Burwell decision affect your approach?

Hendren: Regardless of what people thought of how the SCOTUS (Supreme Court of the United States) should rule, at least we have a decision and know what the rules will be so as to determine which plays to run. The number of dollars and risk to the state budget from the partnership exchange is not nearly as severe as we face in Medicaid and the private option. However, the impact that the exchange has on Arkansas’ private insurance and any program utilizing private insurance must certainly be considered. I know there are strong feelings on both sides of the conversion to a state exchange, and we will have a hearing to educate ourselves on the pros and cons.

TB&P: You were an outspoken opponent of the private option. Can you imagine a scenario where the private option is ended and there is absolutely nothing to replace it?

Hendren: I think that’s a bit of a false assumption. There was a method for providing medical services to this population prior to the private option. While most would agree that simply paying hospitals for care provided at emergency rooms is inefficient, taxpayers were spending nearly 30% of the total cost of the private option on just that. We are still providing significant dollars to hospitals and providers for uncompensated care. So, will we go to ‘absolutely nothing’? No – federal law wouldn’t allow it and most people would not accept a system that turns people away from emergency rooms or lifesaving care because of inability to pay or because of lack of insurance. The question is, can we come up with something better than uncompensated care that’s affordable, sustainable and politically viable? I think it will be difficult, but not impossible.

TB&P: You chair a task force in charge of reforming state and school employee health insurance plans. What have you learned from that experience that is helping you with your task force chairmanship?

Hendren: Just because lobbyists, legislators, commentators and ‘experts’ say something is so, doesn’t make it so. The ‘facts’ and assumptions about why the teacher’s insurance program was a mess were almost all wrong. It was remarkable what the data told us once we got it back. I expect to see some surprises as we look at data on Medicaid and the private option as well.

When faced with a worse outcome, the Arkansas Legislature can do hard things. Removing part-time employees, reducing benefits for weight reduction surgery, eliminating zero dollar deductible plans, increasing plans’ premiums to reflect actuarial value, and eliminating spouses who have coverage elsewhere were all hard things. These are things the private sector had done years ago. If we had not done these things, the program could not have been sustained and rates would have continued to skyrocket. I was proud of the bi-partisan implementation of a hard solution, but I’m not sure we would have succeeded without a crisis. It was a good trial run for what lies ahead – except with a couple more zeroes on the end.