Legislators give blessing to Hutchinson’s ‘Arkansas Works’ plan

The Health Reform Legislative Task Force voted 10-2, with four abstaining, Monday to endorse Gov. Asa Hutchinson’s continuation of the private option, known as “Arkansas Works.”

Legislators voted on a resolution saying they accepted a budget analysis presented Feb. 17 and in previous meetings that discontinuing the private option – officially known as the Health Care Independence Program – would substantially increase state Medicaid expenditures over the next four years while increasing the uncompensated care provided by medical providers. Members of the task force recommended that the full Legislature consider Hutchinson’s Arkansas Works program.

A health care special session is set to begin April 6 for the full Legislature to consider the legislation. It will be followed by the regular fiscal session, where funding will be determined. Arkansas Works would need the support of only a majority of legislators in the special session but would need a much higher bar of 75% support in both the House and Senate for funding.

Under the private option, the state uses federal Medicaid dollars to purchase private health insurance for adults with incomes up to 138% of the federal poverty level. The latest numbers released by the Department of Human Services showed that 262,987 were determined eligible as of Dec. 31, including those who had been shifted to traditional Medicaid because they were considered “medically frail.” At that point, the state was paying premiums on 200,703 policies.

The program has been controversial since it was created in 2013. In 2015, legislators at the urging of Hutchinson funded it through the end of this year while creating the task force to consider an alternative in the context of overall health care reform.

Voting in favor of the resolution Monday were the following: Sen. Jim Hendren, R-Gravette; Sen. Jason Rapert, R-Conway; Sen. Jonathan Dismang, R-Beebe; Sen. David Sanders, R-Little Rock; Sen. John Cooper, R-Jonesboro; Rep. Kim Hammer, R-Benton; Rep. Joe Farrer, R-Austin; Rep. Justin Boyd, R-Fort Smith; Rep. Charlie Collins, R-Fayetteville; and Rep. Reginald Murdock, D-Marianna.

Voting against the proposal were Rep. David Meeks, R-Conway; and Sen. Cecille Bledsoe, R-Rogers. Abstaining were Sen. Linda Chesterfield, D-Little Rock; Sen. Keith Ingram, D-West Memphis; Rep. Deborah Ferguson, D-West Memphis; and Rep. Michelle Gray, R-Melbourne.

Arkansas Works would differ from the private option in four ways. First, it would require adults with access to insurance through their employer to take advantage of that benefit rather than stay on the program. The state would provide assistance in paying the premiums.

Second, the state would mandate that able-bodied individuals with no income be referred to job training and job search programs.

Third, Arkansas Works would require enrollees with incomes above 100% of the federal poverty line to pay premiums of $19 per month, with those who fail to pay incurring a debt to the state.

Finally, Arkansas Works is meant to enhance program integrity by eliminating a provision where medical costs can be covered 90 days prior to enrollment. Instead, costs would be covered only upon enrollment. Also, the state would have the ability to end the program with 30 days’ notice to the federal government.

The private option will cost the state and federal governments $1.63 billion in 2017 and $9 billion over the five-year period, legislators were told Monday by Stephen Palmer with The Stephen Group, the consulting firm hired by the task force.

Palmer said ending the private option would have a $757 million impact on the state budget from 2017-21, including an increase of $213 million in state expenditures over that five-year period and a reduction of tax revenues by $544 million. The state, which has paid little for the program to this point, begins paying 5% of the cost in 2017, a number that increases to 10% in 2020.

With 75% of the vote required for funding, Arkansas Works can be killed by 26 representatives or nine senators in the fiscal session. Passage became easier after voters March 1 re-elected six legislators who had voted in support of Hutchinson’s health initiatives who faced opponents who opposed the Medicaid expansion.

Speaking to the Political Animals Club at the Governor’s Mansion March 2, Hutchinson said the victories did not necessarily mean Arkansas Works will pass, but they did mean the program has “a boost of momentum.”

“Arkansas Works was on the ballot in the context of those who believe in providing common sense, practical solutions for Arkansas,” he said.

He later told reporters that, had those legislators lost, other legislators who support Arkansas Works would have been fearful of voting for it lest they be targeted by an opponent.

Hendren, the chairman of the Health Reform Legislative Task Force, said on March 2, “The election could have ended any hope for a compromise path forward. It didn’t. It’s still a tough road, but voters said they actually kind of like it when people work together and find reasonable solutions. So we’ll see.”