Medicaid expansion requires Medicaid reform

Editor’s note: John Burris is a former member of the Arkansas Legislature. He now provides consulting services, and one of his clients is a managed care company.

Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.
–––––––––––––––––

The Healthcare Reform Task Force voted on March 7 to support Gov. Asa Hutchinson’s plan for continued insurance coverage for low-income earners. It’s called Arkansas Works, and it has great potential to disrupt the delivery system envisioned by the A.C.A. (Affordable Care Act) and supporters of a single-payer system. With the exception of one, Democrats refused to vote for the Governor’s proposed plan, all while insisting they support it.

Eight members of the task force also voted for the governor’s plan to align our traditional Medicaid program with the approach of most other states. Here, we over-treat and over-pay, especially in the high costs areas. Historically we’ve also had a niche for the political corruption that helps keep it that way, all at the expense of the patient. Most other states pay for performance and measure success by the outcome, not the amount spent. The governor has proposed to change that.

Now he and the entire legislature must make the final decisions.

In some ways, it might be easier to find consensus in the broader body than it was to find it on the task force. There, because of the small number of members, the loudest few could dominate the discussion. And there were loud ones. They could roadblock a path if they didn’t like where it was heading, even if it made sense to most. I suspect many other members are now ready to have their say on how we should reform our state’s largest category of expense, rather than simply deferring to scaled down pre-determined menu of options.

In the full legislature, Arkansas Works faces a difficult but not impossible road to authorization. A majority must support it in the soon-to-be-called special session. Then, in the fiscal session, three/fourths of the same legislature must agree to not vote against the Department of Human Services (DHS) appropriation, which would keep all of Medicaid from being funded, simply because the funding for Arkansas Works is included. A small minority can block an appropriation, but only a majority can change a policy. A stand off is possible, where the idea with the most votes isn’t guaranteed victory.

Things have happened to help the governor’s cause to prevent a DHS shutdown. First, his preferred candidates won key legislative races, including three senate races where his approach to healthcare was the defining issue. Second, he’s picked a reasonable policy. Arkansas Works keeps accepting federal funds for the purposes of offering health insurance, but not in the way President Obama intended.

Instead of government-run Medicaid expansion, which was mandated by A.C.A., the governor’s plan offers subsidies for low-income earners to purchase commercial insurance from competitively bid private carriers.

But he does more.

For the first time, Arkansas will try to address what conservative policy experts have called “crowd out,” which has incentivized employers to drop their employer-sponsored plans, saving them money and forcing the employee onto fully subsidized coverage. In Arkansas that has been the Private Option. In other states it has been Medicaid. But by reconnecting work to insurance and building up our employer-sponsored market, the governor is proposing a transformational shift in a post-A.C.A. world. It’s better for employers, employees, and taxpayers.

What can stop all of this from happening? Oddly enough, it could be the people who want it the most.

Many provider groups are complicating the governor’s multi-faceted by opposing him on reform of traditional Medicaid. They’re hoping for all of the benefits of expanded coverage, but none of the reform that the governor said was most important. His red and blue pie chart should have been a warning sign. But they believe conservatives will never take away insurance from 250,000 Arkansans. They’re incredibly wrong. If they’re successful in blocking real reform, there will be real frustration from members who believe we need it. If reform is reasonable, it should be supported.

The Democrats have also begun to speak out, vaguely declaring their votes for Arkansas Works shouldn’t be taken for granted. They’re right about that, kind of. If they have a specific point in the governor’s plan they oppose, they should raise it. They should even propose language to change it. They are legislators, after all. But it’s reckless to summarily declare opposition to an appropriation just because of a general political complaint. That’s the strategy they’ve criticized for three years.

I suspect they’re just tired. Tired of their colleagues being beaten in general elections. Tired of Barack Obama being the leader of their party. Tired of believing a policy is so good but having it cost them so much. Being tired is understandable. But making bad decisions is a luxury not afforded to the responsible. They should cooperate, not obstruct, especially when there’s no room for error and the stakes are so high.

The governor has laid out a sensible plan, both for Arkansas Works and traditional Medicaid reform. The task force has had its say.

Now it’s up to everyone else.