Gov. Asa Hutchinson: ‘Don’t panic’ on U.S. Senate healthcare bill

Fresh off an overseas trade trip, Gov. Asa Hutchinson made his first public appearance in Arkansas since returning and told the media there is much work to be done before changing the nation’s federal healthcare law.

Republicans in Congress have passed a House version of a healthcare measure that aims to “repeal and replace” the Affordable Care Act, or Obamacare.

The U.S. Senate rolled out a version of its measure last week, which has stirred national debate on what the bill does and how quickly it might be implemented. Some of that debate is among Senate Republicans, with enough saying they have problems with the bill to jeopardize its passage in its original form.

A key difference between the House and Senate bills is the rule on Medicaid funding changes for states. The Senate version would phase out expansion funding – in Arkansas the program is known as “Arkansas Works” – over three years beginning in 2021, and would maintain and enhanced match for those already on the program. The House version would immediately prohibit a state from expanding Medicaid and would freeze enrollment and cut all expansion funding in 2020.

Politico is reporting that budget analysts predict the Senate bill will remove between 15 million and 22 million from insured healthcare coverage. A Senate vote on the bill could happen as early as Tuesday (June 27).

Gov. Hutchinson offered the following initial comments to members of the press in a short Q&A at the Little Rock Embassy Suites. The following is an unedited transcript of Gov. Hutchinson’s remarks.

GOVERNOR’S INITIAL REVIEW, CONVERSATION WITH SEN. COTTON
First, I have started reviewing the bill. I’ve spent a significant amount of time on it as well as some of the reports related to it. One thing we’re still waiting on – at least I haven’t seen – are the CBO (Congressional Budget Office) numbers that are expected to come out today. That’s an important ingredient for a more careful state-by-state analysis of it. 

It [the Senate bill] in a number of areas is an improvement of what came out of the House, and that’s what we’re looking for is an improvement. The flexibility to the states, they also adjusted the income caps on the exchange and that’s an improvement. So we want to continue to look at it; it’s not perfect, but it is a step in the right direction in terms of some of the changes they’ve made.

In my conversation with Sen. Cotton – and I have a call in to Sen. Boozman as well – they’re continuing to look at this, as I am. I shared some concerns from an Arkansas standpoint on it, but I also recognize that the status quo is not taking us in the right direction either and that there has to be changes. As I shared, the fundamental challenge is that if you give people choices, some of them are going to make bad choices. That’s what freedom is and that’s really a fundamental difference between Obamacare, that limited choices, and the House and Senate bill that increases choices. But that’s part of freedom and some people are going to make bad choices based upon that. That means that you’re going to have some people without coverage. 

CONCERNS IN SENATE BILL
It is Medicaid funding, and even though the transition time is way off in the future, there is a shift and a reduction long-term in federal commitment to the expanded Medicaid coverage. You know, that’s a really tough call in terms of the direction of America, not just Arkansas. Because again, whenever you limit the expansion population – either through costs and reimbursement rates or through other means – that is going to result in a reduced number of people covered by the expanded population. 

The key thing is will they move successfully onto the exchange. As I was sharing with our federal delegation, we’re working very hard to have a smooth transition onto the exchange, they’ll get the tax credits, the subsidies that are important for them. But this is something I’d like to see us work through next year in reducing them from 138% to 100% (of the federal poverty level) transitioning – and that’s almost a test as to whether we can successfully move those from the expansion population onto the exchange.

I think we’re going to learn from experience. There’s a lot more work that needs to be done on the Senate bill and I’m delighted that Sen. Cotton is looking toward working for those improvements that will protect Arkansas.

BIGGEST IMPROVEMENT IN SENATE BILL OVER HOUSE VERSION
The biggest improvement is on the tax credit and the changes so that you’re not simply giving the higher income individuals the highest percentage of credits and that it’s balanced and it’s more fair. I think they’ve addressed a significant problem from the House version as a result of that. They have given us flexibility and they’ve upped the dollar amounts in terms of some of the innovation funds.

I’m a little bit worried that they’ve really tried to protect the non-expansion states. And they’re putting a lot of money into the non-expansion states. This is all about votes there and that worries me that there’s more money flowing into the non-expansion states in terms of additional health care dollars and we want to look at that further.

ON COST SHIFTS TO THE STATES IN SENATE GOP BILL
That’s the ingredient we need to study more. There is a reduction down the road – what five years down the road – from the expanded percentage for the expanded population, the higher rate of coverage.

There is a reduction in that. But there’s also supplemental money that goes to the states for high-risk pools, for innovation. And we need to measure closely as to how that’s going to meet the needs and offset what could be a cost shift in the expanded population on the Medicaid side. Even though there’s clearly a reduction in federal participation in the expanded Medicaid, if they’re providing additional resources for innovation, then you’ve got to really see how that fits together.

I think really the message the public is: don’t panic. There’s a lot of work that needs to be done. And right now, typically in our country, we’re having hundreds of millions of dollars being spent on media advertisement (saying) ‘this is a bad bill, this is good bill.’ I think we have to really study it and recognize that there’s a lot of work that needs to be done before there’s going to be any change. I think that’s one of the reasons the Senate is looking at a very long transition time, so if there are unintended consequences, there’s corrections that can be made.