State of the state in health: Questions await answers on Arkansas Works, other issues

Could the Legislature be headed for another big fight over the state’s Medicaid expansion program? How will health care decisions in Washington affect Arkansas? And what’s the future for medical marijuana?

All of those questions await answers this year.

On Monday (Feb. 12), legislators will gather for their even-numbered-year fiscal session, and as usual the big question will be what happens with Arkansas Works.

In 2013, Arkansas was one of the states that chose to expand its Medicaid program under the Affordable Care Act, otherwise known as Obamacare. Instead of expanding traditional Medicaid, however, the state obtained a waiver allowing it to use federal dollars to purchase private health insurance. Originally known as the “private option,” Arkansas became a leader in reducing its number of uninsured residents. Gov. Asa Hutchinson has supported continuing the program under the name “Arkansas Works.”

But it’s faced stiff resistance from some Republicans who see it as an unaffordable expansion of government. It was funded almost entirely by the federal government until 2017, when the state began picking up 5% of the tab. That number grows over time to 10% by 2020.

Twenty-seven senators and 75 representatives must vote for all appropriations. That includes the state Department of Human Services (DHS) appropriation that contains the Medicaid expansion. In past sessions, opponents have tried to kill the program through the appropriation process. In the 2017 regular session, DHS’ appropriation failed twice in the Senate and the House. It finally passed with the minimum 27 votes in the Senate, with seven not voting and Sen. Bryan King, R-Green Forest, voting no. The House passed it 77-13 with 9 not voting and 1 voting present.

In the upcoming fiscal session, only 33 senators will be seated, but all appropriations still will require 27 votes. Sen. Eddie Joe Williams, R-Cabot, who voted for the appropriation last year, resigned to work for the Trump administration. Sen. Greg Standridge, R-Russellville, who was recorded as not voting, died after the session. Sen. Jake Files, R-Fort Smith, resigned after pleading guilty to wire and bank fraud. Special elections to replace them will not occur until after the session ends.

Sen. Jim Hendren, R-Gravette, the Senate’s majority leader, said lawmakers hope to find a compromise. The appropriation as of mid January was a “vote or two” short of passage in the Senate, he said, but he’s optimistic it will pass.

“We’re having some discussions with some of those who I think would like to find a way to be able to not have the drama with regard to the appropriation,” he said.

If necessary, lawmakers could approve everything but the DHS budget and then return for a special session when the Senate is at full strength. Hendren called that “unlikely but a last resort.”

Arkansas Works serves 285,564 Arkansans, down from 344,289 at the beginning of 2017. The lower number is a result of efforts by DHS to reduce duplication and serve only those eligible, and also is a result of the improving economy. Counting traditional recipients, the number of Arkansans receiving Medicaid benefits has fallen by 117,260 in one year. As a result, Hutchinson’s administration is reducing its projected 2019 DHS budget request of $7.993 billion by $477.9 million.

Hutchinson said those numbers should help convince legislators to approve the appropriation.

“With this good news, with bending the cost curve, with rolling off 115,000 people from the Medicaid rolls, this is news that I think will be well received by the Legislature,” he said when announcing the numbers Jan. 4.

Sen. King, perhaps the staunchest Arkansas Works opponent, was not impressed. While the request is smaller than anticipated, DHS’ budget is still growing. Hutchinson’s request will be more than $7.5 billion, compared to $7.36 billion for 2018.

“I’ll tell you what,” King said. “I’m going to project next Christmas I’m going to gain 20 pounds over the holidays, and if I only gain 10, then guess what? I’m going to go tell people I lost 10 pounds.”

Hutchinson has sought to further reduce the number of Arkansans served by the program through a long-expected waiver from the Trump administration. He wants to reduce the income threshold for Arkansas Works eligibility from 138% to 100% of the federal poverty level, which is $12,060 in income for an individual and $24,600 for a family of four. Those individuals no longer eligible for Arkansas Works could obtain coverage through their employer or could purchase it on the insurance exchange, also created by the Affordable Care Act. A federal government subsidy would pay for most of their premiums.

If the waiver is approved, the state would require individuals ages 19-49 to work 20 hours a week or engage in other activities such as job training, taking GED classes or participating in volunteer activities. Many recipients would be exempt, however, including those age 50 or above, the “medically frail,” full-time students, and those with a minor living at home.

The Hutchinson administration expected to receive the waiver by now, and perhaps it is imminent. Instead, on Jan. 11 the Trump administration issued a guidance letter saying generally it would support work requirements.

Among legislators recorded as not voting, Sen. Terry Rice, R-Waldron, said his position on the program has not changed, but he was “open to listen” to proposals. Sen. Ronald Caldwell, R-Wynne, said he had not voted for the appropriation because of his displeasure over a DHS juvenile detention centers contract, but he also had concerns about Medicaid expansion and was not ready to commit. Sen. Alan Clark, R-Lonsdale, said he did not yet know how he would vote.

“If I’m presented a binary choice again, it would be easy to say no,” he said. “If we’re actually trying to go in the right direction, it’s something I would have to look at.”

Sen. Bart Hester, R-Cave Springs, has usually voted against the expansion, though he voted for the appropriation in 2017 and says he will vote yes during the fiscal session. He said the changing math and the potential waiver are being discussed by legislators.

“I don’t think honestly any senators out of 35 are anxious to try to block any appropriations,” he said. “I think what we’re discussing right now is what are the significant concerns that could be addressed before we get into session.”

Hester said the state is now in “management mode” regarding Arkansas Works – taking steps to reduce the rolls without abruptly ending the program. The political environment has changed with President Trump in the White House and Congress voting to end Obamacare’s mandate for individuals to buy health insurance.

“The tide’s in our favor,” he said. “Things are moving the direction the people of Arkansas expect them to move. To just shut down an agency’s budget over something that’s maybe not as far along as you want, but there’s no arguing it’s moving the direction you want, I just don’t think that’s the direction that the Republicans in the Senate are going to go.”

Aside from the waiver request, other decisions at the federal level will affect health care in Arkansas. The repeal of the individual mandate will certainly affect the health insurance market, though how is uncertain. There could be another attempt in Congress to repeal the Affordable Care Act in 2018, though success seems unlikely in an election year.

MEDICAL MARIJUANA, JOB CUTS, FACILITY OPENINGS
On Jan. 4, U.S. Attorney General Jeff Sessions announced that the Justice Department was rescinding its hands-off policies regarding federal marijuana law enforcement in the states. Decisions now will be left to local federal prosecutors.

Cody Hiland, U.S. attorney for Arkansas’ Eastern District, said his office “will continue to exercise our prosecutorial discretion and evaluate criminal cases on an individual basis as it relates to the law and the facts as presented.”

Robert Smith and Blake Lewis, attorneys with Friday, Eldredge & Clark, said the announcement may have a “chilling effect” on banks previously thinking of serving marijuana-based businesses. There are just too many compliance costs and unknowns.

Despite the announcement, the state is progressing toward making the drug available for medical purposes. The Arkansas Medical Marijuana Commission will grant licenses to five cultivators Feb. 27, and then they’ll begin growing the plant. Licenses for 32 distributors are expected around May, said Scott Hardin, Department of Finance and Administration spokesman.

The year began with the University of Arkansas for Medical Sciences announcing Jan. 8 that it is cutting 600 positions, 258 of them filled, to close a budget gap of more than $30 million. UAMS is the state’s largest public employer with more than 10,000 employees. On Jan. 3, the University of Arkansas System Board of Trustees approved the appointment of Dr. Cam Patterson as the new UAMS chancellor.

Arkansas Children’s Northwest prepared to open its 24-bed facility and outpatient clinic in Springdale. On Jan. 6, it announced an $8 million gift from the Willard & Pat Walker Charitable Foundation – the latest of $80 million in donations from more than 8,000 Arkansans.