State Senate passes Medicaid budget as judge strikes work requirement for Arkansas Works

The Arkansas Senate on Wednesday (March 27) approved an appropriations bill for the state’s Medicaid expansion program and other state Department of Human Services priorities only moments before a federal judge in Washington, D.C., struck down a work requirement for low-income participants adopted by lawmakers in the 2017 session.

In light of the ruling late Wednesday afternoon by U.S. District Judge James Boasberg that the U.S. Department of Health and Human Services acted arbitrarily in approving plans put forward by Kentucky and Arkansas, Gov. Asa Hutchinson issued the following statement: “I am disappointed in the decision handed down late this afternoon. I have not yet had the opportunity to review the opinion in its entirety, but I plan to do so this evening and provide further comment tomorrow morning on the future of the Arkansas Works work requirement.”

On the Senate floor, meanwhile, lawmakers adopted Senate Bill 99 by a vote of 27-4 following fierce debate where Senate President Jim Hendren, R-Sulphur Springs, came to the floor and defended the process of approving the budget for the Arkansas Works program as the 2019 session winds down. A three-fourths vote is need for all state agency budget bills.

Sens. Bob Ballinger of Berryville and Trent Garner of Camden, both Republicans, argued for holding up SB 99 until the federal ruling came through. Ballinger said while he didn’t want to fight over the DHS budget, he wanted to make sure an adverse federal ruling wouldn’t require the legislature to come back and make fixes later to the budget.

“I don’t think anyone wants a big fight over the DHS budget,” said Ballinger who spoke against moving the appropriations for the state’s largest agency out of Joint Budget Committee on Monday. “I think the fact that we know things may change, especially with the work requirement, is the reason why we are pushing this out now. And I get it, I don’t want to have to fight over it and I am not going to like it if we are not going to have to continue the work requirement.”

Hendren came to the Senate podium to defend SB 99. He said debating budget bills on the Senate floor after they moved out of Joint Budget Committee was not good policy.

“This is not something that has been rushed through. We are going to be done in about ten or eleven more days with the session. If there was a time to begin passing the major appropriations bills, it is now,” said Hendren.

Two weeks ago, Boasberg heard arguments from litigants in Arkansas and Kentucky where low-income Medicaid participants were required to either have a job or meet “community engagement” requirements to receive health insurance. (Link here for the story on Boasberg’s ruling.)

In the 2015 and 2017 legislative sessions, Gov. Hutchinson transformed the “private option” Medicaid expansion program started under Democratic Gov. Mike Beebe and GOP state lawmakers into Arkansas Works. The work requirement, which received a federal waiver late last year, led to conservative buy-in to continue the program in the 2017 session.

Unlike some states that have seen skyrocketing annual premium hikes, Arkansas’ health insurance markets have remained relatively stable and shown single-digit increases year-over-year thanks to the Medicaid expansion component of the Affordable Care Act, which planted several private insurance carriers in the marketplace.

In the Joint Budget meeting debate on Tuesday, Kelley Linck, chief legislative and intergovernmental affairs officer for the state Department of Human Services, told the legislative panel the state budget has set aside enough funds to cover the more than 18,000 people who have lost their health coverage for failing to comply with the requirements or failing to officially report their compliance. He said about 2,000 have since reapplied for coverage.

On the Senate floor, Sen. Larry Teague, D-Nashville, co-chairman of the state Joint Budget Committee, warned legislators that SB 99 also includes appropriations for other DHS programs, including the low-cost health coverage for eligible children in Arkansas, known as CHIPs, and funds set aside for nursing home and long-term care. Addressing concerns that the DHS budget will not have enough funds to cover those 18,000 Arkansans that lost coverage, Teague said the agency’s budget would sufficiently cover those low-income participants the state may be forced to provide coverage for pending the federal ruling.

“They budget as if everyone who is eligible will be on the program,” Teague said of the DHS budget. “So they have plenty of appropriations and plenty of money, according to them, to deal with whatever happens.”

Before the session, Hutchinson outlined his $5.75 billion budget for the 92nd General Assembly for the upcoming fiscal year 2020 that begins on July 1, 2019. That balanced budget request, which must be approved by the legislature, is 2.3%, or $125 million, above the fiscal 2019 budget of $5.6 billion, which ends June 30, 2019.