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Arkansas legislator urges Utah not to copy private option


LITTLE ROCK — An Arkansas state senator is urging Utah not to copy Arkansas’ so-called private option.

In an op-ed published Tuesday by the Deseret News, a Utah newspaper owned by the Mormon Church, Arkansas state Sen. Bryan King, R-Green Forest, wrote that Arkansas’ private option has been “an unmitigated disaster.”

“I urge my legislative colleagues in Utah to avoid repeating Arkansas’ mistakes,” King wrote in the column.

An Arkansas legislator who helped create the program said Tuesday that King’s claims were “patently false.”

The private option is Arkansas’ alternative to expanding state Medicaid rolls that uses federal Medicaid money to subsidize private health insurance for people earning up to 138 percent of the federal poverty level. The federal government is to pay 100 percent of the cost for the first three years, after which Arkansas’ share of the cost will increase gradually until reaching 10 percent in 2020.

Utah Gov. Gary Herbert has proposed using federal Medicaid money on private insurance much as Arkansas has done. King argued in his op-ed that doing so would be a mistake.

“Arkansas made a grave mistake in trusting the Obama administration’s false promise of flexibility, and as a result many folks in our state are experiencing buyer’s remorse,” King wrote.

The federal Medicaid waiver that allowed Arkansas to implement the private option includes a “budget neutrality cap” that the state must stay within or be responsible for any overage at the end of three years. State Department of Human Services officials said last month that expenditures averaged $496 per member per month, exceeding the first-year target of $477.63 per member per month.

“We hear about how Medicaid expansion is practically ‘free’ for states, but exceeding the budget neutrality agreement means Arkansas taxpayers could be on the hook for 100 percent of cost overruns,” King stated in his op-ed.

“The charges than Sen. King makes are patently false,” state Sen. David Sanders, R-Little Rock, one of the main architects of the private option, said Tuesday.

“I think the only thing Sen. King is remorseful of is the fact that we’ve been able to get it through the legislative process twice,” he said.

Sanders said the main reason the cap was exceeded is that the average age of enrollees has been 39, whereas the cap was based on a projected average age of 37. The Medicaid waiver allows the cap to be adjusted for demographic realities that differ from projections, he said.

Other issues that have contributed to the higher-than-anticipated expenditures will be addressed in various ways, including no longer allowing plans to include dental and vision coverage, developing a lower-cost alternative to non-emergency transportation benefits and creating health savings accounts, Sanders said.

Meanwhile, Sanders said, the program has reduced uncompensated care costs, helping Arkansas hospitals stay open while many other states are seeing hospitals shut their doors or are raising taxes to keep them open.

“For a member of the Arkansas Legislature to go out of state and cast aspersions back at a program that that particular legislator has never supported from the get-go and then to say that it is not working, I think it’s a bad tactic,” he said.

King said Tuesday that he wrote the op-ed after a think tank contacted him and that he stands by his comments.

“Look at John Cooper’s race. That was a definite signal of how people felt about the Medicaid expansion,” King said.

Cooper, an opponent of the private option, defeated Democrat Steve Rockwell, who supported the program, in a January special election in Jonesboro for a vacant state Senate seat.

King said his “disaster” comment was in reference to costs being higher than projected.

“They go out and promise how much and estimate how much it’s going to cost. Then make it cost that,” he said.

So far, more than 155,000 people have applied and been found eligible for the private option, out of an estimated 225,000 Arkansans who qualify, according to DHS.