Former Utah governor praises private option

LITTLE ROCK — A former Republican governor of Utah praised Arkansas’ so-called private option in testimony Thursday before an Arkansas legislative committee, several Republican members of which expressed skepticism about the program.

The House and Senate committees on public health, welfare and labor heard testimony from Michael Leavitt, who was Utah’s governor from 1993 to 2003 and served as administrator of the Environmental Protection Agency and later as secretary of health and human services under President George W. Bush.

Leavitt owns a consulting firm that is assisting the state Department of Human Services in preparing a proposed amendment to the federal waiver that cleared the way for the private option, the state’s program that uses federal Medicaid money to provide private insurance to low-income Arkansans. The state is seeking to modify the waiver to allow the introduction of co-payments and personally managed health savings accounts, among other things.

Leavitt told the legislative panel he opposes the federal Affordable Care Act but believes that Arkansas’ private option — the state’s alternative to that law’s proposal that states extend health coverage to the working poor by expanding their state Medicaid rolls — is a valuable step toward reforming the traditional Medicaid program.

“This is a very important moment, I think, not just for Arkansas but for other states, because what happened is that through whatever circumstances that you’ve been able to get it done, you got the federal government to agree to a series of reforms that they have up to this point not been willing to do,” he said.

If the private option is a success, others will want to copy it, and the federal government will grant more flexibility to states, Leavitt said.

“That’s the way reform happens in this state-federal system. A state gets it done, others begin to follow, and it begins to change,” he said.

Though its chief architects were Republican legislators, the private option has divided GOP lawmakers, with some saying they will push to defund it in the fiscal session that begins Feb. 10.

“How in good conscience can you say the states have (power) when we’re being told what to do by the federal government and now we’re telling private insurance how to run their business?” Rep. Justin Harris, R-West Fork, asked Leavitt.

“As I understand, in Arkansas through the private option, it’s the private carriers who are now (setting insurance rates),” Leavitt said. “That sounds like a lot less government regulation to me than it is in other states where the Medicaid director and assistants set the rates.”

Rep. David Meeks, R-Conway, said he was concerned about whether the private option would be sustainable.

“You never want to enter in or start a program or reform a program and then not have the money to be able to continue to program,” he said.

Leavitt responded, “It’s my view that Medicaid is not sustainable by the country in its current form, and the important thing that you are adding to this is that here is a lot more chance it’s going to be sustainable, in whatever form, with the private option than it is in its original form.”

DHS officials expect 250,000 Arkansans to participate in the private option, which is available to people earning up to 138 percent of the federal poverty level. State Medicaid Director Andy Allison told the panel Thursday that as of Saturday 87,547 people had applied and been found eligible for coverage, most of them under the private option and a small number under traditional Medicaid.

Allison told the panel that more than half of the people who signed up during the first enrollment period are under 40 and that medically frail people are being enrolled in traditional Medicaid, which he said should have “a profound positive impact” on the risk profile of the group enrolled in the private option.