LITTLE ROCK — Arkansans may have seen a sneak preview of one of the biggest fights of the next legislative session when Gov. Mike Beebe said last week he is inclined to pursue the optional expansion of Medicaid under the federal Affordable Care Act and Republican legislators voiced opposition.
The U.S. Supreme Court ruled June 28 that the federal government cannot coerce states into expanding Medicaid coverage to 138 percent of the federal poverty level by threatening to deny all Medicaid funding to states that do not comply. Though he has expressed reservations about the cost of the expansion in the past, Beebe said last week he was inclined to pursue it, an announcement that drew criticism from GOP lawmakers.
Beebe said he will make a decision before January, but he acknowledged that lawmakers could pass legislation to block his decision during the legislative session that starts in January. Some GOP lawmakers signaled they may try to do just that if Republicans win control of the Legislature in the November elections.
Beebe offered several arguments against saying no to the expansion: It would mean turning down federal funding that would cover most of the cost; Arkansans’ federal taxes will support Medicaid expansions in other states regardless; hundreds of thousands of working poor Arkansans would lose a chance for health care coverage; and Arkansas hospitals would have to continue providing uncompensated care to those uninsured people.
Republican legislators pointed out that the state Medicaid program faces a projected deficit next July of up to $400 million, according to the Department of Human Services. The state is working on new payment methods expected to lower costs, but the reforms — which some Republican lawmakers oppose — are not expected to prevent next year’s shortfall.
“If we can’t pay for the 800,000 people currently on Medicaid, why would we add more?” Sen. Michael Lamoureux, R-Russellville, said in a tweet last week.
On Thursday, the nonpartisan Urban Institute Health Policy Center issued a report entitled “Opting Out of the Medicaid Expansion under the ACA: How Many Uninsured Adults Would Not Be Eligible for Medicaid?” According to the report, an estimated 15.1 million uninsured adults would become eligible under the law unless their states decide to opt out.
The Urban Institute also noted that the Affordable Care Act provides federal tax credits and other subsidies to help people buy insurance if they are between 100 and 400 percent of the poverty line, but people with incomes below 100 percent of the poverty line are not provided subsidies because the law anticipated that those people would become eligible for Medicaid.
The institute estimated that 11.5 million Americans fall into this category. If their states opt out of the Medicaid expansion, they could not receive Medicaid or subsidies even though some people earning more — those between 100 and 138 percent of the poverty line — would be eligible for subsidies.
In Arkansas, the Urban Institute estimated that 218,000 uninsured adults would qualify for Medicaid under the expansion and that 167,000 uninsured adults would be unable to receive Medicaid or subsidies if the state opts out of the expansion.
The Washington Post’s Wonkblog pointed out Thursday that opting out of the expansion would be “a big deal” in Arkansans because the state currently makes Medicaid available only to families earning up to 17 percent of the federal poverty line — the lowest eligibility cutoff in the nation.
In contrast, families of three with incomes at 100 percent of the poverty level are eligible for Medicaid in 17 states and the District of Columbia.
State DHS Director John Selig said that means Arkansas has more to gain from the expansion than most states.
“Because our numbers have been so low — our eligibility level — the gap that we’re closing is much bigger, so there would be a disproportionate amount of the new federal money coming to Arkansas,” he said.
The federal government would pay 100 percent of the cost of the expansion for the first three years. After that, the state’s share would increase each year until 2020, when it would max out at 10 percent. The 30 percent share that the state pays for people already on Medicaid would not change under the law.
Beebe has said that expanding Medicaid could add $200 million a year to the state’s Medicaid budget when the state’s contribution reaches 10 percent. Selig said DHS’ latest estimates put that number at closer to $100 million — with a federal match of $900 million that the state would be turning down if it says no to the expansion.
Beebe appeared last week to lay the groundwork for an argument that expanding Medicaid is the right thing to do. He said it would take a strong argument to persuade him “to turn my back on 200,000 to 250,000 Arkansans who don’t currently have health care coverage.”
Republicans, meanwhile, are gearing up to make the case that the state simply cannot afford it.
“We’ve got the issue of covering the increased Medicaid expenses that are already out there,” said Rep. Bruce Westerman, R-Hot Springs, the Republican House Caucus leader. “Adding on millions of dollars more in the future I don’t think is something that me or my colleagues would support.”
• • •
On the Net: