Funding for private option fails in House


LITTLE ROCK — Legislation to fund the so-called private option for expanding health care coverage in the state failed in the House on Monday.

The vote on House Bill 1219 was 69-28, six votes short of the three-fourths majority needed for approval of the appropriation bill in the House.

The measure was the first item taken up Monday and the last — House Speaker Davy Carter, R-Cabot, immediately adjourned the afternoon session after the vote, which was taken without discussion.

When word of the House action reached the Senate, that chamber abruptly adjourned for the day as well.

The vote came four days after the House voted 62-37 to approve enabling legislation for the private option, which required a simple majority vote to pass.

Carter, who supports the private option, told reporters the bill would come up for another vote on Tuesday. He said he adjourned the Monday session after the vote failed because “that’s got to be resolved. That’s the biggest issue we’ve got.”

“I’m still very hopeful and optimistic we’re going to pass it,” he said. “I wish it was today, but if it’s tomorrow that’s OK too.”

The regular business of the session is scheduled to end Friday, though lawmakers could vote to extend the session. Gov. Mike Beebe, who also supports the private option, told reporters the Legislature should resolve the issue Tuesday.

“I think tomorrow’s it. If they don’t pass it tomorrow, then shut the session down and go home” after passing the budget and key appropriations, he said.

Carter said that “I wouldn’t go as far as that.”

“I’m not going to limit the number of times that we’ll vote on it,” he said. “Hopefully it only takes one more time. But if it takes two or three or four or five or six, I don’t know. We’ll vote as many times as necessary as long as we’re making progress.”

The private option is Arkansas’ unique alternative to expanding the state Medicaid rolls under the federal Affordable Care Act. The proposal would entail using federal Medicaid dollars to pay for low-income workers to buy private health insurance through the state insurance exchange.

The federal government would pay the full of cost of providing coverage to an estimated 250,000 currently uninsured Arkansans for the first three years. The state’s share of the cost would then increase gradually to 10 percent.

The federal government has not issued all the approvals and waivers needed for the private option but has approved it in concept. The legislation contains language that would prevent the entire plan from taking effect if any part of it is not approved by the federal government.

Under the Affordable Care Act, a business with 50 or more employees would have to offer employees affordable health insurance plans or pay a penalty of $2,000 per employee per year, with the first 30 employees exempt. Beebe said Monday that small Arkansas businesses could avoid an estimated $35 million in penalties, which he called essentially a tax on businesses, by adopting the private option. He called a vote against the private option a vote to raise taxes on small businesses.

“We cannot afford a tax increase on Arkansas businesses. People who vote for a tax increase on Arkansans businesses, they’ll be remembered,” he said.

Carter noted that the private option also would shrink the state Medicaid rolls, whereas the rolls would continue to grow if the state does nothing.

“If … members continue to hit the red ‘no’ button, then I think there’s going to be pretty somber attitudes around the state of Arkansas in a year or a year and half when all the negative effects of their actions hit,” he said.

House Majority Leader Bruce Westerman, R-Hot Springs, who voted against the bill, said there is “conflicting data on whether those taxes can be avoided by passing the private option.”

Westerman said he was frustrated that no other bills were considered Monday.

‘That’s just telling members who have bills on the calender that they’re not worth taking care of,” he said.

Among the bills waiting to be considered are several proposed tax cuts. Beebe and some legislators have tied the proposals to health care expansion, saying the savings the state would see under the private option — an estimated $670 million over the next decade — would allow the state to afford the tax cuts without cutting essential services.

“I can’t support tax cuts without paying for them, and there’s no way to pay for them without the private option,” Beebe said Monday.

Westerman told reporters, “I still maintain that the tax cuts are independent of Medicaid.”

Westerman is the sponsor of a rival health care expansion bill, HB 1965, which would move all but the aged, blind and disabled off of Medicaid and onto health savings accounts that would not have to be spent entirely on health care. He said he believes the Legislature has moved too quickly on health care expansion.

“I would like to slow down and vet the bill that I have out there, find out what the real numbers are on it, and then see if it’s worthy of passing and funding,” he said.

Beebe said again Monday he is not interested in calling a special session later in the year, as Westerman has proposed.

“I keep saying no special session,” he said. “Some people don’t want to believe me. They’re going to start to believe me.”

The 28 “no” votes that HB 1219 received came from a little over half of the 51 Republican House members, showing how divided the GOP caucus is on the issue. Rep. Kim Hammer, R-Benton, one of those who voted no, and Rep. Ann Clemmer R-Benton, who did not vote, said they planned to hold a town hall meeting together in Benton on Monday night and hear from both supporters and opponents of the private option.

Asked if the meeting might change his position, Hammer said, “Everything contributes to the overall decision.”

Rep. Randy Alexander, R-Fayetteville, voted against the bill but told reporters later that “I think the private option is the best of the two options.”

Alexander said he met with constituents at two town hall meetings on Saturday, and when he polled them on their positions at the end of the meetings, “it was 50-50.”

So why not break the tie in favor of what he believed was the best option?

“I had a day to go back and talk to people. That’s not adequate. … I think we’re moving too fast,” he said.

Carter said legislators should do what they believe is best for Arkansans. If a legislator does otherwise, he said, “then inherently you’re moving forward with something that’s not in the best interest of the state.”

The House is scheduled to convene at 9 a.m. Tuesday. Whether the session will end this week is uncertain.

“The longer we go without getting this resolved, the less likely it is for that to happen,” Carter said.

Senate President Pro Tem Michael Lamoureux, R-Russellville, who supports the private option, said the failure of the appropriation to pass in the House has “put everything on hold and there’s not much of a chance of wrapping up by Friday at this point.”