Officials pitch Medicaid expansion to lawmakers


LITTLE ROCK — State officials made a direct pitch to legislators Wednesday for adding thousands of poor Arkansans to the state’s Medicaid rolls under the federal health care act.

Skeptical Republicans pointed to the burgeoning federal debt and questioned whether expanding Medicaid would address root problems with the health care system.

Medicaid Director Andy Allison, Surgeon General Joe Thompson and Insurance Commissioner Jay Bradford testified Wednesday morning before the Hospital and Medicaid Study Subcommittee of the Legislative Council.

All three said the state would have much to gain by expanding Medicaid to include people earning up to 138 percent of the federal poverty level, as the federal Affordable Health Care Act proposes. Between 200,000 and 250,000 more people would be covered by the federal-state health care program for the poor, the elderly and the disabled under the expansion, they said.

The federal poverty level for a family of four is $23,050. Under the expansion, a family of four earning up to $31,809 would be eligible for Medicaid.

The U.S. Supreme Court recently upheld the health care reform law but said its Medicaid expansion provision must be optional for the states. Allison told the panel that expansion would provide health care coverage to a large portion of Arkansans who cannot now afford health insurance, with most of the cost paid by the federal government.

The state Department of Human Services has estimated that with the influx of federal dollars the state would see a net savings of $372 million over the first seven years of the expansion, when benefits such as state income taxes collected on the federal money and reduced uncompensated care are factored in.

“It would be very difficult to turn down that kind of money to accomplish that much good,” Allison said.

Thompson said Arkansas is one of the poorest states in the nation and has one of the highest uninsured rates, which means it is one of the states with the most to gain from the expansion.

“The Affordable Care Act does a fundamental redistribution of federal dollars from states that have a low uninsured rate, like Massachusetts at 7 percent, to states that have a high uninsured rate, like Arkansas at 25 percent,” he said.

The Affordable Care Act provides subsidies to help people between 100 percent and 400 percent of the poverty level buy health insurance, but it provides no subsidies for people below 100 percent of the poverty level. Medicaid in Arkansas is currently available only to people up to 17 percent of the poverty level, so people between 17 percent and 100 percent of the level would not have access to health insurance without the expansion, Bradford said.

“Their health is going to continue to be bad, and they’re going to be a burden to the system. And then when you pay your insurance premium on your insurance, the cost is on you,” he said.

But Republican legislators expressed reservations about the expansion, which Democratic Gov. Mike Beebe has said he is inclined to support.

“We have to be careful about accepting federal dollars with the thinking in mind that the federal government is so far in debt,” said Rep. David Meeks, R-Conway. “Eventually, China is going to stop loaning us money and we’re not going to have the money from the federal government to fund some of our programs.”

Dan Rahn, Chancellor of the University of Arkansas for Medical Sciences, and Bo Ryall, president and CEO of the Arkansas Hospital Association, testified that expanding Medicaid would greatly reduce uncompensated care at hospitals. In 2010, uncompensated care costs to Arkansas hospitals were estimated at $338 million.

Ryall also said health care costs should go down if patients receive routine care rather than seeking care only in emergencies.

“They will be receiving care along the way, which would be cheaper, rather than waiting till they are at their sickest point and then showing up at the emergency room,” he said.

Rep. John Burris, R-Harrison, questioned whether expanding Medicaid would be enough in itself to change people’s behavior.

“I know people that go to the ER,” Burris said. “Some of them are my cousins. And they don’t go because they don’t have access (to routine care). They go because they’re lazy.”

Also during the hearing, Bradford told the panel the state has applied for an $18 million federal grant to continue preparing to implement an insurance exchange, another part of the federal health care law. Most of the money will go to educate Arkansans about the exchange and get them enrolled, he said.

The state previously has received $8.7 million in federal grant money to prepare for the exchange, which Bradford said the state hopes to run in conjunction with the federal government.