Arkansas Governor: U.S. Government Will Help With Private Insurance

By and Michael Stratford | April 5, 2013

Federal officials have offered “conceptual support” for Arkansas’ plan to use Medicaid dollars to buy private health insurance for low-income residents, Democratic Gov. Mike Beebe announced as he urged the Republican-led Legislature to move forward with the proposal.

In a letter dated April 1 that Beebe’s office released, U.S. Health and Human Services Secretary Kathleen Sebelius told Beebe the Obama administration was interested in the proposal lawmakers are considering as an alternative to expanding Medicaid’s enrollment under the federal health care law.

“The concept in the memo appears to be generally consistent with the requirements of the Medicaid statute,” Sebelius wrote, referring to a letter state officials said last month outlining the proposal. “We look forward to reviewing your demonstration proposal.”

The letter stopped short of giving final approval to the proposal, but Beebe said it was the written confirmation lawmakers have been waiting for since Beebe announced in February federal officials agreed to the so-called private option approach.

“Now it’s time for action in Arkansas,” he said in a statement released by his office.

Under the proposal, low-income citizens – those who make up to 138 percent of the poverty line, which amounts to $15,415 per year – would receive private insurance purchased using federal Medicaid dollars. The insurance would be purchased through the exchange created under the federal health care law.

“We sent them in March the outline of the proposal that everybody had been talking about,” Beebe told reporters. “She references that and says that’s consistent with what they want to agree to. You can’t get better than that.”

The proposal is gaining favor among Republicans, who won control of the Legislature in November based partly on their opposition to the federal health care law. The Republican leaders of the House and Senate have said they backed the private option proposal. The proposal has also been backed by the Arkansas Chamber of Commerce, the state’s largest business lobbying group.

Senate President Michael Lamoureux said he believed the letter from Sebelius may help in making the case for the proposal.

“I thought it was more encouragement that we’re headed in the right direction and they’re looking favorably on what we’re trying to do here in Arkansas,” said Lamoureux, R-Russellville.

But the Republican chairman of the House Public Health Committee said he wasn’t encouraged by the lack of a definitive authorization from the federal government in Sebelius’ letter.

“If they want us to make a decision in an expeditious time frame, I would say their actions are not consistent with what they are asking us to do,” said Rep. John Burris, R-Harrison. “It’s nice that they finally put down in writing a general recollection of what they discussed five weeks ago, but it doesn’t really do much to move the ball down the field.”

The proposal also faced new opposition Tuesday from Republican U.S. Rep. Rick Crawford, who urged legislators to reject the private option approach and instead call on Congress to delay the implementation of the federal health law. Crawford represents east Arkansas’ 1st District.

“In my view, the current unwinnable situation in which state legislators find themselves will become significantly worse if they set up a government-funded private insurance program and are forced to pull it back in a few years after the entire provider system has plugged into it,” Crawford said in a statement issued by his office.

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