Analysis: Uncertainty Helps Keep Arkansas Medicaid Expansion Alive

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One of the biggest accomplishments of the Arkansas legislative session that’s wrapping up is what didn’t happen. For the first time since the program was created four years ago, there was little to no drama over the future of the state’s hybrid Medicaid expansion.

With limited vocal opposition, lawmakers last week quietly reauthorized a budget bill for Medicaid and the expanded coverage. For a program that’s sparked feuds within the Republican Party and had to be saved through a byzantine maneuver last year, it was a downright anticlimactic ending.

Though it took three votes in the Senate and two in the House to approve financing, the program’s future didn’t appear to be in doubt.

“I think the fight about the continuation or the existence of it is something that’s really in the rear view mirror now,” Sen. Jim Hendren, the majority leader in the Republican-dominated Senate, said last week.

Crafted as an alternative to expanding Medicaid under the federal health law, the program has sharply divided Republicans as some conservatives have cast it as an embrace of the law they’ve derided as “Obamacare.”

The program, which uses Medicaid funds to purchase private insurance for low-income residents, has more than 300,000 participants. Arkansas expects to pay $109 million of the $1.8 billion total cost in the coming year.

Legislative leaders say the unresolved fight over the nation’s health care law that spawned the expansion program may have helped avert another prolonged fight over the Arkansas program’s future.

The program’s budget was approved less than a week after a Republican-led effort to repeal and replace the federal health law collapsed in Congress. Congressional Republican leaders have acknowledged the federal law will remain in place for the foreseeable future.

“You can’t take action when you don’t know even the game we’re going to be playing in regards to Medicaid,” Senate President Jonathan Dismang said. “You’ve got to have some direction at the federal level.”

The program’s reauthorization was also probably eased by the new limits potentially coming to the program. Gov. Asa Hutchinson said in March he’ll seek federal approval to move about 60,000 people off the program and on to the insurance marketplace, and to impose work requirements on some participants.

The other changes Hutchinson says he’ll seek include expanding a provision approved last year aimed at moving participants to employer-sponsored insurance, with Medicaid expansion funds paying for premium costs.

Hutchinson is expected to convene a special session next month related to the new limits. The looming special session prompted one long-time critic of the Medicaid expansion to question why the budget couldn’t be considered alongside the proposed changes.

“You don’t need to give people a credit card to spend whatever they want to without knowing the details first,” Republican Sen. Bryan King said.

The session, however, may still open a new debate over the future of the program, with some advocacy groups expressing concerns about the limits Hutchinson is seeking. Some Republicans, meanwhile, are looking for reassurances that the changes will help curb the costs of the expansion and the Medicaid program in general.

“I know we’ve got obligations, but we’ve got to do something because we cannot sustain this budget,” Republican Rep. Lane Jean, who co-chairs the Joint Budget Committee, told House members before the vote last week.