Arkansas Gov. Asa Hutchinson’s attempt at rebranding his state’s Medicaid expansion under the 2010 federal health law paid off last week.
Hutchinson, a Republican, promoted his Arkansas Works plan as a fiscally responsible replacement for the Private Option health insurance program expiring at the end of this year. Eligibility limits, benefit restrictions and funding for both programs come from Obamacare.
Because Republicans who fought to end the Private Option were hesitant to support Arkansas Works, allies of the governor included an appropriation for Arkansas Works in a larger budget bill and threatened to shut down the state’s entire Medicaid program if it was not approved.
When Republicans continued to balk, an amendment blocking Arkansas Works funding was added to the appropriations bill. Then, in a predetermined legislative sleight of hand, once the amended bill was passed Hutchinson line-item vetoed the amendment.
Republicans outnumber Democrats 24-11 in the Arkansas Senate and 64-35 in the Arkansas House. Only two Senate Republicans and 13 House Republicans voted against the funding bill; five Republicans in the Senate and 10 Republicans in the House voted “present.”
David Ray, state director for activist group Americans for Prosperity Arkansas, believes the rebranded Obamacare expansion was approved largely because the promise of billions in federal spending was too enticing for Arkansas General Assembly members.
Ray told Watchdog.org that some of the Republicans who oppose the Private Option are willing to support Hutchinson’s plan simply because Hutchinson is a Republican.
Hutchinson, Ray said, “has fully embraced the Medicaid expansion,” and the governor’s legacy will be colored by what happens with Arkansas Works. The Private Option was put in place by Democrat Gov. Mike Beebe — who Hutchinson succeeded — and ended by Republicans.
“Some legislators who were opposed to the program when Arkansas had a Democrat governor were happy to go along with it now that is was being pushed by someone with the same letter next to their name,” Ray said. “That’s the most disappointing part.”
Like several of Hutchinson’s Arkansas Works talking points, his line-item veto tactic and threat to blow up the Arkansas Medicaid program were borrowed from Ohio Gov. John Kasich, who vetoed a legislative ban on Medicaid expansion and expanded the program unilaterally in 2013.
Earlier in the month, Hutchinson signed into law a bill creating Arkansas Works. The bill calls for the Arkansas Department of Human Services to administer the new welfare program and submit any necessary waiver or state plan amendment requests to the federal government.
Hutchinson has hailed his success in negotiating for flexibility from President Barack Obama’s administration — but Arkansas no longer has any leverage now that the Obamacare expansion program has been enacted and funding has been appropriated.
J.R. Davis, the governor’s communications director, said in an email to Watchdog.org that the governor expects approval of any requested waivers by July and is not concerned that they may be rejected.
“We are confident we will receive approval for the requested waiver,” Davis said.
The law creating Arkansas Works makes no mention of asking the Centers for Medicare and Medicaid Services to approve work requirements. Failing to pay premiums under Hutchinson’s plan would result only in a loss of as-yet undetermined incentive benefits beyond what Medicaid requires.
CMS officials have refused previous state requests to impose work requirements or increase cost-sharing above Medicaid’s usual meager limits.
While Arkansas Works aims to subsidize employer-sponsored insurance where possible, the program will function largely the same as the Private Option, providing private health coverage to childless, working-age, able-bodied Arkansans at taxpayer expense.
AFP Arkansas opposed the Private Option, and Ray is not optimistic about its replacement. Hutchinson agreed to sunset the Private Option at the end of this year because the program has been plagued by enormous cost overruns.
“Arkansas Works is essentially version 2.0 of the Private Option. There’s not any substantive difference because Washington holds all the cards,” Ray said. “It’s a rebrand with some cosmetic changes.”
In the event of a cut to federal Obamacare expansion funding — currently 100 percent, tapering down to 90 percent by 2020 — Arkansas will ask the feds to end the program. Congressional Republicans and the president himself have acknowledged the federal funding is unsustainable.