LITTLE ROCK — Gov. Mike Beebe said Wednesday he is leaning more heavily toward expanding the state Medicaid program in light of projections that increased federal spending would mostly negate the state’s expenses, but he noted that the expansion would have to clear a high legislative hurdle.
Republican lawmakers indicated Wednesday they are not inclined to support the expansion despite the projections.
According to estimates released Tuesday by the state Department of Human Services, increased federal spending on Medicaid, state income taxes collected on that money and reductions in uncompensated care would save the state $372 million between fiscal year 2014 and fiscal year 2021 if the state expands Medicaid eligibility to 138 percent of the federal poverty line under the federal Affordable Care Act.
DHS estimated that the expansion would add 250,000 people to the state Medicaid rolls and would cost Arkansas $155 million a year starting in 2021, when the state begins paying 10 percent of the cost. After savings, the cost to the state would be $4 million a year, the agency said.
Beebe said previously he is inclined to support the expansion. On Wednesday, he said DHS’ projections strengthen that inclination, though he is still waiting for assurances from the federal government that the state will have some flexibility.
Beebe also said the expansion cannot happen without legislative support.
"The reason the Legislature is still going to have to do this is, this is going to have to be appropriated — and it takes a three-fourths vote to appropriate it," he said.
Beebe said he encourages legislators to study DHS’ numbers and decide for themselves two things — whether the expansion is economically feasible and whether extending health care coverage to more Arkansans is the right thing to do for humanitarian reasons.
"I think more than three-fourths of that General Assembly will do what they honestly think is right for the people of Arkansas, and if the facts support both economic and humanitarian reasons for accepting this, I think more than three-fourths will, ultimately," he said.
The governor acknowledged that there is "a huge partisan divide" over the Affordable Care Act but said legislators need to consider what is best for Arkansas, regardless of their feelings about the federal law.
"We’re going to pay those same taxes as Arkansans to the federal government. So if it’s going to happen, do we let New York take it and California take it and Florida take it or whoever, and tell our people no?" he said.
Republican legislators said the question of what is best for Arkansas cannot be separated from the question of what is best for the country.
"We’ve got to stop spending money like it grows on trees," said Rep. Allen Kerr, R-Little Rock. "Whether it’s federal money or it’s state money, it still comes out of the pockets of Arkansans and everyone in the country for that matter, and it’s unsustainable."
Rep. Nate Bell, R-Mena, said he did not accept DHS’ projections at face value. He said he questioned the decision to factor in tax collections on federal spending.
"When you’re paying a tax on money that was derived from a tax, even if these folks are in the 35 percent bracket, you’re recovering 35 percent back on the 100 percent that was outlaid by the taxpayers to begin with," he said.
Most of that federal money flowing into Arkansas would come from taxes paid outside of Arkansas, but Bell said that is not the issue.
"There is no free money," he said. "Regardless of whether it’s federal money or state money, it’s still money that’s coming out of the pockets of taxpayers."
Republican House Caucus leader Rep. Bruce Westerman, R-Hot Springs, said expanding Medicaid means expanding government.
"I think when it all washes out that’s the decision we’ll have to make: Do we want to base Arkansas’ future on expanding government programs, or do we want to base it on a viable economic environment in the private sector?" he said.
Westerman said it would be tough to get a three-fourths vote in the Legislature to fund the expansion now, and "I think it may be even harder after the election."
Republicans have a made it a goal to win majorities in the state House and Senate in November.
State Rep. Uvalde Lindsey, D-Fayetteville, said DHS’ numbers will need to be studied, but he called them "heartening."
"It’s the right thing to do to expand Medicaid to cover (more) folks, and if we can get it done for little or no money it sounds like a good deal to me," he said.
Lindsey said a three-fourths vote is difficult to get for anything, but he said he believes Republicans can appreciate a good deal as well as anyone.
"I think a thinking person would understand that covering more folks and providing better health care is a benefit to the state in general, because health and wellness prevents those extraneous costs of catastrophic illness. That’s a big saving, particularly when you look at children," he said.
Paul Cunningham, executive vice president of the Arkansas Hospital Association, said Wednesday that DHS’ projections should make the expansion more palatable to those who have expressed reservations about it. He said the projections note that uncompensated care would decline, which should help hospitals stay in business.
"I think savings on uncompensated care was one of the root reasons for the Affordable Care Act to begin with," he said.