LITTLE ROCK — The Republican-controlled Senate passed legislation Friday outlining the state’s plan to extend health care coverage to thousands of Arkansas’ working poor through the federal Affordable Care Act.
By a vote of 24-9, the Senate approved Senate Bill 1020, which would enable state human services officials to proceed with setting up a program using federal Medicaid dollars to subsidize the purchase of private health insurance for an estimated 250,000 people with annual incomes of up to 138 percent of the federal poverty level through the state’s health insurance exchange rather than adding them to the Medicaid rolls.
Actual implementation of the proposal hinges on House and Senate approval of a separate appropriation to be included in the state Department of Human Services budget — requiring a three-fourths vote in each chamber — and final approval of the plan by the U.S. Department of Health and Human Services.
The so-called private option, which Democratic Gov. Mike Beebe negotiated with HHS Secretary Kathleen Sebelius with ideas from Republican lawmakers, has softened staunch GOP resistance to any expansion of health care under the federal health care reform act known as Obamacare.
"I believe our responsibility is to do what we can here in this state … to take care of our citizens, to make sure that they have the access that they need and in the places that they need, and this bill is really the result of recognizing that," sponsoring Sen. Jonathan Dismang, R-Searcy, told Senate colleagues before the vote on SB 1020.
"I believe that we have tailored a program here in this bill that works for Arkansas, one that’s conservative in nature and takes into account and embodies a number of conservative principles," Dismang said.
The bill now goes to the House, where potential stumbling blocks emerged Friday.
The House Public Health, Welfare and Labor Committee rejected House Bill 1256 by the House GOP leader, Rep. Bruce Westerman, R-Hot Springs, which calls for the creation of a seven-county pilot program in which Medicaid recipients would be issued identification cards they would have to use to verify their identity when receiving benefits.
After the hearing, Westerman fired off a news release titled "Rejection of reform puts private option at risk."
"This bill was a key reform initiative to save money in our state Medicaid program and help fulfill our promise to make it more sustainable. Its partisan rejection seriously puts at risk House Republican support of the private option," he said in the release.
Westerman also told reporters he planned to introduce alternative legislation to enact the private option. He said that under his bill, now in shell form, the expansion population and the current Medicaid population, except for the aged, blind, disabled, would buy private insurance through the state insurance exchange.
The plans would have co-pays, deductibles and low premiums, he said, and the money saved on the premiums would go into health savings accounts that the beneficiaries could use to pay deductibles and co-pays — or for other purposes, including education or job training that could help them get off government assistance.
"They would be considering the financial aspects of the decisions when they make those health care decisions, and there would be incentives for them to save some of that money," Westerman told reporters.
House Speaker Davy Carter, R-Cabot, said Friday that despite Westerman’s statements, he believed House members would support the original expansion bill.
"The Senate passed it out with an overwhelming majority today, and I think we’ll do the same next week," he said.
In whatever form it takes, the private option for expansion would be fully funded by the federal government for the first three years, after which the state’s share of the cost would gradually increase to 10 percent.
SB 1020, along with the House version, House Bill 1443, includes language requiring a person enrolled in the program to "affirmatively acknowledge" that the program is subject to cancellation and requiring the state DHS to develop a pilot program allowing a limited number of enrollees to participate in health savings accounts.
The legislation also requires the Legislature to revisit the option in 2017, and includes a provision that would end the program within 120 days if the federal funding falls below certain annual percentages. The measure also requires the state to seek federal approval to move some children and adults in Medicaid to the insurance exchange.
A recent study commissioned by the state Insurance Department estimated the private option would save Arkansas about $670 million over 10 years.
"The cost to do nothing, particularly to the state, is greater not only in the short term but also greater for the long term than doing this. I think it’s a better option, a better option for our people," said Sen. David Sanders, R-Little Rock, a co-sponsor on SB 1020.
The governor told reporters Friday he was pleased the bill had passed the Senate and that he and supporters of SB 1020 were "going to fight like the devil" to get the bill passed by the House.
He said he was not concerned that the private option appropriation is attached to the DHS budget, adding, "I don’t think anybody wants to go home without a human services budget."
Dismang downplayed SB 1020’s failure to receive a three-fourths majority — 27 votes in the 35-member Senate.
"A lot of members have a lot of things to work through on these bills and I think the important thing to know is, this bill passed with 24 votes. I think that’s good and shows a commitment by a majority of the body to move forward," he said.
One of the members who voted against the bill, Sen Jim Hendren, R-Gravette, said he was concerned about future generations and the growing national debt.
"I have great respect for the work that my colleagues did and they made the program much, much than it was, but at the end of the day it’s still a huge increase in spending and we’re basically broke," Hendren said, adding that he would rather strengthen programs that already exist.
Sen. Cecile Bledsoe, R-Rogers, who also voted against the bill, said she wondered if the nation and the state could afford the program.
"At some point we’re going to have to stop the spending, and I did get many, many e-mails from my constituents saying the same thing," Bledsoe said.
Sen. Eddie Joe Williams, R-Cabot, declined to comment on why he voted "no," but during the Senate debate he asked if the state would be able to afford to pay its share of the program in 10 years.
The sponsors noted a mandate in SB 1020 for a legislative review of the program in 2017, and that the legislation contains triggers to shut it down if the federal government fails to fund it at promised amounts.