LITTLE ROCK — The House Public Health, Welfare and Labor Committee had its first discussion of the session Tuesday on one of the biggest issues on the Legislature’s plate — whether to expand Medicaid under the federal Affordable Care Act.
Dr. Daniel W. Rahn, chancellor of the University of Arkansas for Medical Sciences, and Dr. Joe Thompson, the state surgeon general, testified before the committee on problems the health care community faces and the impact that Medicaid expansion, which both of them support, would have on those problems.
Rahn said UAMS currently spends $66 million a year treating patients who are uninsured and unable to pay for their care. If Arkansas were to expand Medicaid to cover people earning up to 138 percent of the federal poverty level, that cost is projected to drop to $38 million a year, he said.
"It’s still a big negative number, but it’s a significant improvement," Rahn said. "Absent that, we’re continuing down this trend line of more and more incurred cost without a new revenue stream to offset it."
The Affordable Care Act initially required states to expand Medicaid or lose Medicaid funding, but the U.S. Supreme Court has ruled that the federal government cannot threaten to withdraw funding from states for non-compliance, effectively making the expansion optional.
Gov. Mike Beebe has urged lawmakers to approve expanding Medicaid. Republicans, who comprise majorities in both the House and Senate, generally oppose expansion and some GOP lawmakers have floated the idea of postponing the matter for a decision later in a special session. Beebe wants the Legislature to decide in the current regular session.
State officials say the expansion would add up to 250,000 Arkansans to the Medicaid rolls. Rep. John Burris, R-Harrison, the committee’s chairman, noted Tuesday that about 500,000 Arkansans are now uninsured.
"If there’s 500,000 uninsured in the state right now (and) only 250,000 are covered under the Medicaid expansion, that’s going to mean 250,000 more people on a private plan that reimburses at a higher rate than Medicaid,"Burris said. "I haven’t seen that factored into any of these uncompensated care numbers."
Rahn said there are many unknowns right now, including the percentage of uninsured people who will actually fulfill their responsibility to buy private insurance and the impact of the state’s health care payment reforms.
"There are just many, many moving parts," he said.
Burris responded, "I guess the point of my questions is, it takes a week to snap out a study on Medicaid and how much money it’s going to save on expansion, but whenever I ask about the new number of private insured and what that means for hospitals, it’s always too hard to quantify."
Rahn said officials should be able to narrow things down "as we go down the pathway."
Thompson testified that estimates by the state Department of Human Services on the impact of expanding Medicaid took months to prepare, not a week as Burris suggested. Regarding Burris’ question about the impact of people who will be required to buy private insurance, Thompson said the Affordable Care Act is projected to have a net positive impact on the state of $550 million a year, an estimate that he said takes into account the impact of both the Medicaid expansion and the purchase of private insurance by people now uninsured.
Thompson said the agency’s estimates are "that we would end up with 400,000 individuals with insurance … that we would save 2,300 lives a year because of people getting earlier and more effective care, that it would generate 6,200 jobs … and that it would net about $550 million a year statewide," he said.
Thompson said he did not have an estimate of the impact that new privately insured patients would have on individual hospitals, but he said officials are working on a county-by county breakdown.
Burris said that information would be helpful to have.
"It seems like the real benefit here is those quarter of a million people that are going to have (private) health insurance," which reimburses at a higher rate than Medicaid, he said. "I haven’t seen that really talked about or discussed nearly as much as I have the Medicaid expansion."
Thompson said the difference in reimbursement rates between Medicaid and private insurance should decrease when uncompensated care becomes less of a problem.