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Arkansas Governor Seeks Task Force for Medicaid Changes

By Rebecca Adams, CQ Roll Call

January 22, 2015 -- Arkansas Republican Gov. Asa Hutchinson called for continuing the state's current Medicaid system through the end of 2016 but creating a task force to recommend changes after that.

"I want us to have a health care system that is compassionate, affordable, fits Arkansas, and provides access to care," Hutchinson said in a speech last week.

Hutchinson said that continuing the current program through Dec. 31, 2016, would avoid harming the approximately 200,000 Arkansans who use the model and ensure hospitals and other providers financial stability.

"It is time to close this chapter and to start a new one," he emphasized.

The system that Hutchinson would like to revise in 2017 has become a template for other states around the country led by GOP governors. Under a waiver from the federal government because the Arkansas system does not adhere to traditional Medicaid rules, the state has used its Medicaid dollars to buy health insurance plans for its residents through new marketplaces created under the health care law (PL 111-148, PL 111-152). That so-called private option is available for people who are eligible under guidelines that expanded the program for adults with income up to 138 percent of the federal poverty level.

But the state legislature has to continue to sign off on the model with a supermajority vote every year. Some Republican legislators want to make changes to lower costs, connect Arkansans to state job programs or require beneficiaries to pay more for their care. Hutchinson said he wanted more reliability and predictability so that the program does not face a "cliff" every year that has to be renewed.

The year 2017 would be a natural point to make adjustments. Under the health care law, federal officials will pay for all of the costs of the newly eligible people who gained coverage because of expanded eligibility guidelines. But starting in 2017, states start to pick up more of the costs until the federal share phases down in 2020 to 90 percent of costs for people in the expansion population.

The health care law allows states to seek major changes starting in 2017 under a new type of waiver. The flexibility allows states to waive big parts of the health care law, including the marketplace plan requirements, if state officials create a different way of achieving similar results.

Hutchinson wants the task force to start its work later this year and outlined a series of policies the group may want to consider, including:

  • Minimizing or eliminating the need for the state additional general revenues for continued investment in the Medicaid expansion program. "Obviously, you have to keep up with inflation," but Hutchinson said he wants to minimize the need for more revenue than that.
  • More federal flexibility in managing Medicaid. "We fought for that; we want to continue to fight for that," said Hutchinson.
  • A block grant type waiver or "authority so we can have a maximum amount of flexibility in Arkansas."
  • Encouragement of low-wage workers to get coverage through their employers, with potential help from Medicaid.
  • Increasing accountability and personal responsibility for healthy behavior.
  • Improved access to services for people in rural areas of the state.

Hutchinson said he recently received a letter from Health and Human Services Secretary Sylvia Mathews Burwell, with whom he has met previously to talk about Medicaid expansion.

"We made the case we needed more flexibility in Arkansas to determine our own direction" in Medicaid, Hutchinson recounted of the meeting.  

Burwell wrote that she was pleased to learn of the state's commitment to an effective and affordable approach beyond the current three-year term of the waiver and to move forward on major delivery system reforms that would apply to the larger Medicaid population. She said that she understands the governor's desire to encourage employment and supports his desire to avoid a piecemeal approach to changes. Burwell said she looked forward to working with the state on a broad block of changes.

"I noticed that there was not resounding applause at any point during the speech," Hutchinson said at the conclusion of his speech, to laughter and applause. He said he thought that simply means that "whatever we do, we're going to get criticized, we're going to get applauded" by different sides of the debate.

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