Big news last night with the announcement that House Speaker Davy Carter and Senate President Pro Tem Michael Lamoureux have endorsed the “private option” for healthcare expansion, the first official public endorsement from GOP lawmakers. The two Republican leaders have struck a relatively open tone throughout the process — will be interesting to see whether others in their caucus follow suit. Even conservative members have been relatively positive of late.
Republican House Majority Leader Bruce Westerman threw a little rain on the parade with a suggestion to wait on the actual appropriation (in practice, this is not a net state expenditure, just permission to spend the federal dollars that will flow through the state Medicaid program). Westerman told me in a phone interview last night that his concern was legislative oversight.
"I don't think [the conservative base] would fault us for trying to do something innovative," he said. "I think they would fault us for giving up oversight over that innovative process." His suggestion was to pass "enabling legislation" this session that would begin the process of establishing the "private option" but wait until next year's fiscal session to deal with the appropriation.
Hopefully legislators and the governor can find a mechanism to establish reasonable legislative oversight between sessions because Westerman's idea does not make sense for the state. Delaying the appropriation would dramatically weaken the benefits to Arkansas of “private option” and could kill the plan entirely.
If you’re going to go forward with the new framework for expansion, waiting until the fiscal session doesn’t make sense for two reasons: 1) It is likely to spook carriers, who have to make decisions on the Arkansas exchange in June. If the legislature appears ready to balk, carriers will balk too. It’s bad for the state’s insurance market generally if we have less carrier competition; it’s a disaster for the “private option” approach. 2) It would sacrifice more than six months (likely a full year, see update below) of the 100 percent federal match rates that are a key part of why this represents such a good deal for the state. Remember those actuarial reports showing hundreds of millions in net gain to the state bottom line in the early years? We’d be kissing a good chunk of that goodbye.
That’s before we even mention the fact it would make a steep climb to three-fourths even steeper, with two separate votes a year apart. I know the governor doesn’t want a special session, but if Republicans are still claiming there are unanswered questions at the end of this session, a special is a much better idea than a delay past this June.
***UPDATE***: The governor's spokesman Matt DeCample writes to say that punting to the fiscal session would likely mean losing the 100 percent match rates for all of 2014, not just the first six months. That's a giant, nine-figure revenue hit (which DeCample links to the GOP's goal of tax cuts). He also notes the chaotic nature of keeping expansion a "maybe." Again, I have to think this would be a deal-breaker for carriers deciding what to do in the next few months.
I don’t know of any way that the federal government or the insurance industry would accommodate a half-year entry for 2014, meaning that we’d lose a full year of 100% federal funding and the state Medicaid savings being counted on for tax cuts in FY15.
Also, imagine what would happen when the insurance exchange opens up on 1/1/14 and 250,000 Arkansans are told that they aren’t allowed to sign up for the new health insurance they’re hearing about until 7/1/14, maybe, depending on what the legislature does in February.