Columns » Ernest Dumas

Consultants provide cover


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Arkansas is laying out a few million taxpayer dollars for corporate consultants to tell legislators and the governor how to handle some political hot potatoes, principally a moribund lottery and the expansion of Medicaid to poor adults, which is the biggest feature (in Arkansas) of the still unpopular Obamacare.

Should the potential waste of your dollars on a bunch of whiz kids with inflated resumes bother you?

You can't know for at least a year and probably much longer, when you might be able to fathom whether the consultants gave Republican lawmakers and the governor any constructive advice and whether they took it. Three or four million dollars, after all, is measly change in a $5 billion state budget and well worth it if the consultants show the puzzled government leaders how to provide medical assistance to the poor more efficiently than does Arkansas's currently approved version of Obamacare and how to live with a government-run lottery that taxes the poor and gives their spawn little help in getting an education.

But it is hard to escape the conclusion that the consultants are being paid millions for political cover. Taxpayers would be justified in their anguish over such waste, but if you're in politics it's money well spent to be able to say, "Look, these guys are paid big bucks to advise giant corporations on managing their businesses, so you know they're good. If they say this is what we have to or need to do, how can you quarrel with them?"

You know the background of the consultant hiring.

Soon after the state began the scholarship lottery in 2009, people were spending $470 million a year on lottery tickets and some $95 million of it actually reached college kids. (The state could have funded those scholarships and more from its general revenues every year without a lottery or new taxes.) As in virtually every state that ever started a lottery, after three years many people quit buying tickets when they didn't hit the jackpot, and lottery receipts and scholarship aid plummeted. So the state is choosing among politically connected consultants to advise the lottery and the legislature for a couple of years on how to get more people addicted and the numbers back up.

Other states have tried to do it with slick promotions like billboards in poor neighborhoods that show people getting rich or else starting new and more addictive games. You could try to squeeze a little money out of the haul that goes to the big international gambling vendors, Scientific Games and Intralot, but who wants to do that?

But it is the Obamacare dilemma that requires political cover for legislators and Gov. Hutchinson. Arkansas is one of the few states run by Republican lawmakers that elected to give poor working adults health coverage through Medicaid after the U. S. Supreme Court said that states could opt out of that part of Obamacare. The Republican legislators who came up with the "private option" — moving most of the new Medicaid enrollees into Obamacare's private insurance market — were considered traitors and some were beaten at the ballot box. Saddled with a bigger Republican majority with enough votes to kill the Medicaid program, Hutchinson in January said let's keep it this year while we see if there is another way to continue medical care for those 260,000 people, keep community hospitals afloat and keep the extra $100 million-plus a year from Obamacare flowing into the state treasury.

It is an immense problem but an altogether political one. The state will have to start spending some of its own tax monies on the adult Medicaid program in 2017, although that spending will be offset by the receipts the program brings into the treasury and it will pale beside the $1.5 billion the state already spends matching federal dollars for older Medicaid programs that neither the governor nor any legislator wants to drop because they aren't associated with Barack Obama.

Hutchinson and the legislature have a giant advisory committee comprising some of the wisest people in the country on health care and insurance to advise them on the problem, but some of them are suspected of harboring secret admiration for the Affordable Care Act. So the legislature took bids from several big firms of consultants to analyze the private option and advise legislators how to get out of the private option or seem to get out of it without doing much harm. The Stephen Group of Manchester, N.H., landed the job. It must produce lots of charts and algorithms.

The governor needed to cover himself and last week he hired Lanhee Chen, a Harvard-educated Republican consultant at Stanford University's conservative think tank to tell him what to do when the legislature's corporate whiz kids tell it what to do about the private option.

Chen, whom the state will pay $100,000, has been hired by some of the best for his advice on hot political issues. In 2012, Mitt Romney hired Chen as his health and tax policy adviser and he proved to be Romney's meanest attack dog against Obama. Chen came up with the factually erroneous charge that Obamacare was "the biggest tax increase in American history." (Ronald Reagan's 1982 tax hike was the largest of recent times.)

Chen's uniform advice on health care has been to repeal Obamacare and, barring that, scrap as much of it as you can under Section 1332 of Obamacare, which allows any state to set up its own insurance plan after 2017 as long as it covers as many people and just as comprehensively as Obamacare and it does not increase the federal deficit.

In other words, do the same thing but don't call it Obamacare. If the consultants can pull that off, you can decide if Hutchinson and your lawmakers spent your money well.


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