Columns » Ernest Dumas

Lose Obamacare, lose tax cuts



A team of 40 health experts, a task force of 14 Arkansas legislators and a company of corporate consultants backed by millions of taxpayer dollars are assembling to attempt the hardest political gambit of our time: how to make Obamacare look like it's not Obamacare.

And if you just can't work that magic, how do you deal with the human and fiscal catastrophe of ending Arkansas's big share of Obamacare — federally endowed medical coverage for nearly 250,000 of the state's poorest citizens?

Few of the gathering experts will characterize it as a political game, but even Gov. Asa Hutchinson put it in exactly those terms last week when he addressed the health experts and the politicians of the legislative task force.

Although the governor has hinted that Arkansas's "private option" — its brand of Medicaid coverage of the poor offered by the Affordable Care Act (Obamacare) — has been wildly successful, he said he and the legislature nevertheless might have to deal with "political reality" and scrap the program after this year. At the governor's urging in January, the legislature appropriated the federal dollars for the medical coverage through 2015 while the legislative task force, backed by the knowledgeable professionals and some high-powered corporate consultants from Boston or someplace, look for ways to tweak the program so they can say it's not really Obamacare or else replace it with something that would still insure 250,000 people, leave the federal government out and not cost the state government much of anything.

The Republican legislators who dreamed up the private option in 2013 thought they had resolved the political problem. They said it was not real Obamacare, but other Republicans didn't let them get away with it — after all, it employed the purest form of Obamacare, the health care exchanges — and the mavericks won the day last year by electing more Republicans who equated the program with the hated Barack Obama and promised to kill it.

What Hutchinson meant by dealing with political reality is that Obamacare is still unpopular, highly so in Arkansas, especially if it is called Obamacare and not the Affordable Care Act. National polls show that the numbers have gotten better as none of the predictions about the horrible things that would happen come true, but nearly half of Americans still expect bad things to happen "in the long term."

A huge majority of Americans favored universal health insurance in both 1994 and in 2009, when Bill Clinton and then Obama took it up, but the heavy political attacks turned the poll numbers around both times. Clinton folded but Obama and the narrowly Democratic Congress stuck with it and passed the reform in 2010 after stealing the health plan of Presidents Nixon and Ford from 1974, Republican senators and Ronald Reagan's thinktank from 1994 and Massachusetts Gov. Mitt Romney from 2004. They all sought to solve the uninsured problem by mandating private insurance with federal subsidies and expanded Medicaid for the very poor.

Adversaries said the reforms would produce massive unemployment and a depression, but the opposite happened. In the year after the big expansion began at the end of 2013, the nation grew 3 million new jobs, the best in 15 years. Unemployment nosed down toward the full-employment range of 5 percent. Republicans, including House Speaker John Boehner, said millions more would lose their insurance than gain it, but the number of uninsured shrank by 15 million and the number would be sharply higher had some 20 Republican states not refused to expand Medicaid for the poor when the Supreme Court said it was their call.

Republicans predicted that only the very sick would sign up for coverage by Medicaid and the exchanges and that, along with Obamacare's mandate that insurance companies can't cancel insurance or deny coverage to people with chronic illness, would cause everyone's insurance premiums to double. But insurance premiums rose an average of only 3 percent, well below the usual increases of the past 20 years. And, contrary to predictions, the federal budget deficit has been shrinking, not growing.

But in the future won't it mean terrible things? Last week, Dr. Robert Pearl, the health policy wizard, wrote an article for the conservative Forbes magazine blog listing five reasons the Affordable Care Act in the long term was going to transform the health-care system and the insurance market in ways that would benefit everyone, including greater competition, improved care and a drastic slowing of health care inflation.

In Arkansas, the picture has been even rosier. Arkansas led the states in shrinking the ratio of the uninsured. By the end of the year, we will have cut the number by more than half. Community hospitals that were struggling under the load of uncompensated care are thriving and begging the state to continue the private option/Obamacare. Disabled people are getting medical care and returning to the workforce. Even doctors wary over their national association's endorsement of Obamacare in 2010 are coming around as their waiting rooms fill with insured patients.

Old folks who rose up against Obamacare because the ads said it would slash their Medicare benefits are pocketing millions of dollars a year in drug savings and seeing new benefits although they still fear doom is coming.

But while 250,000 poor people may not be easily disposable, they don't make themselves visible to politicians. The economic impact on the state and particularly the government, however, is palpable. Obamacare puts at least $160 million a year into the state treasury — much more if you calculate the indirect creation of income, sales and excise taxes from a $2 billion-a-year infusion of federal dollars into the economy. That is about enough to cover the state's share of Medicaid in 2020 when that day so dreaded by critics of the private option comes.

Part of Hutchinson's political reality is that they have already spent that windfall on tax cuts for the well-to-do and corporations and on the governor's prison reforms. How will the state fare if it kills the private option and has to give that money back? If the corporate consultants can solve those problems, they might earn the millions taxpayers will pay them.

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