Columns » Ernest Dumas

Untangling health care

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Governor Beebe does not seem to be the kind who loses sleep over a policy dispute, even one as prickly as the new federal health law, but he acted a little spooked over Congress' passage of the landmark bill.

He was bothered by the new costs imposed on the state government to expand Medicaid, even though it would occur long after he leaves office, which will presumably happen on Jan. 13, 2015. Republican lawmakers, none of whom had a clue about what the bill did, screamed that bankrupting the state was among the perfidies of the new health law. Beebe was not so excitable, but the cost of the Medicaid expansion worried him.

None of them needs to be overwrought at all. They ought to be mad at Congress and the president not for enacting the health law but for delaying its key provisions for four years. Some 300,000 Arkansas people need the law right now, and so does Arkansas and, yes, the state government.

The Patient Protection and Affordable Care Act, aka Obamacare, will not only be a relief for hundreds of thousands of people who find health care unaffordable now but it will be an economic bonanza for the state. Beebe ought to be begging to be thrown into that briar patch without delay.

The health law will make low-income adults — those earning up to 133 percent of the federal poverty line — eligible for Medicaid, the federal-state matching program that now pays for nursing-home care for the aged, medical care for children and pregnant women, and services for the disabled. Other states extend it to poor adults as well but Arkansas only barely. Arkansas can cover those earning up to 18 percent of the poverty line. No other state or the District of Columbia is so miserly.

The state Department of Human Services estimates that the law could insure nearly 250,000 Arkansawyers when the Medicaid phase of it is implemented in 2014. The federal government will pay 100 percent of the costs until 2017. The department estimates that their medical expenses will average around $200 a month, which sounds a little high, but if that is true it means that Washington would pump about $600 million a year into the struggling Arkansas health system and the moribund economy.

That is in addition to the hundreds of millions the government would send to the state in the form of subsidies and tax incentives for businesses and individuals above the 133 percent of poverty level to buy private insurance. Arkansas, by the way, also fares better under the subsidized private insurance program than almost any state in the country because we have a higher proportion of families of modest incomes who cannot buy insurance because it is unaffordable.

Somebody is going to have to pay for all this government assistance, of course, but it won't be Arkansawyers. Arkansas has fewer people who will pay the higher taxes: those who make more than $250,000 a year who will pay Medicare payroll taxes, tanning parlors and people with luxury health insurance bargained by the big trade unions.

Could Arkansas stand another billion or so dollars a year of economic stimulus? Ask your local hospital.

Hospital administrators pleaded with Arkansas's congressional delegation to ignore the shrill protests of the uninformed and support the act. Half the delegation did.

If the law works as it is supposed to do, it will virtually eliminate the unreimbursed care at Arkansas's shrinking community hospitals. In 2007, the last year for which numbers are available, the hospitals charged off nearly $1 billion for uncompensated care for people who were not insured and could not pay. The hospitals accounted for another $7 billion as simply uncollectible because insurance companies, Medicare or another third-party payer paid them less than they were billed.

Phil Matthews, president of the Arkansas Hospital Association, said the number of uninsured Arkansawyers and the amount of unreimbursed care had been rising steadily at a pace that more and more hospitals could not withstand.

“We were supportive of the Senate health care bill for a lot of reasons,” he said. “Many of those things like protecting people with pre-existing conditions seemed like just the right things to do, but hospitals are going to be a lot better off going down the road after the new law is implemented.”

Oh, yes, why would the governor and some lawmakers be peeved over the Medicaid expansion? Eventually, states will have to start picking up a share of that $600 million in Medicaid payments to poor adults: 5 percent in 2017, 6 percent in 2018, 7 percent in 2019 and 10 percent from 2020 onward, or about $60 million a year given Human Services' estimates.

But state officials have to calculate the offsetting budget aid of tens of millions of dollars in medical care at the University of Arkansas Medical Center that no longer will have to be written off and replaced by tax dollars. The feds will pay the bills.

The Senate health bill, which became law first, held Arkansas's share to 5 percent forever but the reconciliation bill, was renegotiated because other states were protesting the sweet deal that niggardly states like Arkansas were getting. The formula was changed to treat all states the same. Sen. Mark Pryor voted against the reconciliation bill for that reason, but he acknowledges that the law produced by both bills is still an all-around sweet deal for Arkansas.

You can figure how Beebe was spooked. He was worried about the current Medicaid program that he and Mike Huckabee helped formulate, which faces a shortfall in a couple of years after President Obama presumably stops the $700 million special aid for Arkansas's Medicaid program.

Will this president ever stop lending a hand to this unappreciative state?

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