Arkansas governor calls for reauthorizing compromise Medicaid plan through end of 2016

Gov. Asa Hutchinson called on lawmakers Thursday to continue Arkansas' compromise Medicaid expansion through the end of next year while a proposed task force looks at the future of health care in the state.

The Republican governor said he'll push for reauthorizing the "private option," which uses federal funds to purchase private insurance for the poor. More than 213,000 people are enrolled in the program, which was crafted two years ago as an alternative to the Medicaid expansion envisioned under the federal health law.

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"It is time to close this chapter and start a new one," Hutchinson said in a speech at the University of Arkansas for Medical Sciences. "It is a new day for health care in Arkansas and I pledge to work with you to find the right solution for all of Arkansas. While we're turning the page and beginning a new effort, our innovative efforts in Medicaid reform will continue."

Twenty-seven states and the District of Columbia have agreed to expand their Medicaid program under President Barack Obama's health care law. Arkansas was the first state to win approval for such a hybrid plan, which cleared the way for other Republican-leaning states to negotiate similar compromises.

Hutchinson remained mum throughout his campaign about whether he would support continuing the program. He has acknowledged its benefit to hospitals, which have wound up caring for fewer uninsured patients, but said he's worried about Arkansas' eventual share of the costs — 5 percent in 2017 and 10 percent by 2020.

Hutchinson noted the estimated cost to the state when it begins paying for 10 percent is nearly $222 million.

The program's future became even hazier in November, when several new legislators were elected primarily due to their vows to kill the expansion plan. Reauthorizing the program will require three-fourths support of the House and Senate, a threshold barely cleared last year.

Hutchinson said he wants the task force to issue its recommendations by the end of this year.

He also wants to pursue changes to Medicaid to encourage participants to look for work and incentives to seek preventive care. U.S. Health and Human Services Secretary Sylvia Burwell, who met with Hutchinson last week, indicated the federal government was open to negotiating those changes.

"We appreciate and support your desire to avoid a piecemeal approach to reform and look forward to working with you on a potential broad block of changes that could lower costs and improve access and quality in ways that best meet the needs of your state," she wrote in a letter to Hutchinson dated Thursday.

Hospital officials said they were relieved about Hutchinson's approach.

"The proposal to continue the current waiver through the end of 2016 clearly provides stability that has been absent up until the present," UAMS Chancellor Dan Rahn said. "That's very important for those who are newly insured and very important for the health care system in Arkansas."

The expansion has sharply divided Republicans who became the majority party in Arkansas over the past three elections primarily by running against the health care law.

Sen. Cecile Bledsoe, who chairs the Senate Health committee and is a vocal opponent of the private option, viewed Hutchinson's plan as a path toward ending the program.

"I think you could in a sense call this a wind down," Bledsoe, R-Rogers, said.

Hutchinson also could face resistance from Democratic lawmakers who've said they're wary of changes they believe would hurt the private option.


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