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February 11, 2014 10:58 AM Arkansas’ Medicaid Expansion: Will Ideology Trump Objective Reality?

By Ed Kilgore

Amidst a revival of progressive hopes that the logic of the Medicaid expansion would eventually sway Republican officeholders in the 25 states that have not yet approved it, the state often touted as a model of compromise on the subject may soon abandon its own expansion.

Prospects for continuing the expansion in Arkansas that was launched last year after HHS approval of “the private option” enabling enrollment of the expanded Medicaid population in private health insurance plans took a hit when a staunch opponent won a special state senate election last month. And things have gone downhill ever since, per this report from the New York Times’ Abby Goodnough:

Last year, the Republicans who control this state’s Legislature devised a politically palatable way to expand Medicaid under President Obama’s health care law. They won permission to use federal expansion funds to buy private insurance for as many as 250,000 poor people instead of adding them to traditional Medicaid, which conservatives disparage as a broken entitlement program.
But just as the idea is catching fire in other states with Republican or divided leadership — Iowa has adopted a version of the plan, and New Hampshire, Pennsylvania, Utah and other states are exploring similar avenues — Arkansas may abruptly reverse course, potentially leaving the 83,000 people who have signed up so far without insurance as soon as July 1.
Facing pressure from conservative challengers in the May primary, several Republicans who supported the plan last year are now considering switching their vote when the Legislature votes to reauthorize its financing, possibly as soon as next week. The defection of just one Republican could kill the program, state officials said.

Killing the expansion would not just take away insurance from 83,000 Arkansans while denying it to tens of thousands more who would qualify; it would also leave a big hole in the state budget, as noted by Democratic Gov. Mike Beebe, who brokered last year’s compromise:

“You’ve got a very small minority of people who can derail this,” said Gov. Mike Beebe, a Democrat who helped engineer the plan but will leave office at the end of the year because of term limits. He warned that ending the program would create an $85 million hole in his proposed budget — and devastate hospitals that were counting on the new federal funds.

It’s not as though the people benefitting from the expansion are are on any sort of easy street. A single working person—the main objects of the expansion—cannot earn more than $15,900 a year and still qualify. And the Arkansas plan requires copayments for those with incomes between 100% and 138% of the federal poverty line; there are no copayments at all in traditional Medicaid.

So you’ve got privatized Medicaid and “skin in the game” for beneficiaries—two big concessions to Republicans—with the feds picking up all of the initial cost and well over 90% for the next decade. Killing the expansion will be disruptive for insurance companies, hospitals and 83,000 patients, and could destabilize the state budget. But that’s not enough for “true conservatives,” it seems; the power of ideology and the hatred of anything associated with Obamacare is that intense.

Maybe still more concessions will enable the Arkansas expansion to survive, but it’s an object-lesson in how long it will take the Affordable Care Act to pass the point of no repeal, regardless of objective reality. For the foreseeable future, that rock could always roll right back down the hill.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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