It’s impossible to know exactly what is motivating the governor’s office in terms of the policy decisions around the Medicaid verification mess. But at least part of the context is inevitably political.

Gov. Asa Hutchinson, of course, is in a tricky spot. More than a few Capitol observers believe that Hutchinson would prefer to avoid depriving the budget of billions in federal funding coming in via the private option and would prefer to avoid kicking some 250,000 people off of their health insurance. But that requires approval from an anti-Obamacare legislature. That’s why we have the governor’s Health Reform Legislative Task Force, which is supposed to come up a way to magically continue coverage in some brand new way. 


Many legislators have expressed dismay that the state was months (and in the case of some beneficiaries, more than a year) late in initiating the required annual renewal process which would check on people’s incomes. That includes the Tea Party hard liners but also GOP legislators who might be skeptical of the private option but at least open to supporting whatever AsaCare turns out to be. And to be clear: the delay in renewal and re-verification was a real issue! There really are beneficiaries who are now making a little more money and are no longer eligible for the private option. The state really does have a duty to identify those folks (and ideally, offer information and assistance on what to do next, but we’ll leave that issue aside). People who are no longer eligible for the program should transition out of the program. 

“There are a lot of people who are concerned — rightly so — that we weren’t able to renew right at a year,” DHS Director John Selig said. “There’s a lot of people feeling, ‘you need to get on it.’ So we felt like 10 days was a reasonable time period.” 


The question — and it’s a challenging one — is balance. You want to identify these folks without putting undue burden on beneficiaries, without creating gaps in coverage that threaten access to care, and most of all without accidentally kicking folks off who are actually eligible. Multiple lawmakers and stakeholders close to the process have argued to the Times that the state’s arguably overzealous approach was motivated by an attempt to appease the hard liners on verification in the legislature. 

Now that 47,000 beneficiaries — many or most of them Medicaid eligible — are facing coverage termination, the Hutchinson administration is facing a backlash regarding some of the choices made. And that’s the other side of private option politics: This amounts to a test run on what happens when you have a mass of people losing coverage. Now, in this scenario, you have people losing coverage because they didn’t response to a letter in time (or they tried to but DHS couldn’t process it, or they moved and never received the letter, etc.) And even when people have their coverage terminated, they have ample opportunity to get in touch with DHS and get back on the program.  


Imagine a scenario in which five times as many people lose coverage through absolutely no fault of their own, but simply because the legislature refuses to accept billions in federal Medicaid funds. And they would have no resource to get back on the program; most would simply become uninsured. The governor’s office is now tracking nightmare scenarios in which people potentially can’t get their meds this month; imagine a scenario in which that nightmare scenario is simply the permanent reality in Arkansas. Hutchinson has said he doesn’t want to see anyone eligible for the program denied coverage; is he really prepared to end eligibility for the program and deny coverage for 250,000 low-income Arkansans? 

Here’s the big picture when it comes to private option politics: the simmering threat of ending the program hangs over every single policy decision. A major contributing factor to the troubles Arkansas is now dealing with, for example, is the state’s decision to ban federally funded Obamacare guides, a move meant to woo hard liners during the re-appropriation fight in 2014.

More broadly, every hour that state officials and lawmakers spend in a nail-biting fight for the program’s survival is an hour less spent on efficiently and effectively implementing and managing the program. And believe me, they have spent a lot of hours on the politics over the last few years. 

Here is the paradox, a real challenge for Medicaid innovation. Many of the new experiments happening via federal waivers in the wake of Medicaid expansion are happening in places like Arkansas, where the programs are part of dicey political compromises necessary to pass expansion at all. The result is that experiments like the private option, however worthy, are happening in red states where some lawmakers and state officials may not be as motivated or committed to ensuring that the program actually works for beneficiaries.


Expanding Medicaid via private health insurance on the Marketplace is a worthy experiment, and there have been some happy returns in Arkansas. But Arkansas faces major hurdles for this experiment to work in the long run in a state where lawmakers chip away at the policy and continually flirt with doing away with it altogether.