At Gov. Asa Hutchinson‘s presser today, he said that he is planning to meet with officials from the federal Department of Health and Human Services (HHS) on Feb. 1 to try to hammer out an agreement over just how many of conservative bells and whistles he can get added to the private option, the state’s unique version of Medicaid expansion.
The governor has said that he wants a legislative special session in April to vote on the plan. He should have a pretty good idea of precisely what’s possible by then, based on his discussions with the feds, but he won’t have anything official in hand until later in the year.
The federal government is likely to approve most of what Hutchinson is asking for — small premiums for some beneficiaries, incentives for best wellness practices, referrals to work programs or job training. Other items, such as an asset test, are likely to be rejected by the feds.
In some cases, Hutchinson will likely make a show of asking for stuff he knows he can’t get. He’d like to require beneficiaries to have a job in order to remain on the program. That’s been a clear line in the sand for the feds and they will say no. That’s just part of the kabuki theater.
But there are some gray areas and open questions — and some of the details in Hutchinson’s plan remain fuzzy. Will premiums be applied to all beneficiaries who make more than the poverty line, or would they be waivable if beneficiaries participated in required programs such as wellness agreements or work referrals? What would be the consequences for those who failed to pay? Will the feds allow the state to eliminate 90-day retroactive eligibility so that coverage began only on the date beneficiaries sign up, and if so under what conditions?
And here’s a big one: What exactly would happen to beneficiaries who fail to participate in work referral programs? Steve Brawner of Talk Business, who was at the press conference, reported that the governor was asked whether beneficiaries would be required to participate in job training programs. “We’re going to ask for as much requirement as we can,” Hutchinson said. “We’ll see what we wind up with.”
Some of these questions may be deeper in the weeds than your average lawmaker cares to venture. But I’m curious to see just how detailed the plan is once the legislature convenes for the special session in April. The timing here means that lawmakers will be voting on private option 2.0 before the federal government has given official word and final approval on precisely what private option 2.0 will be.
The state’s extension application to continue the private option (a formality giving the federal government notice that it plans to stick with a revised version) says that Arkansas “anticipates submitting an application to amend the Demonstration in Spring of 2016.” So one possibility is that the legislature will basically be voting on the application itself — or more likely, a working draft of it. By that time, the Hutchinson administration will have a very clear sense of what the feds will go for and he’ll have been in close, ongoing communication with them in developing the application for the plan amendment. He wants the private option to continue; there will be no poison pills. In other words, the application, or draft application, will detail a plan that will more or less certainly be approved by the feds.
This would actually be more detail than the legislature had when it originally voted for the private option, back in 2013. While the Beebe administration had already hammered out the broad parameters with the feds and then HHS Sec. Kathleen Sebelius had sent a letter publicly stating conceptual support, the first draft of the waiver application from DHS wasn’t released until more than a month after the legislature voted. Instead, the enabling legislation for the private option articulated the big picture and the executive had some wiggle room to finalize some details. Crucially, it also established requirements for the negotiation: by state law, the private option would only go into effect if certain criteria were met in the waiver.
Expect something similar this time around. Hutchinson will be able to articulate with confidence just what the state is allowed to do at that point. The legislature will have at least a draft of the plan amendment application laying out more details. And the actual legislation can be written such that private option 2.0 only goes into effect if the feds approve the state’s requests.
But given the timing and the requirements for public comment periods, response time, etc., final federal approval likely won’t come until months after the vote, potentially well into the fall. There’s a chicken-and-egg issue here. The governor has said that HHS won’t approve the waiver amendment until it has legislative approval. Again, Hutchinson will already have a crystal clear sense of what’s kosher, so there won’t really be any drama about federal approval. However, the feds will apply terms and conditions that may impact the details of implementation (and for that matter the state itself may implement small tweaks at the margins to its application in response to public comment or ongoing communications with the feds).
I predict that the scattering of aginners will make some version of this point during the debate this April: Nothing will be official until the feds reply, and lawmakers won’t have every bit of fine print available when they vote on private option 2.0. To be clear, we’re talking about a level of implementation detail that the legislature probably shouldn’t be attempting to micro-manage to begin with, but private option politics are their very own brand of silly. I’d say that the chances of someone making a “we have to pass the bill to see what’s in it” joke is quite high.
You can see Hutchinson’s political calculations in the comments quoted above — “We’re going to ask for as much requirement as we can. We’ll see what we wind up with.” Hutchinson has to establish to his base that he’s fighting for every GOP goodie he can get, and he also has to set reasonable expectations about what the feds are likely to okay. His requests are odes to Republican talking points, but he’s also been careful that his own lines in the sand are easy gets.
There is little doubt that the governor and the feds can come to terms both sides can live with. Come April, we’ll find out whether Hutchinson can muster a supermajority in the legislature to agree.