On Monday, Gov. Asa Hutchinson will meet with Health and Human Services Secretary Sylvia Burwell and other federal officials in Washington to negotiate on the future of the private option in Arkansas. Hutchinson is asking for a series of alterations, including small premiums and cost-sharing for some beneficiaries, attempts to encourage work and best wellness practices, and more use of employer-sponsored insurance for employed beneficiaries. Hutchinson calls this framework “Arkansas Works” and says that it will end the private option — although it would keep the coverage expansion in place, continuing to use Medicaid funds available via the Affordable Care Act (ACA) to purchase private health insurance plans for low-income Arkansans.
The changes envisioned by Hutchinson will require waivers of Medicaid rules from the federal government, which is why Hutchinson is heading to Washington. The agreement that Hutchinson and Burwell hash out will then still need supermajority approval from both houses of the Arkansas legislature in a special session in April. That could be a steep climb, so the details that come out of Monday’s negotiations — the precise shape of “Arkansas Works” — could loom large.
Accompanying Hutchinson on his negotiations will be Senate President Pro Tem Jonathan Dismang, House Speaker Jermey Gillam, and Surgeon General Greg Bledsoe.
I spoke with Bledsoe last week about the negotiations in Washington, the political battle to come over Arkansas Works, and the future of health care reform in Arkansas. A transcript of our conversation, lightly edited for clarity and length:
What was the Hutchinson administration trying to accomplish with the Arkansas Works framework?
I think the main purpose of the Arkansas Works framework is, the governor has been clear that he wants the services to continue to the expansion population but he wants to make it sustainable. The hope is that you can adjust this to get it more fiscally sustainable and hopefully broaden it a little bit so that people who in the past have been against the proposal could come on board and say, ‘there’s been enough adjustment to what’s happened here that I’m willing to vote for it.’ Those were the two overarching goals.
What are you hoping to accomplish with the negotiations with the feds on Monday?
What we’ve been hoping for the past year is that we would get maximum flexibility. And that’s really what the governor wants. The thing that he has a problem with is the one-size-fits-all way of addressing health care needs when it comes to all these different states. And what he’s hoping to do is get as much flexibility as we can for the state so that whatever the end result is, it fits Arkansas and the people of Arkansas — so that we can get the care and the services that those people need in the most efficient way. So flexibility is the biggest thing.
Is there a line in the sand for y’all? Are there certain things that you have to get a YES on or you’re going to walk away?
That’s difficult to answer. Let’s put it this way: the governor is going to push as hard as he possibly can to go as far as he can in these health reforms. Now where he draws that line in the sand, that’s a judgment call. But my impression is that he’s got a good working relationship with the secretary at this point, and we’ve been told by the secretary and by the other folks working with her that we’re going to get as much flexibility as they can offer — so we’re counting on that and the governor is committed to pushing as far as he can towards his vision of reform.
To what extent is the governor going to press on stuff that you know you probably won’t get? Are you trying to kind of move the window in terms of what’s possible?
I don’t think it’s a secret that every conservative in the country wants to move this as far as they can towards a more conservative model of health care reform. The governor is a conservative and he wants to see this changed, so yeah, he’s going to ask for as much as he can. If he gets 75 percent or 80 percent of it, he’s going to continue to push as much as he can to get 100 percent — but realizing that he’s probably not going to get everything. The long-term vision is to push it as far as he can in the direction that he feels that it should go, towards a more conservative model.
In particular it seems like the feds might not be willing to go along with an asset test.
The asset test has been controversial. The governor feels like that’s a common sense request, but there’s going to be a lot of pushback on that. We’ll see what happens.
I think one way to think about these reform efforts is priorities. What’s the most important thing that has to change between the private option and Arkansas Works?
I think it’s a general thrust. You look at the governor’s vision: He wants this to be a way of helping people who are moving up the economic ladder. He doesn’t want people to stagnate and say this is a lifestyle. This is something that he wants to be a helping hand up, to offer people a step up. And he wants people to be transitioning towards higher income, more skills, more opportunities for work. His overall vision is to push in that direction and to sort of push back against what’s been traditionally thought of as — sometimes people attach on to these things and aren’t moving up, but are using this sort of as a lifestyle. He wants to push back against that and that perception of it
We’ve talked about the importance of getting this flexibility from the feds, but let me flip it around. Is the governor prepared to walk away from the private option if he doesn’t get what he asks for? How important is it for the state to find a way forward that maintains the coverage expansion?
The governor is going to do everything he can to push through his reforms. He is developing a budget with the Arkansas Works plan in place and a budget without the Arkansas Works plan in place. They’re very different. He realizes the negotiations could fall apart with the feds — but also he can get everything he wants and still not get the votes in the legislature. We’re hoping that doesn’t happen. But we don’t control the votes on every person in the legislature so we can’t guarantee anything. So he has a contingency plan. If Arkansas Works doesn’t go through, he’s developing a separate state budget for what happens if it doesn’t go through — and it’s very different.
Those two budgets — with and without Medicaid expansion — will give lawmakers two alternatives to consider during the fiscal session, but they haven’t been revealed publicly yet, correct?
That’s correct, they’re working on it. I don’t know what the total difference in the amount of cost to the general revenue would be, but I’ve been told it’s significant if the Arkansas Works plan doesn’t go through. They’re still in development but I’m sure they’ll be released at some point.
And once they are, legislators will know the precise stakes in terms of the budget if they say yes or no to Arkansas Works.
We’ve been talking about policy, but the governor has to consider the politics. Do you think he’s tried to design this in a way where he can get support from the legislature? Do you think there’s momentum behind the Arkansas Works framework?
In terms of momentum, I get different impressions when I talk to folks. It kind of waxes and wanes. I think the governor is doing a great job of meeting with members and getting their input, trying to build a coaltion of people who are interested in health reform and selling his vision to the legislature. But there’s a lot going on. The last elections, the Medicaid expansion was a very controversial issue and a lot of people were elected simply based on the fact that they said, ‘I’m not going to vote for the Medicaid expansion no matter what that is.’
The politics of it all is very complicated. I’ve been very impressed by the work of the task force and the willingness of those members on the House and Senate side to really engage on the issues. But I think anyone who says they know how this is going to go is not being accurate. I don’t think anyone knows. We have our hypotheses for what’s going to happen but the fact is it’s very much in flux and it changes day to day.
One of the things I have tremendous respect for the governor for—if you look at his past, he’s an experienced executive. He knows what it takes to lead an organization. Part of that is you work towards what’s possible. It might not be everything that you want. The governor is a very conservative person politically. But he’s in a situation where he walked in to this. We’ve already had the Medicaid expansion. We had the private option. We’ve already had the money coming in from the feds. A lot of the systems that were designed and were used by the health care system in Arkansas before the Medicaid expansion had been dismantled because of the new money that was coming in. And in addition to that, we’ve got a very liberal administration on the national level that he’s interacting with and so he realizes that that’s the reality. So what he’s tried to do is craft something that is realistic. With a conservative in the White House I think you would see the governor go even more conservative. I think that’s his ultimate hope, is to revisit this depending on who’s in the next administration.
The governor is very pragmatic. He’s a very experienced leader. There are people who want him to go to one or the other extreme on this. I don’t think that’s a mark of good leadership. It’s really a mark of the character of the governor that he’s taking this step in a pragmatic and discerning way.
I talk to people on both sides of the aisle. I want them to remember the history here. The governor was not governor when the original debate was going on. If he would have been the governor some years ago, his position on all this might have been very different. But he was thrust into a role where part of his role is doing what’s best for the state at this point in time. We can’t go back and fight the battle from five years ago. He can’t go back and change history. He has to lead from this point in time. And he’s looking at all this and he felt like this was the best way forward based on where we are now. He’s trying to pick his way through the political land mines to get to where the state needs to be. He’ll take it as far as he can with the current presidential administration and the votes he has in the legislature at this time. And then assuming there’s a change in the leadership on the federal level, he’ll revisit this again.
Arkansas Works has a lot of stuff that could lead to real substantive change versus the private option. But it still uses Obamacare money to fund a coverage expansion. It keeps that in place. Is there the political appetite to approve that?
That’s a complicated question any way you look at it. When you look at the opponents of the ACA, they fall into a lot of camps. There are people who are just against the ACA, period, under any circumstance. They don’t trust the current administration or they don’t like this or that. But then there are people who from a philosophical or policy standpoint feel like the way we’re spending the money is unsustainable. They’re looking for ways to address some of these health care issues but doing it in a different way. The governor’s on record saying that he’s against the ACA, but he still needs to do what’s best for Arkansas at this moment in time.
When I talk to policy leaders around the country, and I talk to the providers and the patients and the folks that are here in the state, and they ask me what I feel like are the big problems with the ACA or Obamacare or whatever — I say that what worries me about it is not that we’re trying to cover these able-bodied people, it’s that the vehicle that we’re using is Medicaid. And Medicaid is, in my opinion—it’s already two things: we’re taking care of the very poor with Medicaid and then we’re also taking care of the special populations. Those are two vastly different camps. Now we’re going to add a third population under this umbrella of Medicaid that is very different from those prior two. It’s able-bodied people who don’t have dependents who are making a little bit of money but are still very poor. Now you have these three camps under this umbrella and the umbrella is a 50-year-old piece of legislation that’s been cobbled together over these 50 years and expanded and mutated and changed. It’s a very clunky way of doing this. So my big problem with it is the clunky vehicle.
I think a lot of people who fall in to my camp look at this and say it’s not that the federal government is spending money — it’s not that it’s even tied to this or that group. The thing that we have a problem with is how the system was designed. And along these points, on this question of how do you change it to make it more efficient, there are people from a lot of different political perspectives who are looking at this and saying there are ways of making this better. To get back to your point, it’s very complicated politically. There’s a lot of special interests involved in this. There are a lot of people who have really, really dug in — and I’m not just talking about the state level, but nationally, so it’s very, very complicated.
I’ve said that it felt like the private option was a step in the right direction. It changed the traditional Medicaid expansion into something that was unique. But I think most people — across the political spectrum — would say that the private option is not exactly where we need to be long-term. The governor wants to get a more pro-work, more efficient system in place. We want to come up with ways that might be a better way of answering some of these questions and solving some of these problems, to be a model for other states. Health care is too important for any side to just disengage. We need everyone at the table. We need the best ideas from all of the political spectrum and we need to have the flexibility to experiment on the state level.