A judge’s invalidation of the work rule for the Arkansas Medicaid expansion program figured strongly in a House defeat Friday of the first attempt to pass the Department of Human Services’ Medicaid budget. The vote was 52-28, with 11  voting present, and 75 votes needed for passage.

Rep. Lane Jean, in presenting the bill already approved in the Senate, said the governor and speaker wanted a vote today, after Rep. Julie Mayberry asked for a delay. He said he was hopeful the judge’s ruling would be overturned, but if it was not it would roughly cost the state $20 million in increased spending to cover people otherwise disqualified from the program. But he said DHS had sufficient room in its budget to cover that amount.

The budget is $8 billion. The portion devoted to the Medicaid expansion, known as Arkansas Works, accounts for about $135 million in state spending. The budget also includes spending for children and the disabled.

After the vote, Gov. Asa Hutchinson said:

Some House members still have questions regarding Wednesday’s work requirement ruling. That’s to be expected. I expect a second vote next and I trust the bill will pass.

Rep. Grant Hodges opposed voting on an $8 billion budget bill less than two days after the court ruling. He also questioned the speed with which the bill was approved in Joint Budget and the Senate.

“Why is this appropriation not being amended at all?” Hodges asked. What’s the point of an appropriation, he asked, if “DHS can do whatever they want anyway.” He referred to statements that DHS had the money to cover the budget either way.

Hodges observed, too, that a final decision on an appeal had not been made by the federal government, defendant in the lawsuit. He said the House deserved to be treated as a co-equal and not forced to accept the Senate approval without questions being answered.

Rep. Dan Sullivan
questioned whether an emergency required a vote today. “The sky’s not going to fall if it doesn’t,” Jean replied. Sullivan said a further debate was needed.

Rep. Deborah Ferguson, amid complaints about growing state spending, noted that Arkansas “actually made money on Arkansas Works.” This is because the private option version of the Medicaid expansion, through private insurance companies, relieved Arkansas of Medicaid spending on people who otherwise would have been covered on the traditional Medicaid program. (Expansion Medicaid is funded by the federal government at a higher matching rate than traditional Medicaid, meaning lower per-patient expenditures by the state.) The expansion also spurred spending that generated fees and taxes. Ferguson noted a looming Medicaid deficit in 2013 was solved by the Medicaid expansion.

The defeat was more or less expected, given the 75-vote requirement. Now the governor knows on whom he needs to work.

There will be more votes.

Reactions included this from the Arkansas Citizens First Congress, which said the vote imperils the entire state budget and health care from almost 300,000 people.

We are not to the point, but if the Medicaid expansion isn’t acceptable to three-fourths of the House without the work requirement, an end to the program would deliver a massive hit to state revenue with consequences including recent tax cuts and outlays for other services.