A funding fight looms as the fiscal session begins this week: A rump group of tea party legislators are threatening to hold the entire Medicaid budget hostage in order to try to end the private option. A Medicaid shutdown would immediately end funding for some of the state’s most vulnerable citizens on July 1, including the aged, disabled and the blind; people in nursing homes; children on ARKids; and foster kids receiving medical care.
The private option uses money available via the federal Affordable Care Act to purchase private health insurance for low-income Arkansans. It’s the state’s unique version of Medicaid expansion, which expands coverage to adults who make less than 138 percent of the federal poverty level (around $16,000 for an individual or $33,000 for a family of four). Gov. Hutchinson’s plan to continue the policy, now renamed “Arkansas Works,” easily passed both houses of the legislature last week with enormous bipartisan majorities — 70-30 in the House and 25-10 in the Senate, with a majority of Republicans in each chamber joining all Democrats in backing the measure. The private option provides health insurance to more than 267,000 low-income Arkansans, projects to save the state budget hundreds of millions of dollars, saves billions in uncompensated care costs for state hospitals, and pours billions in federal money into the state’s health care system and economy.
The governor signed “Arkansas Works” into law on Friday. However, the appropriation for the Medicaid budget — that’s not just the private option but all Medicaid services — is generally thought to require 75 percent approval in both houses. Theoretically, just nine senators (or 26 in the House) could shut down the entire Medicaid program if the overwhelming majority didn’t give in to their demands to rescind “Arkansas Works.”
With tensions flaring at the Capitol, Sen. Bart Hester (R-Cave Springs) made a chilling statement, published in the Arkansas Democrat-Gazette last week: “We’re playing some pretty hard chicken right now with both people’s feet on the accelerator. I think the only thing that’s going to bring resolution to this is a crash.” If Hester makes good on his threat, a humanitarian disaster would follow.
Hutchinson expressed confidence that the nightmare scenario threatened by Hester could be avoided. “My objective in the coming days is to win the funding for the Department of Human Services that would include the Arkansas Works legislation that has been adopted,” Hutchinson said. “It is my responsibility as governor to avoid what some have described as an inevitable crash. I want, as governor, to avoid that crash. I want to keep the wheels of government on the road, and progressing and working for the people of this state. I’m confident that this can be done.”
Most observers at the Capitol believe that the governor will be able to find the needed supermajority in the House. Rep. Laurie Rushing (R-Hot Springs), who voted against “Arkansas Works,” said that she had no intention of playing shutdown games with the appropriation. “The people of Arkansas have spoken through their representatives,” she said. “There’s no reason to hold up the whole DHS budget when the majority of Arkansas wants Arkansas Works.” Rushing said that six other House members who had voted against the legislation felt the same way.
The Senate is another matter, where nine to 10 senators, led by Hester, are digging in their heels.
What happens if the Tea Party 10 make good on their threat and drive the state over the cliff? At the end of June, all funding would end for the following:
Medical care for the aged, disabled and the blind, covering 142,077 people. This includes the elderly in nursing homes and people with severe disabilities.
ARKids, providing coverage for almost 400,000 low-income kids.
Home and community-based services for 11,000 elderly people and people with severe physical disabilities.
Medical services for nearly 5,000 foster children (the Division of Children and Family Services is not part of the relevant Medical Services appropriation, but medical care for many foster children is funded via the Medicaid budget).
TEFRA, a Medicaid program that provides care to disabled children in their homes. Funding that helps thousands of families with children with severe health challenges such as cerebral palsy and wheelchair-bound children would halt.
Coverage for around 1,000 developmentally disabled patients receiving care at the Human Development Centers.
Funding to help more than 60,000 elderly Medicare beneficiaries with care and costs not covered by Medicare.
Coverage for more than 10,000 extremely poor parents of dependent children.
Coverage for more than 10,000 low-income pregnant women who are not otherwise covered by the private option.
Closure of the 250-bed Arkansas Health Center, a public nursing home that takes patients that few or no other nursing homes will take, such as patients on a ventilator and patients with severe cognitive dysfunction.
State hospitals that provide care for civilly committed patients having acute and severe behavioral health crises would lose 30 beds.
These Arkansas patients and families would have funding for their medical care evaporate if Hester makes good on his threat of a “crash.” (This is not an exhaustive list.) Most would find themselves without good options for access to medical care that they desperately need.
On top of that, billions of dollars in Medicaid payments to providers, hospitals, nursing homes and clinics would immediately halt. And DHS would face massive layoffs, likely with unforeseen consequences throughout the department.
Just to be clear, all of this is on top of the more than a quarter-million low-income Arkansans in the Medicaid expansion population who would lose their health insurance if Hester achieved his aim of ending the private option. Hester’s real goal is to end their health coverage; he’s merely using the elderly, disabled, kids and others in the traditional Medicaid program as hostages to try to get his way via a game of “hard chicken.”
When the Times asked Hester about his statement last week, he said, “We have until the end of June to work something out. I don’t think we’ll have to have a shutdown.” However, Hester promised to make good on his threat and go through with a full Medicaid shutdown — immediately ending all of the funding described above for the state’s most vulnerable citizens come July 1 — if the governor and the legislative majority didn’t cave to his demands and end the Medicaid expansion. “I would,” he said, but added that he hoped the legislature would come up with a creative solution to avoid that scenario.
Hester’s hope is that the aginners can pass a Medical Services appropriation with “Arkansas Works” stripped out — in other words, it would fund the traditional Medicaid services described above, but would eliminate Medicaid expansion. The problem is that Hester’s group is a tiny minority. The legislature just voted overwhelmingly to approve “Arkansas Works.” Hester’s small group of aginners doesn’t have anywhere close to a supermajority to pass an appropriation that kills the Medicaid expansion. They don’t have anywhere close to a simple majority. They don’t have anywhere close to the votes to even get an amendment out of committee.
“There’s a fundamental principle of government that we need to deal with, and that is that the minority should not derail the expressed will of the majority,” Hutchinson said.
The governor posed a question for Hester and company: “Will the Democrats, and the Republicans who have supported Arkansas Works, will they vote for an appropriation bill without Arkansas Works?” In other words, Hester, for now, has the votes to block Medicaid expansion, and the entire Medicaid budget — but to actually pass something, he would have to change the minds of 17 senators and 45 members of the House. This seems unlikely.
Instead, the only tool that the Tea Party 10 have is a threat, which Hester promises they will make good on: to crash the government and unleash an unimaginable nightmare on the state of Arkansas and its neediest citizens.
“If he’s really willing to run into a wall instead of solving problems, that’s unfortunate,” said Minority Leader Michael John Gray (D-Augusta).
There is no sign that the majority will simply fold because of Hester’s threats, leaving the fate of the Medicaid budget uncertain. The fiscal session can last up to 45 calendar days, with the final possible day in late May. That would leave just a month to come up with a resolution, with the entire state budget in limbo.
“You could have a standoff,” Hutchinson said. “That’s what leads to government shutdowns in Washington. We’ve never had that in Arkansas. I don’t expect to have that under my watch.”
Support for special health care reporting made possible by the Arkansas Public Policy Panel.