Arkansas Appointee Seen as Possible Broker to Save "Private Option"

A Republican legislative leader who was a top negotiator in creating Arkansas' private option will be the new governor's chief of staff. The pick is viewed by some as a sign that the private option may have a defender in the incoming administration. Meanwhile, Arkansas' hospitals are highlighting the difference the private option has made in reducing the ranks of uninsured seeking treatment.

Since Election Day, many eyes have been on Arkansas, which was the first state to negotiate a waiver with CMS for a “private option,” a unique version of Medicaid expansion under the Affordable Care Act (ACA), which allowed consumers to use federal dollars to purchase coverage through the private market.

Arkansas’ private option was the result of delicate negotiations between Democratic Governor Mike Beebe, who is leaving office due to term limits, and a faction of Republicans in the state legislature who sought to extend coverage to the working poor, while lowering the number of uninsured landing in its hospitals.

But the fate of the private option has been uncertain. More Republicans were elected to the legislature this fall, and it would appear the private option will not have the votes when it faces reauthorization this year. Republican Governor-elect Asa Hutchinson was lukewarm about it during his campaign, calling it a “pilot project.”

That’s why many took notice when Hutchinson selected Republican Senate President Pro Tem Michael Lamoureux as his chief of staff. Lamoureux resigned his Senate position this week, and an Arkansas public radio station interviewed a well-known political scientist who speculated that Hutchinson may be looking for a person who can forge a path to salvage the private option—or at least enough of it–to help the new governor save face politically and keep the state’s hospitals from taking a financial hit.

Political scientist Greg Shufeldt told KUAR that Lamourex was willing to work across the aisle to get the private option passed, and he may have influence with fellow Republicans in his new role as chief of staff. However, Shufeldt said, saving the private option will be an uphill battle.

That doesn’t mean Arkansas’ hospitals are giving up without a fight. The private option has made an enormous difference, and the state’s hospital association worked with the Arkansas Chapter of the Healthcare Financial Management Association to commission a study about the impact of expanding insurance coverage to the working poor. Highlights of the study are:

  • Uncompensated care costs fell by 54.6%, resulting in a $69.2 million benefit to the hospitals.
  • The number of people hospitalized without insurance fell by 46.5%.
  • More than 4900 admitted patients were uninsured in 2014, compared with over 9100 in 2013.
  • Although emergency department visits increased overall, the volume of uninsured emergency department visits dropped by 35.5%.
  • Hospitals expect a 261% increase in payment from low income patients in 2014.

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