The Arkansas House of Representatives voted this afternoon against accepting federal money for a Medicaid expansion that conservatives in the state argue will hurt taxpayers and low-income workers.
By a 69-28 vote, representatives failed to meet the three-fourths supermajority required to pass the initiative. Arkansas House speaker Davy Carter announced that the bill would be put to a second and final vote on Tuesday.
Democratic Gov. Mike Beebe said he would remind state House members that “if they vote against this, they will be voting for the biggest tax increase in history.”
The debate in Arkansas revolves around a Republican-sponsored bill that would funnel federal money into private companies to subsidize the health care costs of lower-income workers. Initially, the proposal’s Republican sponsors warmed to the notion of lowering health care costs on businesses by allowing federal funds to subsidize low-wage workers’ health care, but conservatives across the state are now vehemently rejecting the so-called private option.
“What they’ve done is convince themselves and a few voters that this isn’t Medicaid expansion,” said Nic Horton, policy analyst and editor of TheArkansasProject.com.
“They want to take vouchers from Obamacare money to buy private insurance with it, and call it a ‘private approach,'” he said. “If that’s a private approach, then so are farm subsidies.”
The bill, HB 1219, is expected to add roughly 250,000 people to Arkansas’ Medicaid rolls, putting the state total at over 1 million.
The federal government, through the Affordable Care Act, is offering to pick up the tab for the state’s Medicaid bills for the next three years, after which the amount paid for by Washington will decrease to 90 percent by 2020. The move is an incentive for Arkansas to “opt-in” to the national health system and begin structuring its Medicaid system accordingly. Many Arkansans, however, are skeptical of the D.C. carrot.
“This is the federal government saying basically, if you do what we want you to do, we’ll spare you the cost of Medicaid. Those are the constituent elements of a bribe,” said Curtis Coleman, an Arkansas Republican gubernatorial candidate.
“None of this is guaranteed, with the federal government facing insolvency. There’s a trigger in the Arkansas bill that says if the federal government can’t pay its part of the bill, then it’s void. But how are you going to tell 250,000 people who are receiving Medicaid benefits that you’re kicking them off the program? It’s just not a practical action for a practical solution,” he said.
According to Horton, under the bill, enrollees will have to sign waivers stating that they understand the program could end at any time, and is not a federal entitlement.
“I don’t think that’s very realistic,” he added.
Any Medicaid reforms included in the bill can, and should, be passed without the expansion of the program, said Horton.
“There’s no reason that reforms need to be tied to this bill,” he said. “Any incremental reforms are going to be overshadowed by the compiling debt.”
Dan Greenberg, the president of the Advance Arkansas Institute and a former state legislator, authored a study on the private option that found the Medicaid expansion would severely hurt low-income workers and trap them near the poverty line.
“As a general matter, low-wage employees under Medicaid expansion will lose coverage as their wages rise,” Greenberg wrote in the study. “For instance, a $7.50/hour wage-earner can stay on Medicaid if he or she works less than 42 hours a week; however, any material salary increase will disqualify that worker from Medicaid eligibility rapidly.”
“This is not cost-saving, as some are claiming, but cost-shifting,” Coleman told The Daily Caller. “If Arkansas gets to pay less for its Medicaid program, then reality says the federal government is going to have to pay more. And the fact is, Arkansans are going to have to pay for all of it. The federal government gets its money from the same place the Arkansas government does: the taxpayers. Arkansas taxpayers are still going to pay for it, they’re just going to pay for it through the federal government instead of the state government.”
Richard Caster, a conservative radio talk show host and chairman of the Ozark Tea Party, is helping lead the grassroots effort against the private option.
“The act sets up a state health care exchange, which is the first step to Obamacare,” said Caster. “We elected all these guys and girls on the basis of fighting Obamacare, and yet that’s exactly what we’re going to get. They just put a different name on it.
“This bill is projected to add $20 billion to the national debt over the next 10 years. We expected our legislature to create a more vibrant economy and get people off the welfare rolls, not expand the welfare state in Arkansas and add to the national debt.”