Medicaid plan in Arkansas at risk

LITTLE ROCK, Ark. -- Arkansas' plan for expanding Medicaid by buying private insurance policies for the poor instead of adding them to the rolls was heralded as a model for convincing more Republican-leaning states to adopt a key part of President Barack Obama's health-care overhaul.

But as Republican lawmakers face elections and step up attacks on what they deride as Obamacare, the state that pioneered the private option is on the brink of abandoning it. The plan has lost two supporters in the Senate, leaving backers worried they won't have enough votes to keep it alive after the Legislature convenes Monday.

Rejecting the program could jeopardize the state's budget and reverberate through other states considering similar options for expanding Medicaid. 

 "The ramifications are way beyond Medicaid and they're way beyond the people who would now go uncovered and they're way beyond the hospitals that would be severely impacted," Gov. Mike Beebe, a Democrat, said. "The ramifications are huge, and the Legislature will have to figure that out."

Barely approved by the Republican-led Legislature last year, Arkansas' plan uses federal money to buy private insurance for those newly eligible under the health-care law. Republicans believed private insurers would administer the benefits more efficiently than Medicaid, which they consider bloated. Republicans also saw it as a step toward finding more options around Medicaid. 

 "Prior to Arkansas you had two options: Expand Medicaid or don't," said Matt Salo, executive director of the National Association of Medicaid Directors. "With Arkansas going to the table, other states saw there's now a third option." 

More than 83,000 people signed up and now have coverage through Arkansas' plan. Thousands more are expected to enroll.

Other states have pursued similar compromises, with Iowa receiving federal approval for an expansion modeled in part on Arkansas and Pennsylvania exploring a similar plan. Utah Gov. Gary Herbert, a Republican, wants to expand Medicaid and is considering Arkansas' approach. Overall, 26 states have agreed to expand Medicaid while the rest, mostly Republican-ruled, have not.

In winning approval, Beebe compared the expansion to federal highway funding, saying Arkansas taxpayers help pay for it, so they should benefit.

But the takeover of a vacant state Senate seat by a Republican who vowed to kill the private option and a reversal by a former Republican supporter have threatened the thin margin of support.

Lori Latch, 35, said she was looking forward to having health insurance for the first time since she was a teenager. She and her husband, who is self-employed, have racked up more than $5,000 in bills for emergency room visits.

"Financially, hopefully it's going to mean that we're not going to be in debt anymore," said Latch, 35. "I can't get a car or anything because of medical bills."

Health experts are watching to see whether Arkansas' decision affects other states weighing a similar expansion.

"I do think it would have national repercussions if it were defunded," said Joan Alker, executive director of Georgetown University's Center for Children and Families. "I think a lot of it will come down to the perception why it happened and we'll just have to see how it plays out."

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