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State Capitol Week in Review

Posted Monday, December 31, 2012, at 2:46 PM

LITTLE ROCK - When the 89th General Assembly convenes on Jan. 14, one of the most difficult questions facing the legislature will be whether to expand the Medicaid program.

The issue is complex and hundreds of millions in tax dollars are at play. Legislators with strongly held political beliefs have staked out positions on opposing sides of the issue. There are neither simple solutions nor easy compromises at hand. However, there are plenty of lawmakers who are willing to work long days and to give all competing interests an opportunity to be heard.

In the summer of 2012 the U.S. Supreme Court upheld most of the provisions of the federal health care reform law known as the Patient Protection and Affordable Care Act.

The Supreme Court ruling left up to the legislatures of the 50 states whether to expand Medicaid eligibility to include people whose incomes are below 133 percent of the federal poverty level.

In Arkansas, expansion would add about 250,000 adults to the number ofpeople now eligible for Medicaid services. Last year almost 780,000 Arkansans qualified for some type of Medicaid service.

Some legislators question whether the state can afford such a large expansion of Medicaid over the long run, and whether it would entail major growth in the size of government.

Support for expansion comes from many health care officials, who say that it would reduce the amount of unreimbursed care that physicians and hospitals must write off when they treat uninsured patients who cannot pay for treatment.

Complicating the issue of whether to expand Medicaid are three other related matters.

One is that Medicaid now faces potential budget shortfalls of as much as $400 million a year, according to Medicaid officials who say that medical services risk cutbacks without an infusion of new money.

Another complicating factor is that the governor and the Human Services Department, which administers Medicaid, are putting in place far-reaching changes in how Medicaid reimburses providers such as physicians, hospitals and long-term care facilities.

The changes have received national publicity. Arkansas Medicaid officials want to change from a fee-for-service model of paying doctors to a new system that pays a set amount for a single episode of care, such as treatment of a respiratory infection. One goal of the change is to eliminate duplication of services.

Finally, legislators are engaged in a spirited public debate over new health care exchanges, which are being established under the federal health care reform act. Everyone will be required to purchase health insurance by 2014, when states will have to set up health exchanges where consumers and small groups can compare insurance offerings and shop for coverage.

The state Insurance Department is working to create an exchange in Arkansas, and has chosen to open one in partnership with the federal government. About 211,000 Arkansans, many of them now without health insurance, are expected to sign up.

A legislative committee has voted in favor of the Insurance Department's plan, but on a split vote. The entire legislature can change that decision when the regular session convenes. As with all the other issues involving Medicaid and government regulated medical services, health care exchanges have created extended controversy at the state Capitol.

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Dave Wallace of Leachville serves as District 22 State Senator.
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