'Arkansas Works' Model May Appeal To Washington Republicans Looking For A Compromise

Dec 9, 2016

Gov. Asa Hutchinson speaks to reporters about federal waivers for Arkansas Works.
Credit Michael Hibblen / KUAR

Arkansas Gov. Asa Hutchinson says he’s secured federal approval to keep the state’s public/private healthcare partnership, renamed “Arkansas Works," but a debate on repealing the Affordable Care Act continues at the federal level, and Arkansas’s budget remains deeply dependent on federal money from “Obamacare.”

In 2014 Hutchinson was elected on a promise to dismantle the state’s Obamacare model. This week he traveled to Washington for federal approval to keep and tweak it.

"We made it clear we’ll be seeking some additional flexibilities and waivers for the state,” Hutchinson said at a press conference Wednesday.

Arkansas is the only Southern state that has expanded Medicaid through the Affordable Care Act. It's seen the greatest drop in the number of uninsured residents in the country.

More than 300,000 are enrolled in the state’s private option, which requires federal dollars to put people on private insurance plans rather than in Medicaid.

A consultant for the state, the Stephen Group, says Arkansas Works will save or bring to the state $438 million dollars in the next five years.

Those funds are now integral to the state’s overall budget, Marquita Little of Arkansas Advocates for Children and Families says.

By bringing in and accepting those additional federal dollars, we are seeing huge savings in our state budget. We are seeing huge benefits to the local economy. We are seeing huge benefits to our healthcare system."

Governor Hutchinson is hoping the new administration of Donald Trump will continue Medicaid expansion, despite the fact that Trump, like Hutchinson, campaigned on a vow to repeal health insurance expansions over the last seven years. Hutchinson is asking that the money arrive at the capitol as block grants. 

“If you give us the federal dollars right now for the Medicaid program and give us the flexibility to administer it, then we will be able to keep the Medicaid expansion with more constraints, and more cost sharing, with more requirements. And the impact of that will be that it will control the numbers better.”

Whatever its shortcomings, Arkansas policy experts suspect Arkansas's public health care system may serve as a model for Republicans federally, many of whom have voted to repeal Obamacare dozens of times in the since 2011, when the GOP regained control of the House of Representatives.

Joe Thompson, president of the Arkansas Center for Health Improvement says the state’s unique public-private model could be applied broadly.

“Whether it’s insurance coverage, or premium increases, or the number of carriers we have in the market with respect to the competitiveness of our insurance marketplace, Arkansas uniquely stands out from all other states.”

There’s evidence Arkansas’s model is a success. Jodiane Tritt, with the Arkansas Hospital Association says the changes created by Arkansas’s "private option" kept the doors open at the state’s hospitals, which used to eat the cost for patients who couldn’t pay.

Hospitals "emergency department uncompensated care decreased by 38.8 percent, the in-patient uncompensated care decreased by 48.7 percent, and the outpatient uncompensated care decreased by 45.7 percent.”

If the Affordable Care Act is dropped in D.C. as Congressional leadership and the president-elect have vowed to do, then, says Thompson, the Arkansas General Assembly will really have to make some tough budgetary cuts.   

Our legislative body would be forced to address some of the budget shortfalls caused by that, and it would be a pretty major effort to find solutions in the budgetary process.”

That’s what Hutchinson is trying to avoid and his preferred solution is Medicaid block grants that allow more state control. Little, with Arkansas Advocates, says block grants come with disadvantages.    

“A block grant is a reduction in funding. It’s a cut. And those types of changes could have real consequences in terms of just lives that are covered and have access to certain benefits.”

For now, Arkansas Works will remain as is for the foreseeable future — even as everyone hangs onto their hats.