- Associated Press - Monday, February 10, 2014

LITTLE ROCK, Ark. (AP) - Arkansas lawmakers opened a legislative session focused primarily on the budget Monday, with uncertainty surrounding the future of the state’s compromise plan to expand Medicaid under the federal health care law.

The House and Senate convened for its third-ever fiscal session under a constitutional amendment voters approved in 2008 requiring the Legislature to meet and budget annually.

Legislative leaders were gearing up for a renewed fight over the “private option” that was approved last year as an alternative to the Medicaid expansion called for under the federal health overhaul. Under the program, Arkansas has signed up more than 87,000 low-income residents for private insurance paid for with federal Medicaid funds.

After losing two key votes in the Senate, the plan is in jeopardy of being defunded by the Republican-controlled Legislature. Senate President Michael Lamoureux said there aren’t enough votes yet to keep the program alive, but was lobbying a handful of lawmakers opposed to the measure to keep it funded and delay the fight over the program until next year’s regular session.

“I personally don’t think this is the best way to fight policy disagreement out in budget fights,” Lamoureux, R-Russellville, told reporters.

The expansion will need at least 27 votes in the 35-member Senate and 75 votes in the 100-member House to continue. Lamoureux and Speaker Davy Carter said they expected a vote on the program to come as early as next week.

“Until we get that resolved, it’s going to be entirely hard, if not impossible, to set the budget,” Carter, R-Cabot, told reporters. “And if for some reason that the support isn’t there, we’re going to have to start from scratch.”

Winning over opponents of the private option will be a challenge, especially as Republicans near an election where they plan to continue touting their opposition to the health care law that spawned the program. The private option had sharply divided Republicans in the Legislature last year, who had won control of the House and Senate in the 2012 election.

One opponent said he’d keep an open mind, but had seen little to convince him to support the program’s funding.

“While all of us would love to give insurance to as many people as possible, at some point you’ve got to stop spending money you don’t have,” said Sen. Jim Hendren, R-Gravette.

Republican opponents of the private option on Monday hoped to undermine a key argument in favor of the expansion with a proposal to give state tax credits to businesses penalized under the health law for not providing coverage to employees. Private option supporters have said the expanded coverage helps businesses avoid those penalties.

The House Rules Committee, however, tabled the tax credit proposal over objections that it didn’t belong in the fiscal session.

National health policy experts say Arkansas’ plan opened the door for other Republican-leaning states to find a compromise on the Medicaid expansion. 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.

Democratic Gov. Mike Beebe has warned that rejecting the plan could jeopardize other parts of his proposed $5 billion budget, which relies on $89 million in savings the state is projected to see from the expanded coverage cutting down on hospitals’ uncompensated care costs.

A Republican lawmaker who helped craft the expansion compromise said supporters can now explain how the program’s been implemented and the interest other states have shown in Arkansas’ model.

“I think we’re at a fundamentally different place in terms of the policy, and when it’s all about the policy, it matters,” said Sen. David Sanders, R-Little Rock.

The slimmed-down fiscal sessions are held in even-numbered years and focus on budget matters. The session cannot last more than 30 days, unless three-fourths of the House and Senate vote to expand it to 45 days.

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Associated Press writer Christina Huynh contributed to this report.

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Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo .

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