- Associated Press - Wednesday, August 19, 2015

LITTLE ROCK, Ark. (AP) - Arkansas Gov. Asa Hutchinson supports keeping the state’s first-in-the-nation hybrid Medicaid expansion, he said Wednesday, but only if the federal government provides the state with more flexibility to impose limits on the program.

The Republican governor detailed several changes he wants a legislative task force to look at as it weighs the future of the “private option” Medicaid expansion, which provides coverage to more than 200,000 Arkansas residents. Crafted as an alternative to the expansion envisioned under the federal health law, the program uses federal funds to purchase private insurance for the poor.

“I will accept the continued expansion dollars from the federal government if we can achieve the (federal waivers) that are needed,” Hutchinson said. “These are the requirements that we need to accomplish our objectives, reinforce our values and to afford our future. Business as usual is not acceptable.”

Most of the changes Hutchinson detailed would require federal approval. Among them, he wants to require workforce training for some beneficiaries and limit working individuals’ access to the subsidized insurance by tying it to a certain income level. Those who don’t reach that level would be eligible for traditional Medicaid.

He also proposed requiring that people on the private option instead sign up for their employer’s sponsored health plans if available, with the program paying for deductibles and copays on the employer-sponsored plan.

Another idea of Hutchinson’s is to have some people using the private option to pay a portion of their premium. He also proposed the state cut more than $50 million from Medicaid annually, including the private option, to help prepare for the costs of the expansion when the state must pay for a portion by the end of 2016.

Hutchinson said the state should end coverage of non-emergency medical transportation for those on the program, and pursue a “global waiver” that would give Arkansas more flexibility in how it uses Medicaid money.

The private option has sharply divided Republicans who control the Legislature, with opponents calling it an endorsement of the federal health law they regularly deride as “Obamacare.”

Lawmakers earlier this year voted to continue the program another year, and formed the task force to look at its future. Hutchinson had urged them to keep it alive until the state is required to pay for part of the expansion - 5 percent in 2017 and 10 percent by 2020.

The state Hospital Association has credited the program for a $149 million drop in uncompensated care costs last year.

Hutchinson noted the expansion has meant more than $1.4 billion in additional federal health care spending in the state.

“If we ended the Medicaid expansion and refused to accept those federal dollars then that is a lot of money… being pulled out of our health care system in this state,” he said.

The co-chairman of the task force said he wanted to take a further look at the governor’s ideas and the possible financial impact.

“I think it moves us on down the road in starting to put together a plan,” said Republican Sen. Jim Hendren, who is also the governor’s nephew. “Now we have to see if it’s a plan that can get (lawmaker) support, and whether it’s a plan the federal government would accept.”

Thirty states and the District of Columbia have agreed to expand Medicaid under the health care law since the U.S. Supreme Court ruled in 2012 that the decision was up to states and not mandatory.

Hutchinson also questioned whether the state needs to move forward with establishing its own insurance marketplace under the federal health law, saying it may not be necessary if the government receives approval for the changes he’s seeking.

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


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