- Associated Press - Saturday, December 12, 2015

LITTLE ROCK, Ark. (AP) - With the clock ticking, Arkansas lawmakers are preparing to draw the battle lines over the future of a hybrid Medicaid expansion that has sharply divided them since its inception nearly four years ago.

But the recommendations coming this week on the future of the expanded coverage may not create the consensus Gov. Asa Hutchinson hoped for when he sought more time to come up with a solution to the thorny issue.

The Health Reform Legislative Task Force will kick off three days of hearings Tuesday where it’s expected to finalize its recommendations on the future of Arkansas’ “private option,” which uses federal funds to purchase private insurance for the poor. The panel is also expected to recommend other changes to the state’s Medicaid program, including how to achieve the $50 million to $60 million in savings Hutchinson says he wants to see if Arkansas keeps the expanded coverage.

Based on recommendations from Hutchinson and an outside consultant hired by the Legislature, it’s clear the panel is inching toward a plan to keep the expanded coverage under the federal health law - but with changes aimed at winning over skeptical Republicans.

Hutchinson, a Republican who regularly derided the federal health law during his bid for governor last year, has proposed adding new restrictions to the program and renaming it “Arkansas Works.” The restrictions include a limit on assets, a lifetime cap on benefits for some and provisions allowing the state to end coverage for those who don’t pay their premiums.



“Please understand very carefully that on Dec. 31, 2016, the private option ends,” Hutchinson told a group of Medicaid providers last week. “The private option ends.”

The panel’s also looking at broader changes to Medicaid, including a proposal to move some of the program’s management to a private company. Hutchinson has backed the idea of using managed care for some higher-cost populations.

No matter what plan is backed by the task force, its first test will come early next year as Hutchinson pitches the ideas to the Obama administration. Hutchinson says he plans to meet in January with U.S. Health and Human Services Secretary Sylvia Burwell in Washington about the state’s proposed changes.

He acknowledges that many of the restrictions he’s seeking face an uphill battle with the administration, particularly his call for an asset test for some on the expanded coverage.

“This administration has historically resisted that type of asset testing and they very well will continue to do so, but I think it needs to be on the table as a point of discussion now and then perhaps something we would revisit with the next administration as well,” Hutchinson said.

The bigger obstacle will likely be the Legislature, where Medicaid expansion has turned into an annual fight among Republicans who control the House and Senate and who became the majority party in the state by running against the federal health overhaul. Hutchinson says he’ll decide early next year when to call a special session on the expansion, and hasn’t said whether it’ll be held before a March 1 primary where dozens of legislative races are likely to be dominated by the issue.

The challenge Hutchinson faces in selling this plan was clear almost immediately after his speech calling for additional restrictions last week. Supporters of the private option said they oppose the new limits Hutchinson is pitching, such as an asset test.

Marquita Little, health policy director for Arkansas Advocates for Children and Families, said asset restrictions could harm someone who is living in a family home but isn’t earning enough money to pay for insurance.

“I don’t think we want to set up a system where people are eliminating or getting rid of assets in order to have their health care,” she said.

But Hutchinson also faces resistance from the right, with conservative groups such as Americans for Prosperity saying they won’t be satisfied with anything short of the expansion’s end.

“These measures would provide marginal safeguards for taxpayers if the Obama administration approved to these requests, but at the end of the day, there is no way to transform a welfare program for able-bodied, childless, working-aged adults into a ‘conservative’ plan,” David Ray, AFP’s state director, said.

The responses show that even if the private option’s name ends with the task force’s recommendations this week, the political fight over Medicaid expansion will continue to linger.

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Andrew DeMillo has covered Arkansas government and politics for The Associated Press since 2005. Follow him on Twitter at www.twitter.com/ademillo

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