- Associated Press - Thursday, October 29, 2015

LITTLE ROCK, Ark. (AP) - Gov. Asa Hutchinson is dropping two of his proposals to limit benefits in Arkansas’ hybrid Medicaid expansion and must notify the federal government by year’s end of the changes the state is seeking, the Republican told lawmakers in a letter released Thursday.

Hutchinson told a legislative task force that he wants to rename the state’s hybrid expansion to “Arkansas Works” if the federal government approves the changes he wants. The program, currently called the “private option,” uses federal funds to purchase private insurance for the poor and was crafted as an alternative to expanding Medicaid under the federal health law.

“With your support, I will fight for the strongest waiver application possible, one that will promote work while protecting vulnerable populations,” Hutchinson wrote in the letter, dated Tuesday.

Hutchinson in August told lawmakers he supports keeping the hybrid expansion if the government allows the state to impose new limits on benefits and eligibility.

In the letter sent this week, he said he was dropping the proposal to move some beneficiaries off the subsidized coverage and on to traditional Medicaid. “While this proposal was designed to encourage and reward work, I am convinced that it would be difficult to administer and the impact on premium payments is uncertain,” Hutchinson wrote.

He also will drop a proposal to eliminate coverage of non-emergency transportation.

The letter was a response to recommendations to keep the private option but make several changes from The Stephen Group, which the Legislature hired to look at the private option and Medicaid. Hutchinson said lawmakers should consider the recommendation to hire a private company to manage some Medicaid programs, but only for high-cost populations.

The Legislature formed the task force earlier this year at the governor’s request. The panel will issue recommendations in December, and the co-chairman said Hutchinson’s letter helps the panel.

“Overall, I think we’re really circling around what appears to be a strong path forward,” said Republican Rep. Charlie Collins.

If some of his changes aren’t approved by the federal government, Hutchinson said, he’ll ask for additional flexibility from the next president.

The conservative group Americans for Prosperity said it was disappointed with Hutchinson’s letter, noting he and the majority-Republican Legislature were elected after campaigning against the federal health law.

“By asking the Legislature to pursue another waiver from (the federal government), Governor Hutchinson has shown he has no interest in ending Arkansas’s Medicaid expansion under Obamacare,” state director David Ray said in an email. “While we applaud the governor for the modest cost-saving reforms, the program is simply fiscally unsustainable and will lead to future budget deficits that will require every other agency, from education to public safety, to suffer.”

Hutchinson’s office said the health care landscape was changed this year when the U.S. Supreme Court upheld the insurance subsidies offered in all 50 states.

“Anyone who has carefully reviewed our state budget recognizes that the path Governor Hutchinson outlined is nothing but responsible,” spokesman J.R. Davis wrote in an email. “There should be no surprises in the governor’s letter … He is essentially agreeing with the Legislature’s chosen consultant on their Medicaid findings.”

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

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