- Associated Press - Tuesday, April 5, 2016

LITTLE ROCK, Ark. (AP) - Arkansas Gov. Asa Hutchinson on Tuesday dropped his proposal to have private firms manage some services for the disabled and mentally ill, saying he’ll limit this week’s legislative session to his hybrid Medicaid expansion proposal.

The Republican governor formally called lawmakers back to the Capitol on Wednesday to take up his plan to keep and rework the hybrid expansion, which uses federal funds to purchase private insurance for the poor. Hutchinson dropped his managed care proposal at the urging of House and Senate leaders, who said they weren’t sure the plan had support.

“While we’re holding off on the legislation, the reform effort will continue,” Hutchinson told reporters.

Hutchinson had proposed contracting with private firms to manage Medicaid services for the developmentally disabled and mentally ill, a move he said would save the state money. He had pledged to use some of the projected savings from the plan to cut in half the state’s waiting list for home and community based services for the developmentally disabled.

The plan faced resistance from Democrats and some Republicans who said managed care would mean cuts in services by the private firms. A group of lawmakers opposed to the move had proposed a competing plan under which the state would hire private firms to coordinate care, but would continue paying Medicaid providers directly.

Supporters of the competing plan didn’t rule out trying to put their proposal, dubbed DiamondCare, before lawmakers this week.

“You have to achieve a balance between fiscal responsibility and savings without jeopardizing really valuable services that are needed for this very vulnerable population,” said Republican Sen. Missy Irvin.

Hutchinson said he didn’t have a timeline for trying again with his managed care proposal. The governor dropped the plan as he faces sharp divisions among fellow Republicans on his plan to keep the state’s hybrid expansion. Created three years ago as an alternative to expanding Medicaid under the federal health law, the program is providing subsidized coverage to more than 250,000 people.

Hutchinson has proposed renaming the program “Arkansas Works” and adding new restrictions, including charging premiums for some participants. Hutchinson said he’s focused now on getting the simple majority needed to approve his expansion proposal, but the budget bill keeping the program alive will require a three-fourths vote in both chambers in a separate session that starts next week.

“The policy decision has garnered broad support,” he said.

The top Republican in the Senate, who supports Arkansas Works, said there’s overwhelming support to pass the bill this week but supporters are one or two votes shy of the 27 needed in the 35-member Senate to pass the budget bill.

“We will press on and deal with that problem when it gets there, but whether we’re able to get across that hurdle or not is still to be determined,” Senate Majority Leader Jim Hendren said.

Opponents said Hutchinson’s decision to drop the managed care plan bolsters their argument that the state can’t afford the program once it has to start paying for a portion of the expanded coverage next year.

“There’s no doubt it makes the case stronger,” Republican Sen. Bart Hester said.

Democrats have been more unified than Republicans in supporting the expansion, but party leaders say they’re wary of any changes that could make it harder for those on the program to keep their coverage.

“We want to be supportive of Arkansas Works but as I’ve said, we don’t want to vote for policy that could be made better strictly out of fear of what could be worse,” said House Minority Leader Michael John Gray, a Democrat from Augusta.

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


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