- Associated Press - Saturday, March 11, 2017

LITTLE ROCK, Ark. (AP) - With fellow Republicans in control of the White House and Congress, Arkansas Gov. Asa Hutchinson is hoping to finally get the flexibility to scale back the hybrid Medicaid expansion he inherited that’s covering more than 300,000 of his low-income constituents. But his plans to move 60,000 people off the program and require many of them to work may face a future as uncertain as that of the federal health care law that enabled the expanded coverage.

Hutchinson last week unveiled his plans to limit the eligibility and add new restrictions to the state’s first-in-the-nation hybrid Medicaid expansion. Originally dubbed the “private option” and now rebranded as Arkansas Works, the program uses Medicaid funds to purchase private insurance for low-income residents. It was crafted as an alternative to the Medicaid expansion envisioned under the federal health law.

The proposals, which would need federal approval, were released hours before congressional Republicans introduced their long-awaited legislation to repeal and replace the 2010 law they’ve derided as Obamacare.

“I don’t think we can wait on the federal government,” Hutchinson said. “I think we need to continue our reforms now.”

Hutchinson’s proposal would lower the eligibility cap for the program from 138 percent of the federal poverty level to 100 percent, which he said would remove about 60,000 people. Hutchinson said they would be eligible for subsidies to buy coverage through the insurance marketplace under the federal health law. Hutchinson said the work restrictions would be similar to other programs, such as food stamps, which require non-disabled participants to be employed, undergo job training or volunteer. The program currently requires the state to refer beneficiaries to job placement and training programs, but they’re not required to participate.

The plan, which would take effect next year, leaves unclear what Arkansas is going to do if funding for the Medicaid expansion is lowered or eliminated. The congressional repeal proposal calls for ending the higher federal match for Medicaid expansion beneficiaries, starting in 2020, though some conservatives have pushed for that to take place as soon as next year. States can still continue to receive some enhanced federal payments, but only for expansion enrollees who were already covered before that. States will get a lower match for new enrollees.

Hutchison last week called the U.S. House GOP proposal “inadequate” for states like Arkansas, but said it should move forward so the Senate can address the concerns he and other governors have raised.

The future of the insurance marketplace is another key component. The subsidized plans in Arkansas’ hybrid Medicaid expansion are purchased through the marketplace, and that’s where Hutchinson’s proposal would shift tens of thousands of people if he wins approval to lower the eligibility cap.

The proposals, which Hutchinson plans to submit to the Trump administration by June, may help the Legislature avoid the same budget battle over the Medicaid expansion. Hutchinson managed to keep the program alive another year and add new restrictions through a complicated procedural move. Hutchinson and legislative leaders say they don’t expect a similar fight over the program’s reauthorization as they head into the final weeks of this year’s legislative session.

But it also sets up another special session that Hutchinson said he expects to call in May shortly after lawmakers formally adjourn this year’s session, and it could coincide with the bigger fight in Washington over the health care law. For now, Hutchinson said he wants to focus on changing the program as it stands today as the longer-term debate over health care goes on.

“It’s going to be a long process, and we need to assure the people of Arkansas and America that, don’t worry this year, it’s going to continue as it is,” Hutchinson said. “We want to get the waivers to reform it and have the cost savings in there, but it’s going to find Washington some time to find exactly the right replacement and my admonition is ‘Listen to the governors.’”

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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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