Gov. Mike Beebe talks to reporters Tuesday at the state Capitol. (John Lyon photo)
LITTLE ROCK — Gov. Mike Beebe told reporters Tuesday he now fully supports expanding Medicaid under the federal Affordable Care Act and will seek legislative support for it, though Republicans in the Legislature have signaled the governor may have a fight on his hands.
Beebe had said previously he was inclined to support the expansion of Medicaid to include people earning up 138 percent of the federal poverty level, but he wanted to know whether Arkansas would be able to opt out of the expansion if the state became unable to afford it. He said Tuesday that federal officials have told him the state would be able to opt out of the expanded coverage.
“I’m for it,” Beebe said. “I think it’s good for our people because it’s helping folks that don’t have insurance now that are out there working their tails off. They’re not just sitting on a couch somewhere just asking for something. They’re working, but they can’t afford $1,000 or $1,500 a month insurance for their families.
“It helps our hospitals and the rest of us that are paying insurance because it attacks the uncompensated care issue,” he said. “It obviously helps the people because they can get preventive care and get to a doctor quicker than waiting to go to the emergency room when they’re really bad off.”
Beebe acknowledged that appropriating money for the expansion will require a three-fourths vote in the Legislature, so legislative support is necessary “or it’s not going to happen anyway.”
The federal Centers for Medicare and Medicaid Services advised Beebe in a letter dated Aug. 31 that “if a state covers the expansion group, it may decide later to drop the coverage.”
Beebe said was satisfied by the response.
“I wanted to make sure we were the masters of our own fate,” he said.
President Obama’s Affordable Care Act originally required states to expand Medicaid or lose federal Medicaid funding, but the U.S. Supreme Court ruled that the government could not punish states for not complying by withholding money they currently receive, effectively making the expansion optional.
The federal government would pay 100 percent of the cost of the expansion for the first three years, after which the state would begin paying a portion that would gradually increase to a maximum of 10 percent.
The state Department of Human Services has estimated 250,000 people would be added to Arkansas’ Medicaid rolls under the expansion.
DHS officials have said that when factors such as an increase in the federal matching rate for the ARKids First children’s health insurance program, state income taxes on the increased federal Medicaid funding and a reduction in state spending on uncompensated care are taken into account, the expansion would save Arkansas $372 million over the first several years.
When the state’s share of the cost tops out at 10 percent, the annual net cost to the state would be $4 million, according to DHS.
Beebe said Tuesday that DHS’ estimate does not take into account the full economic stimulus likely to result from increased federal Medicaid money flowing into the state.
“Some (economists) say health care dollars turn over seven times in the community,” he said, adding that helping rural hospitals stay open also benefits the economy.
Beebe also noted that Arkansans will continue paying federal taxes with or without the expansion.
“Do I let Arkansans be left out when we’re paying our fair share?” he said.
The state Medicaid program is projected to see a budget shortfall of between $250 million and $400 million in the fiscal year that starts next July. Beebe said Tuesday that increased federal dollars coming into the state for the Medicaid expansion would help reduce, but not eliminate, the impact of the shortfall.
He also said the state’s plans to change the payment system for health care providers in the state should bring down Medicaid costs eventually, but even so “there’ll have to be some cuts.”
Republican legislators have expressed resistance to the Medicaid expansion. Republican House Caucus leader Bruce Westerman, R-Hot Springs, said Tuesday that now is not the time to commit to the expansion.
“If things change in Washington on the political scene, there’s the chance that there won’t even be any funding available for Medicaid expansion or the impetus to expand Medicaid anymore, so I think supporting the expansion before the election is certainly premature,” he said.
Republican legislators have made it a goal to win majorities in the state House and Senate this year.
Rep. Terry Rice, R-Mena, Republicans’ preference for the next House speaker, said Tuesday he wanted more information, such as the cost to the state if it opts out of the expansion and then back in, how mental health and pharmaceutical services would be affected and what the long-term liability to the state would be.
“I’m still gathering information and open-minded till I hear what all the facts are and what the costs are,” he said.
Westerman said he had concerns about expanding a program with a looming shortfall and was not comforted by the assurance that Arkansas could opt out of the expanded coverage later.
“I don’t think we can go back and tell a quarter of a million people, ‘Sorry, you no longer have these benefits,’” he said.