The fifth time was the charm for Private Option proponents in Arkansas. Senate Bill 111, an appropriation bill for the Department of Human Services containing funding for the Arkansas Private Option – essentially Medicaid Expansion under a different name – passed 76 to 24. Previously, proponents – including the Republican Speaker Davy Carter – had only been able to muster 73 of the 75 votes required. On Tuesday, three “no” votes flipped to “yes.”
Arkansas State Representatives Les “Skip” Carnine (R – Rogers), Mary Slinkard (R – Gravette) and Kim Hammer (R – Benton), under considerable pressure from Speaker Carter, flipped from NO to YES on funding the Private Option. Rep. Hammer, specifically, justified his switch saying that if the program fails to meet expectations, he would be a NO vote next January when the Private Option again will require a new appropriation.
Unfortunately, the Private Option is already failing to meet the basic expectations and standards laid out when some Republicans joined with Democrats to pass the new entitlement last year. Writing at The Arkansas Project, Representative Joe Farrer notes that, “When we passed the Private Option Medicaid expansion last year, we did so under the explicit promise that the state taxpayer would bear no costs of the Medicaid expansion for at least the first three years.” Farrer goes on to explain that, “The Obama administration capped federal Private Option funding with per-person monthly caps for each of the next three years. State taxpayers are on the hook for costs that exceed these federal caps, to be repaid at the end of the 3-year waiver window… In the second month of the Private Option, we are already exceeding those federal caps and the state taxpayer will pay $6 to $18 million in 2014 alone as a result.”
Only two months in and already Arkansas taxpayers are on the hook for additional funding of the state’s Medicaid Expansion. Legislators said it wouldn’t happen for three years.
Writing in The Federalist in mid-February, I pointed out the dangerous fact that Members of Congress are already hesitant to guarantee the 90-10 Federal match after three years for states that have expanded Medicaid. Even the liberal Democrat Governor of California, Jerry Brown, is betting on the Federal government reducing the 90-10 Medicaid match. Yet, legislators in Little Rock seem oblivious to the iceberg that is about to rip a hole in the hull of the Arkansas budget. By 2023 the Arkansas Department of Human Services estimates that Medicaid – under the Private Option – will cost nearly $400 million per-year. If the Federal match is drastically reduced, Arkansas taxpayers will be faced with either crushing tax increases or draconian reductions in other state services to fund the Private Option – take your pick.
In Washington, D.C., the Obama Administration has already tacitly acknowledged that Obamacare has become unwieldy with the use of executive orders to delay countless provisions and mandates found in the law. Yet, Arkansas lawmakers – including the entire Democrat caucus – saw fit to put the-pedal-to-the-metal on funding the Private Option.
The Arkansas Gang of Three saw fit to deal Arkansas Taxpayers a bad hand in a game of cards where more-often-than-not the house wins and taxpayers lose.
William Upton is State Affairs Manager at Americans for Tax Reform.