LITTLE ROCK, Ark. (AP) — The head of Arkansas' Department of Human Services said he doesn't have a backup budget if lawmakers block funding for the state's "private option," despite growing signs that the compromise Medicaid expansion plan is at risk when the Legislature convenes next month.
A Democratic lawmaker questioned the odds of the private option continuing after an opponent of it won a state Senate seat in a special election last week and a key supporter announced she no longer backed the plan. Lawmakers approved the private option last year as an alternative to expanding Medicaid's enrollment under the federal health care law.
"Since funding for the fiscal session is at best on life support, does your budget include the possibility of losing the (private option) during the fiscal session?" Sen. Linda Chesterfield, D-Little Rock, asked as DHS officials appeared before the Joint Budget Committee on Tuesday.
DHS Director John Selig said his department's budget is based on the notion that lawmakers will continue the private option when they convene Feb. 10 for a session focused primarily on the state's budget. Under the private option, Arkansas is using federal Medicaid money to purchase private insurance for thousands of low-income workers.
"We do not have a contingency budget," Selig said.
Prospects for renewing the private option — which will require 27 votes in the 35-member Senate and 75 votes in the 100-member House — have dimmed over the past week. Republican John Cooper won a northeast Arkansas Senate seat in a special election after vowing to block the expansion's funding. Republican Sen. Missy Irvin, who had been a key deciding vote for the private option, told conservative activists over the weekend that she no longer supports it.
"While opposed to further public dependence on government programs, I had been convinced that the private option might be a first step in the right direction," Irvin said in a statement released Monday to The Arkansas Project, a blog operated by a conservative group opposed to the private option. "I now see it is leading us in the wrong direction."
Irvin did not immediately return a call Tuesday.
The Senate approved the private option last year with 28 votes — just one more than was needed for its passage.
The private option sharply divided Republicans, who control both chambers of the Legislature. Backers of the private option said it gave the state a chance to overhaul its Medicaid program, while opponents said it was no different from the expansion envisioned under the federal health law.
More than 70,000 people have enrolled in the private option. Selig and state Medicaid Director Andy Allison said the state wouldn't face any penalties from the federal government if it discontinued the program.
"Essentially when this Legislature decides it want to defund the private option, the primary concern isn't with (Centers for Medicare and Medicaid Services) and the federal government," Allison said. "It's the impact and how quickly you want to actually remove that coverage from individuals who are covered and change the system here."
Democratic Gov. Mike Beebe's administration has said $89 million of his proposed budget for the coming year is based on savings the state expects from the private option reducing hospitals' uncompensated care costs. Beebe has warned lawmakers cuts would need to be made if the program isn't continued. Selig noted that the administration as a whole doesn't have a backup budget, and said he remained hopeful lawmakers would support the program.
"I think it's working exactly like the Legislature asked us to build it and enrollment is above where it should be," Selig told reporters. "I think it's hard to look at it and say, 'Here's something that's not working like we thought.'"
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