When Gov. Gary Herbert recently unveiled his “Healthy Utah” proposal, his staff likened the plan to Arkansas’ version of Medicaid expansion called the “Private Option.”
It’s a fair comparison to make. Healthy Utah and the Arkansas Private Option both expand government-funded health care to the Obamacare Medicaid expansion population. Both use Obamacare Medicaid dollars to subsidize the purchase of private insurance plans for these individuals. And both will require that those insurance plans be “Obamacare-approved,” in that they provide Medicaid-equivalent health coverage.
But the Arkansas Private Option has been an unmitigated disaster for our state. Utah’s Legislature would be wise to reject Healthy Utah or any plan that mirrors Arkansas’ version of Medicaid expansion.
In both Arkansas and Utah, supporters say their plans are a radical departure from Obamacare, or that somehow it’s “not Medicaid expansion.” But the saying “if it looks like a duck and quacks like a duck” has application here. The Healthy Utah Plan uses Medicaid expansion dollars to provide health care coverage to the Medicaid expansion population under the authority of Obamacare’s Medicaid expansion provision. That is Medicaid expansion, both in spirit and in substance. It is simply Medicaid expansion by another name.
We’ve heard these plans are Medicaid block grants that conservatives always wanted. In reality, however, the Arkansas Private Option and Healthy Utah are not block grants at all. They are open-ended, federal entitlements that require states to provide Obamacare Medicaid benefits to the Obamacare Medicaid population.
Indeed, Arkansas’ negotiations with the federal government made one thing clear — the bureaucrats in Washington hold all the cards and their main concern is implementing Obamacare, not empowering states with the flexibility required to deliver quality health care.
What’s worse, Arkansas’ Medicaid expansion is costing more than anyone had anticipated. Under our model, enrollees get to choose any Silver-level plan on the Obamacare exchange with no premiums, no deductibles, no co-insurance and limited co-pays.
This has caused Private Option costs to skyrocket beyond anyone’s expectations. We are already over expected costs by 10-15 percent. Just four months into our Medicaid expansion, Arkansas has exceeded its budget neutrality cap the federal government requires us to have.
We hear about how Medicaid expansion is practically “free” for states, but exceeding the budget neutrality agreement means Arkansas taxpayers could be on the hook for 100 percent of cost overruns. By one estimate, the cost overruns of the Private Option are projected to cost Arkansas taxpayers between $6.6 million and $16.6 million. As our balanced budget requirement forces us to devote more money to Medicaid expansion, it will mean less for education, infrastructure and public safety.
The unexpected costs to Arkansas taxpayers and the threats Medicaid expansion pose to other critical government services is likely to continue. The Private Option has tied the budgetary and taxpayer impact of Medicaid expansion to the cost of health insurance premiums, which the state does not control. And according to a recent survey from Morgan Stanley covered by Forbes, health insurance premiums “are showing the sharpest increases perhaps ever,” even with the supposedly cost-curbing provisions of Obamacare.
Arkansas made a grave mistake in trusting the Obama administration’s false promise of flexibility, and as a result many folks in our state are experiencing buyer’s remorse. I urge my legislative colleagues in Utah to avoid repeating Arkansas’ mistakes.
Sen. Bryan King represents the 5th District in the Arkansas Senate.
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