LITTLE ROCK, Ark. (AP) — Gov. Mike Beebe said Tuesday that the federal government has agreed to a new Medicaid expansion deal that would allow about 250,000 low-income people in Arkansas to receive federal subsidies to purchase private insurance through an exchange.
Beebe, a Democrat, has been proposing that Arkansas expand its Medicaid program under the federal health care law but has faced opposition from Republican lawmakers. He announced the new option Tuesday after meeting with lawmakers to update them on his discussions with federal officials last week in Washington.
"Basically, they've agreed to give us about everything we asked for," Beebe told reporters Tuesday.
Under the proposal, low-income citizens — those who are making up to 138 percent of the poverty line, which amounts to $15,415 per year — would receive federal Medicaid dollars to purchase private insurance. The subsidies would cover the cost of the private insurance premiums, but the state would have the flexibility to impose co-pays and other charges.
The federal government would pay the full cost of the health care expansion for the first three years, after which point the state's portion will begin to gradually increase to 10 percent of the cost.
Because private insurers would likely charge more than the state would pay for coverage under Medicaid, the new option might end up costing the federal government, and ultimately Arkansas, more than the traditional expansion of the state's Medicaid program, Beebe said. But the federal government will allow a "sunset" provision in the deal, he said, meaning the Legislature would have the option of changing the deal before the state would be responsible for any costs.
Three-fourths of the Republican-controlled House and Senate would need to approve of any Medicaid expansion.
"I'm not going to weigh in on whether I prefer to do it the straight Medicaid way or do it this way," Beebe said. "My main objective is to make this Legislature as comfortable as I can make them."
Legislative leaders said they were encouraged by the new option available to the state, but said additional discussion was needed on how to proceed with Medicaid.
House Speaker Davy Carter, R-Cabot, said the concept of expanding health care through private insurers rather than the state's Medicaid program would likely be more palatable to lawmakers, many of whom campaigned against the federal health care law. He called the new option "a move in the right direction."
"This is a 180-degree turn from what we thought were the options just a few weeks ago," Carter said. "We've gone from a full expansion of Medicaid as the only option now to having some private pay policies purchased through the health care exchange."
Senate President Michael Lamoureux, R-Russellville, said it was too early to judge lawmakers' support for the new Medicaid option but said he was encouraged by the proposal.
"If they came back and said there's no flexibility, that would definitely have ended the conversation," Lamoureux said.