Ark. governor supporting expansion of Medicaid

Associated Press Modified: September 11, 2012 at 4:49 pm •  Published: September 11, 2012

LITTLE ROCK, Ark. (AP) — Gov. Mike Beebe said Tuesday he supports expanding Medicaid eligibility in Arkansas under the federal health care law after officials assured him the state could later opt out, setting up a potentially heated fight with Republican lawmakers as they try to win control of the state Legislature.

Beebe, a Democrat who had said he was inclined to support the expansion, said he decided to back it after receiving those assurances in writing from the federal government. Beebe noted that the expansion will still require support from state lawmakers next year.

"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 working their tails off. They're not sitting on a couch somewhere asking for something."

The U.S. Supreme Court in June upheld the health care law, but justices said the federal government could not take away states' existing federal Medicaid dollars if states refused to widen eligibility. Under the health care law, the federal government agreed to pay the full tab for the Medicaid expansion when it begins in 2014. After three years, states must pay a gradually increasing share that tops out at 10 percent of the cost. Human Services officials said the net cost to the state would reach about $4 million in 2021.

Beebe said he first wanted answers from the federal government on how much flexibility Arkansas would have and whether the state would be locked in to the expansion even if it faces financial problems later. The state Department of Human Services has said expanding Medicaid's eligibility would add 250,000 Arkansas residents to the program.

The federal Centers for Medicare and Medicaid Services told Beebe in an Aug. 31 letter that states that opt for the expansion could later choose to drop the coverage.

"I wanted to make sure we were the masters of our own fate," Beebe said.

Beebe's announcement wasn't much of a surprise, since he and state officials have been touting the expansion's benefits to the state.

The department has said that the expansion would save the state $372 million over the next several years. The agency's estimates factor in savings that they say would result from the federal health care law.

For example, they estimate that between 2014 and 2021 the state will save $359 million in spending on uncompensated care at hospitals and will see $254 million in state tax revenue connected to the additional health care spending in the state. Before the savings are factored in, the state's new Medicaid expenditures would be $684 million, the department said.

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