Montana examines ‘conservative’ option for more government-run health care

Andrew Collins
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May 13, 2014 2:35 AM
Montana examines ‘conservative’ option for more government-run health care
SteveBullock-Mug

BULLOCK: The governor wants to expand Medicaid in one shape or another.

By Andrew Collins | Watchdog.org

With the 2015 legislative session looming, state lawmakers and industry groups continue to discuss expanding government-run health care in Montana and have examined using a so-called “conservative” option to get there.

Critics charge, though, the plan isn’t conservative at all and may cause more problems for taxpayers than traditional expansion of the state’s Medicaid system.

So far, Montana’s Republican-controlled Legislature has balked at expanding Medicaid under Obamacare, arguing that while the federal government promises stable funding through 2019, uncertainty after that year gives them pause.

According to a recent report in The Missoulian, a coalition of health and business lobbies, state lawmakers and Democratic Gov. Steve Bullock’s office has gathered to revisit the proposal and learn whether Montana’s GOP-controlled Legislature can yet be persuaded to accept some form of expansion.

One possibility on the table: the so-called “private option,” a system created by Arkansas that uses Medicaid expansion funds to buy private health plans. Montana is among a handful of states studying the idea.

State Rep. Chuck Hunter, D-Helena, who invited Arkansas officials to Montana to discuss the plan, labeled the private option as “quite conservative.”

“One of my goals was to get Arkansas folks in here and show just how conservative a plan it really is,” he said.

Just how conservative is the private option, though?

One Medicaid expert, Josh Archambault, a senior fellow at the nonprofit Foundation for Government Accountability, scoffed at the idea the Arkansas model is anything close to conservative.

“The Arkansas private option model is not a conservative plan,” Archambault told Watchdog.org Wednesday. “Put simply, it is part of Obamacare’s Medicaid expansion. It uses Medicaid money, to pay for policies that look like Medicaid, and expands coverage to the same population as ‘regular’ Medicaid expansion.”

Archambault, busy fighting this idea in Idaho and Utah — other states eyeing the Arkansas model — believes the private option could mean bad things for taxpayers.

The main problem with Arkansas’ private option — and the key factor that distinguishes it from a “traditional” Obamacare Medicaid expansion — Archambault argued, is that state taxpayers are on the hook for all cost overruns. Already, he said, enrollment trends so far predict cost overruns in the tens of millions of dollars by the end of this year.

Cost is a huge concern of the private option. The Congressional Budget Office recently reported it will cost more than $9,000 per year per private option participant — about $3,000 more than the state’s tradition Medicaid enrollees.

The private option, he notes, actually gives the state little flexibility, putting most of the control in the hands of the federal government. For example, Arkansas was forced to cover people who were already buying private insurance, cost-sharing is either lower than Medicaid or nonexistent, and Arkansas isn’t allowed to roll back the expansion into the new population.

In short, Hunter’s “quite conservative” plan offers more spending and less state autonomy — not exactly a plan that will woo many Republicans.

While Arkansas leaders move forward with the plan and Montana lawmakers examine it, some legislators are speaking out, warning other states.

In an op-ed for Utah’s Deseret News on Tuesday, Arkansas state Sen. Bryan King, a Republican, voiced similar concerns, warning Utah, which is also considering expanding Medicaid, not to embrace a plan like Arkansas’ private option.

“Arkansas’ negotiations with the federal government made one thing clear,” King wrote, “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.”

Private option costs are already higher than anticipated, he added, citing a study that projected cost overruns from the expansion will cost Arkansas taxpayers between $6.6 million and $16.6 million.

Bullock, a huge fan of expansion in one form or another, may call a special session this year to address the issue, or he could wait until the 2015 Legislature convenes in January.

If Montana lawmakers decide to expand government-run health care, 70,000 residents would join the more than 100,000 enrollees already taking part in the program.

Archambault suggests they look elsewhere when considering Medicaid expansion and reform.

“The Arkansas plan is not right for the citizens of Montana as the Medicaid program is already strained for the most vulnerable, and state taxpayers are on the hook for any cost overruns under the private option,” he said.