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Arkansas Senate approves "private option"

February 20, 2014

LITTLE ROCK, Ark. (AP) — The Arkansas Senate voted Thursday to continue the state's compromise Medicaid expansion plan, a move that supporters hope will end a stalemate in the House over the future of a program that is providing health coverage to more than 87,000 people.

The Senate voted 27-8 to reauthorize funding for the "private option" program that uses federal Medicaid funds to purchase private insurance for low-income residents. Arkansas was the first state to win approval for such a plan as an alternative to expanding Medicaid under the federal health law.

The measure needed at least 27 votes in the 35-member Senate.

With the vote, attention turned to the state House as it prepared to vote again on the program's future. The private option funding bill has failed to win the 75 votes needed in the 100-member House, and the chamber planned to vote again Thursday afternoon.

If the House approves its funding measure, the program still faces one more vote before one of the chambers before it heads to the governor's desk.

The plan has sharply divided Republicans, who control the Legislature and have made major gains in Arkansas over the past two elections by running against President Barack Obama's health care law. Republican supporters of the private option have said the private market can administer the benefits more efficiently than Medicaid, which they consider bloated.

"We saw this as a mechanism, a backstop against many of the negative elements in the Affordable Care Act," said Sen. David Sanders, R-Little Rock, one of the architects of the private option law. "We didn't put us in this mess, but certainly I feel we have an obligation to do what's best for our state and advance a policy that may have long-term implications not just for Arkansas, but the country."

GOP opponents have said the program is an embrace of the federal law they've derided as Obamacare, and said the state can't afford the eventual cost when it'll be required to eventually chip in 10 percent of the cost of the expansion.

"I think this is one of the worst socioeconomic policies in the history of our state that we will live to regret," Sen. Alan Clark, R- Lonsdale, told colleagues before the vote.

National health policy experts say Arkansas' compromise opened the door for other Republican-leaning states to consider similar models. Other states exploring or pursuing similar ideas include Pennsylvania, Iowa and Virginia.

Democratic Gov. Mike Beebe has said rejecting the $915 million in federal funds for the private option would jeopardize other state services. Beebe's proposed $5 billion budget relies on $89 million in savings he says the private option will create by cutting down on hospitals' uncompensated care costs.

Prospects had dimmed for the private option in the Senate last month after an opponent of the program won a special election and a former supporter of the program announced she would vote against it. But supporters secured the deciding vote after Republican Sen. Jane English, who voted against the private option, said she'd back the funding bill in exchange to changes to the state's workforce training program.

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