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Ark. governor supporting expansion of Medicaid

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.
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.

"Do I let Arkansans be left out when we're paying our fair share and all these other states are not being left out? I don't think that's right," Beebe said.

Beebe faces resistance to the expansion from Republicans, who are trying to win control of the state Legislature for the first time since Reconstruction. GOP leaders have expressed skepticism about the state's estimates on savings from the Medicaid growth.

The decision guarantees that Medicaid will dominate the agenda at next year's session, no matter who wins the Legislature. The state already is expected to face a shortfall of up to $400 million in the program starting July 1, 2013. Beebe said the expansion will help a little with the shortfall, but won't completely solve it.

Appropriating money for the expansion will require a three-fourths majority in both chambers. Predicting a closely divided state House and Senate, Beebe said that he'll need to win Republican lawmakers' support even if his party maintains control of the Legislature.

"Nobody's going to have a super-majority, and it takes a supermajority to appropriate money for Medicaid," Beebe said. "So it's not going to be any harder or any easier one way or the other, regardless of who has the majority."

Democratic Sen. Larry Teague, who will be Senate president next year if his party remains the majority in that chamber, said he was undecided on whether to support the expansion and said he wants to know more about the cost to the state.

"Every time I read something, I get a new question," Teague said. "I'm just trying to make sure I understand all the ramifications of it."

Rep. Bruce Westerman, the top Republican in the House, said he doubted Beebe could win even a simple majority of votes in the majority-Democrat Legislature right now. Westerman, R-Hot Springs, said his concerns about the cost of expansion weren't eased by the federal assurances that the state could opt out.

"How can you put 250,000 people on a program and then turn around and kick them off?" Westerman said. "In reality, that doesn't happen with government programs."

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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