On August 19, 2015 Governor Asa Hutchinson presented a plan of seven elements for revising and keeping Obamacare Medicaid Expansion in Arkansas. While the speech was disappointing to opponents of Obamacare Medicaid Expansion, the speech included an interesting aside about Arkansas’ planned state-based Obamacare Exchange:
If you look at the seven elements of my plan, none of those seven elements require a 1332 waiver. All of those seven elements can be enacted with section 1115 waivers. That means that we don’t have to have the sophistication of a state-run exchange. Right now we’re building a state-run exchange with a $99 million grant from the federal government. And I am asking the question why are we building a state exchange rather than relying upon the continued partnership with the federal exchange? The answer that I get is that we need room for innovation. The innovations that I outlined are section 1115 waivers, flexibility, work requirements, referrals, some very innovative ideas. They can be done in the federal marketplace, in the federal exchange that we are partnering with right now.
Governor Hutchinson inherited a 2013 law providing for the adoption of a state-based Obamacare insurance exchange. Much work had already been done on the exchange prior to him taking office.
During the 2015 regular session Representative Mary Bentley (R) filed HB1492 to repeal the 2013 law. State-based Obamacare Exchanges have been very unpopular in other states. Only a few states adopted one and some states have already repealed their state exchange. Some of the few states with an exchange are having difficulty containing costs and are looking for more state funds to keep the program going.
Arkansas leadership did not support Rep. Bentley’s bill. Instead the legislature adopted Act 398 of 2015 which allowed the continued development of the state-based exchange. Yes, Act 398 had a title that said it would prohibit a state-based exchange, but that is not what it did. (Page 3, lines 7-13 allowed the continued work and implementation to stay on track without the need of further legislative action.)
When Act 398 was passed, fiscal conservatives were left scratching their heads wondering why state leaders wanted to risk state dollars, especially when the same Obamacare insurance was already available on the federal exchange. There was much talk about adopting an exchange with the idea that Arkansas would be able to do a better and cheaper job than the federal government, but that didn’t add up. One thought that kept being mentioned as a possible reason for leadership to want a state-based Obamacare Exchange, was that somehow the Exchange would help protect Arkansas’ Obamacare Medicaid Expansion. Governor Hutchinson’s speech seems to lend some support to that idea.
Governor Hutchinson said when he would ask why Arkansas needs an Exchange the answer he always got was “we need room for innovation” but he realized innovation can already be done with Section 1115 waivers. (A waiver 1115 is federal permission to try a little bit different ways of handling some aspects of Medicare or Obamacare Medicaid Expansion.) In the context of the Governor’s speech it appears he is referring to tweaks to Obamacare Medicaid Expansion in order to keep Arkansas an Obamacare state.
We disagree with Governor Hutchinson’s goal of keeping Obamacare Medicaid Expansion, but we are appreciative of his reevaluating and questioning whether we need the risky Arkansas-based Obamacare Exchange. We hope there soon will be an agreement to end work on the Arkansas-based Obamacare Exchange and end its continuing expenditure of our money as federal taxpayers. Representative Bentley’s bill would have already stopped work on the exchange and would have stopped the expenditure of our money on the risky program.
Governor Hutchinson’s full speech may be read here.