Private Option’s Hospital Scare


private optoin hospital scareThe fright of this Halloween season is the voice of Democrat candidates howling “If the [Obamacare] Private Option is repealed our hospitals will be put out of business.

This scare tactic is supposed to make people vote for liberals for fear of losing their hospitals.



Folks, you need to know:

  1. Obamacare is not the solution to the problem faced by hospitals. Obamacare is the hospitals problem.
  2. The Obamacare Private Option is no solution at all because it will ruin Arkansas’ budget.


Obamacare cut an estimated at $716 billion from Medicare to help fund Obamacare!  This has a huge impact on our hospitals because they rely heavily on providing services to patients covered by Medicare.  (Medicare serves our elderly and many permanently disabled citizens. Medicare is funded by taxes you pay for that purpose.)

What are Arkansas hospitals saying about Obamacare raiding Medicare funds?

Arkansas Hospital Association Chief Executive Officer Bo Ryall estimated that Arkansas hospitals will lose $2.5 billion in Medicare funding over the next 10 years.

Ray Montgomery, the chief executive officer of White County Medical Center in Searcy, estimated his hospital would see a reduction in Medicare reimbursement of $66 million in the next 10 years.

Ron Peterson Chief Executive Officer of Baxter County Regional Medical Center in Mountain Home estimated that the hospital would see Medicare reimbursement cuts of $40 million over the next six year. He said the Baxter County Regional Medical Center relies on Medicare reimbursements for about 70 percent of its income.[i]

To make matters worse federal rules have penalized Arkansas hospitals because the hospitals have re-admitted more patients than the feds think should be allowed.  This is from the Arkansas Democrat Gazette on October 3, 2014.:

Almost half of Arkansas’ acute-care hospitals are once again being penalized with reduced Medicare reimbursement rates after the Centers for Medicare and Medicaid Services determined that too many patients had been readmitted within 30 days of discharge, according to records released by the federal agency Thursday.” (emphasis added)

According to an analysis by Kaiser Health News, the average penalty in Arkansas this year is second-highest in the country.”[ii]

The Arkansas Hospital Association and the two hospitals listed above are FOR the Obamacare Private Option because it provides an additional source of income for the hospitals. However, the Obamacare Private Option can only replace a portion of the funds and it is a bad solution for Arkansas.

An important fact that tends to get omitted about hospitals is that some funds from the PO can be replaced by the federal government though Disproportionate Share Hospital (DSH) payments.


Soon Arkansas will have to pay 5% and then 10% of the costs of the Obamacare PO.  Arkansas contracted with Optimus for a report on the private option. The report gave a conservative estimate of Arkansas costs.  Once the 10% share is required, Optimus projected Arkansas’ cost to be about $333.5 million.

This projection doesn’t even include the likelihood that Arkansas will also be responsible for many millions of dollars for cost overruns.  Every month the Obamacare Private Option has been in operation, its costs have been above the per person cap agreed to with the federal government.  Plus, the U.S. General Accounting Office issued a report saying that the U.S. Health and Human Services Department is already giving Arkansas too much money.  Arkansas can afford the Private Option even without the likelihood of the additional cost.

What does $333.5 million mean to you? Compare $333.5 million to some of Arkansas’ current budget allocations.  Which of the following agencies or funds would you do away with in order to fund the Obamacare Private Option? What taxes do you want to raise for the Obamacare Private Option?

CFA chart PO costs

Where were the hospitals when Obamacare was passed since Obamacare takes away Medicare funds? The American Hospital Association supported Obamacare!


And, the solution offered by Obamacare Private Option supporters is to replace part of the Medicare money by ruining Arkansas’ budget with the PO?!


About half the states have refused to adopt Obamacare Medicaid Expansion (Private Option in Arkansas).  It is time  to show the country that Arkansas won’t be duped, and to join the other states that have refused to accept Medicaid Expansion. It is time to work with the new congress to fix the real problem which is the robbing of Medicare to feed the enormous appetite of OBAMACARE.


[i] Private-option plan lifts hospitals, legislators told, Arkansas Democrat Gazette, 05/16/2014

[ii] Medicare cuts up in faulting state hospitals, Arkansas Democrat Gazette,10/03/2014


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1 Comment on Private Option’s Hospital Scare

  1. Kathryn Foster Malloy // November 1, 2014 at 4:04 pm //

    Arkansas will be a disaster!!!
    Why is it that would be intelligent people
    Are not able to see or understand this?
    Those who have been for OBAMA CARE
    Must have a shield over their eyes and ears.
    With the election just a few days away now ,
    This information needs to be put out
    In all ways possible . Voting “straight
    Blue” will not serve to help
    Correct this issue for our State. Please
    Think before you vote!!!

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