LITTLE ROCK — The revamped health-care bill unveiled by Senate Republican leaders last week did not appear to satisfy the concerns of Arkansas’ governor and groups in the state that opposed the previous version.

End to Medicaid expansion funding

In an appearance Friday on CNBC, Gov. Asa Hutchinson, who was in Providence, R.I., for the summer meeting of the National Governors Association, said the latest version of GOP legislation aimed at repealing and replacing the Affordable Care Act contains significant improvements over the previous version but retains a major cost shift to the states.

The bill would phase out federal funding for states’ Medicaid expansion programs. The federal government initially paid 100 percent of the cost of Medicaid expansion and by 2020 will be paying 90 percent, but the Senate bill would reduce federal funding gradually to states’ regular Medicaid matching rate, which in Arkansas is 70 percent.

More than 300,000 low-income Arkansans have obtained private health insurance under Arkansas’ hybrid Medicaid expansion program. The state legislation that created the program includes a provision requiring it to end if the federal matching rate is reduced below the level established in the Affordable Care Act, which would happen under the Senate bill in 2021.

Hutchinson said Friday the reworked bill includes “a more fair distribution of federal money” and said he likes a provision allowing states to opt to receive traditional Medicaid funding as a block grant.

But the governor also said the bill’s reduction of the matching rate for Medicaid expansion is “a cost shift to the states.” He has said previously that such a cost shift would force Arkansas to eliminate or greatly reduce its Medicaid expansion program.

“We’re anxious to see the (Congressional Budget Office) numbers that come out Monday on this,” he said Friday. “I expect from those CBO numbers you’ll continue to see a significant increase in the number of uninsured as a result of that reduced funding.”

The CBO has said the previous version of the Senate bill would cause 22 million Americans to lose health insurance over 10 years. A health-care bill passed by the House in May, with the support of Arkansas’ delegation, would cause 23 million Americans to lose insurance over that period, according to the CBO.

Asked if he wishes his predecessor, Democrat Mike Beebe, had not accepted Medicaid expansion funding in the first place, Hutchinson said, “I wouldn’t say that. I wish the federal government would keep its bargain. That’s the frustrating part.”

Hutchinson said the program, formerly known as the private option and now called Arkansas Works, “has benefited over 300,000 Arkansans, it has kept our insurance premiums on the individual market at a reasonable rate — it is never low enough, but it is not as bad as it’s been in other states — it has kept insurers in our state.”

The governor noted that he is seeking federal approval for changes to the program in an effort to reduce the state’s Medicaid expansion population and lower costs.

“We’re making significant reform, but just don’t undercut us by withdrawing that federal partnership,” he said.

Impact on premiums

Theoretically, Arkansans who have obtained insurance through Medicaid expansion would be transitioned to the health insurance marketplace and receive subsidies to buy insurance there. But many Arkansas who are sick or have pre-existing conditions may find they cannot afford adequate coverage through the marketplace, according to Marquita Little, health policy director for Arkansas Advocates for Children and Families.

Little said in an interview the bill would allow insurers to offer cheaper plans with skimpier benefits in addition to more comprehensive plans, so many healthy people likely would switch to the cheaper plans, forcing insurers to make up the difference by raising premiums for the plans needed by sicker Arkansans.

“It could inadvertently drive the cost of the comprehensive plans much higher, and we leave people with pre-existing conditions without coverage because they can’t afford it or they have to resort to the skimpier plans,” she said.

The provision allowing insurers to offer cheaper plans if they also offer more comprehensive plans, added as an amendment by Texas Sen. Ted Cruz, seeks to satisfy Republican senators who want premiums reduced.

Robert Romano of Americans for Limited Government applauded the Cruz amendment in a statement last week, saying it “would for the first time in a long time bring down the cost of premiums for the American people, and truly help to make insurance more affordable.”

Changes to traditional Medicaid

The bill also would transform traditional Medicaid. It would end the current funding system, which requires the federal government to provide matching funds for states’ Medicaid expenditures with no cap. Instead, the measure would allow states to receive a fixed amount of money per Medicaid enrollee or a set amount of money as a block grant.

Hutchinson has voiced support for the block-grant option, saying it would reduce the federal deficit and be more fair than a per-capita system that would punish states like Arkansas that have stricter Medicaid eligibility requirements.

Little said either system would result in a cost shift from the federal government to the states, which she said would not bode well for Arkansans who rely on traditional Medicaid programs.

The CBO has estimated that the earlier version of the Senate bill would cut federal Medicaid spending by $772 billion over the next decade.

Asked what changes would satisfy Arkansas Advocates, Little said it is time to “scrap this plan and for our leaders to work on a bipartisan proposal.”

Donna Massey, president of Arkansas Community Organizations, said in a statement, “The revised Republican health care bill will still end the Medicaid expansion, restructure Medicaid and cause deep cuts in programs important to Arkansans, contains provisions that allow insurers to deny or charge more for coverage for people with pre-existing conditions, give huge tax breaks to the pharmaceutical industry and insurance companies, and cause millions of people to lose their health coverage.

“It’s just more lipstick on a pig,” she said.

Arkansas senators studying bill

Arkansas Sens. John Boozman and Tom Cotton have not stated positions on the bill.

Boozman said in an email Friday, “We need a health care system that ensures access to affordable, quality care for every American. Obamacare failed to establish this. In fact, it made the situation worse for millions of Americans. We are trying to determine whether or not this revised Senate bill will be able to accomplish our goal of improving health care for all Americans.”

A spokeswoman for Cotton said he was reviewing the latest version of the bill.

Assuming no Democrats will vote for it, the measure will need the support of at least 50 of the 52 Republican senators to pass.

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Contact John Lyon at jlyon@arkansasnews.com and follow him on Twitter at @johnlyon09.