Private option insurance for state’s poor necessary

Published: February 4, 2014

On Feb. 10 the Arkansas Legislature will convene for a fiscal session that will include deciding whether to maintain the “private option” to expand Medicaid for those whose incomes do not exceed 138 percent of the federal poverty guidelines. Bishop Anthony B. Taylor believes elected officials should consider the needs of their constituents before making a decision. There appears not to be a consensus on how to provide basic health care for the state’s poor. However, the private option is already in place and is an experiment yet to be given a chance. Bishop Taylor supports the private option and wrote this statement out of a concern for those whose voice might not reach the members of the legislature.

In 2013, the General Assembly passed the private option: a plan to bring the opportunity to obtain health insurance to all Arkansans not covered by employer plans. In part, the private option uses federal Medicaid funds to cover Arkansans living below 138 percent of the federal poverty level who cannot otherwise afford to purchase insurance on their own. This makes insurance affordable for the poorest 250,000. In all, the Arkansas private option offers insurance to approximately 500,000 people not covered by employer-provided plans.

One hundred percent of the cost of this Medicaid expansion for the private option is covered by the federal government for the first three years. After that, Arkansas will never be required to pay more than 10 percent of the cost of providing medical insurance coverage to its poorest citizens -- the federal government will cover the remaining 90 percent -- or Arkansas can decide to pull out.

Arkansans need the private option. Current polling shows that a significant majority of Arkansans want the private option. The number of those who have already enrolled in the private option is growing and will exceed 100,000 soon, if it has not already done so.

An issue has risen in anticipation of this February’s fiscal session of the General Assembly. Under Arkansas law, finance bills must pass with greater than a 75 percent majority. Opponents of the private option are attempting to build a minority large enough to defeat further funding of the private option. As few as nine senators could oppose the private option and defeat it.

If this happens, it will amount to what political scientists call a tyranny of the minority.

Why the opposition to the private option? Recently, in an article in Talk Business Arkansas, Rep. Joe Farrer of Austin (Lonoke County) put forward the general argument that the private option was simply too expensive. The opposition is short on facts and speculates based on worst-case estimates.

Each person has an inalienable right to life. This right is enshrined in the Constitution of the United States and is the core of Catholic social teaching. It inescapably follows that for that right to life to have meaning, one must have the opportunity to obtain the necessities of life: food, clothing, shelter and health care. Although everyone has the responsibility to work hard and live frugally to obtain life’s necessities, we must also recognize that there are those who will face challenges and will need help. We who are blessed with talent and are able to take advantage of the opportunities made available in our nation have the obligation to care for the less fortunate. We fulfill this obligation by personal acts of charity, through our churches and charities, and through our government.

The private option is not too expensive, nor is it a new expense. We already pay to care for those without insurance. People without insurance receive extraordinarily expensive health care either through emergency rooms or by waiting until their conditions require hospitalization. In either case, the uncovered costs are then passed on to others using the hospitals. We who have health insurance pay for those uncovered costs each month through our premium payments.

The private option will be good for the economy. A recent RAND report estimates that by 2016, the private option will bring more than $550 million into Arkansas’s economy and create 6,200 jobs. Further, the RAND report estimates the private option will save 1,100 lives each year among those included in the Medicaid expansion portion alone. The Arkansas Department of Human Services estimates that $670 million could be saved in the Arkansas state budget during the coming 10 years. Jackson Hewitt estimates that Arkansas businesses are likely to benefit from private option savings of $27 to $40 million each year by avoiding Affordable Care Act penalties.

Short-circuiting the private option at this time will damage the Arkansas economy. Because the governor and the General Assembly have no present plan to cope with the loss of the private- option funding, the effect on the state budget will be catastrophic. Loss of private option insurance income will have a profoundly negative impact on hospitals throughout the state. Arkansas’s flagship medical system, UAMS, absent the private option, would be forced to cut back services and medical research. Smaller hospitals, particularly those in rural areas, may not be able to continue operations.

In the end, the private option is unlikely to see the worst case predicted by opponents or the best case presented by the supporters. The actual result will be in the messy middle. Such is life. With this private option experiment, we have the greater chance of satisfying the common good by bringing affordable health care within reach of poor Arkansans. I urge our General Assembly to consider the prayer of Pope Francis: "I beg the Lord to grant us more politicians who are genuinely disturbed by the state of society, the people, the lives of the poor! It is vital that government leaders and financial leaders take heed and broaden their horizons, working to insure that all citizens have dignified work, education and health care."

Phone numbers and e-mail addresses for Arkansas legislators are available at http://bit.ly/arkansasleg.