- As Mississippi’s legislative session nears close, lobbyists and advocacy media outlets have begun pushing the ‘Arkansas model’ as a compromise. It’s a bad play for current Medicaid enrollees and the state budget.
A friend of mine sent me a text this week quipping that one Mississippi news outlet should change its name to “Medicaid Expansion Today.” The recent frenetic activity on Medicaid, from advocacy media, to far-left rallies, to lobbyists with a financial interest, is not a sign of strength. It’s Hail Mary desperation.
With as little as one week remaining in session, proponents want a win on full Medicaid expansion badly. Only a wide chasm exists between the plans passed by the Mississippi House and Senate. Such chasms can kill a bill as effectively as a “no” vote. But not always. Sometimes, mixed with the pressure of a ticking time clock, wide chasms yield monstrously bad compromises.
Enter the discussion of the ‘Arkansas model’ as a “middle ground” for Mississippi. In reality, heading that direction would combine the worst aspects of the House and Senate plans.
The Arkansas Experience
When Obamacare passed Congress in 2010, it offered states the ability to expand Medicaid to a new category of recipients — able-bodied adults without dependents. It marked a big shift for the program, from people who could not work and take care of themselves, to people who could. The law also increased the income threshold for all adults from the federal poverty level up to 138 percent of the poverty level.
The State of Arkansas expanded Medicaid in 2014. To avoid the “Obamacare” label, instead of putting the newly eligible adults directly on Medicaid, Arkansas used Medicaid dollars to buy private insurance for the newly eligible adults.
Arkansas’s plan quickly proved inequitable, expensive, and ineffective. The traditional Medicaid populations — children, pregnant moms, impoverished elderly, and the disabled — found themselves competing for care with a new population of able-bodied adults furnished with private insurance plans. In other words, the program actually favored able-bodied adults.
The plan also proved more expensive than Medicaid expansion in other states, which is a feat considering staggering cost projection overruns experienced across the country. Arkansas’s Medicaid budget doubled over the last decade.
Finally, it proved ineffective at changing outcomes. The Center for Health Quality and Payment Reform’s at-risk hospital report shows Arkansas with a higher percentage of hospitals at risk of closure than Mississippi. What’s worse, after a decade of the program, United Healthcare’s America’s Health Rankings puts Arkansas dead last in the nation for health outcomes.
The plan has been so unworkable that it is on its fourth iteration. It’s like that restaurant in your town that keeps changing names, but offering the same low quality food.
Putting Dogma Before Reason
At some level, the Medicaid expansion debate in Mississippi has devolved into a power play. Truth, reason, and good policy outcomes have taken a back seat to “winning.” That’s unfortunate.
Earlier this session, the Mississippi House of Representatives passed full Obamacare Medicaid expansion. It provided able-bodied adults without dependents access to Medicaid and increased the income threshold to 138 percent of the federal poverty level (FPL). A month later, the Senate passed its own version. As with the House plan, it provided access to able-bodied adults. Unlike the House plan, it only expanded the income threshold up to 99 percent of the FPL.
The Senate plan was contingent on approval of a work requirement. Full expansion under the House plan would take place, with or without, approval of a work requirement. In a March Magnolia Tribune/Mason-Dixon poll, 90 percent of Republican Primary voters said they would not support Medicaid expansion without a work requirement. 81 percent voiced general opposition.
In their analysis, Senators arrived at the conclusion that going up to 138 percent of the FPL was counterproductive. This is because anyone earning between 100-138 percent of the FPL already has access to a fully-subsidized private health plan on the ACA exchange. According to the Center for Medicare and Medicaid services, there are 181,000 Mississippians in this income range enrolled in a private plan on the ACA exchange.
The federal government pays 100 percent of the subsidies for these plans and bears the administrative responsibility for determining income eligibility. It’s estimated the exchange plans bring over $1 billion into the Mississippi economy, a fact which no economic analysis done in support of Medicaid expansion has bothered addressing.
Under federal law, if full expansion occurs up to 138 percent, the ACA exchange population within the relevant income range will lose access to their current insurance and be forced onto Medicaid. Essentially, the vast majority of the Medicaid expansion population would be people the state is kicking off private insurance.
Media coverage of the Senate plan and the facts surrounding the ACA exchange has been abysmally lacking and arguably dishonest.
Perhaps the House’s desire to fully expand Medicaid coupled with the Senate’s desire to preserve the ACA exchange marketplace led the lobbyists pushing full expansion to Arkansas. The ‘Arkansas model’ of full expansion does seeks to preserve access to private insurance, but in a truly dumb way in light of the current ACA exchange marketplace.
Under that model, Mississippi would take on 10 percent of the cost for private plans when the federal government currently covers 100 percent of that cost. The state would also take over the responsibility of determining income eligibility for people earning between 100-138 percent of FPL, meaning new administrative burdens for the Division of Medicaid.
It’s the most expensive option proposed to date for the state. It’s been proven ineffective in another state. It’s not a rational act. But sometimes desperation makes people do silly things. We will see.
