Arkansas DHS presents budget to lawmakers

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Associated Press

Posted on January 17, 2014 at 12:05 PM

Updated Friday, Jan 17 at 12:05 PM

LITTLE ROCK, Ark. (AP) — Arkansas Department of Human Services officials told legislators Thursday that they're planning the fiscal 2015 budget under the assumption that the General Assembly will continue a Medicaid expansion plan that provides low-income residents with private health insurance.

DHS Director John Selig said before the Joint Budget Committee that the agency isn't asking for an increase in what it receives in state general revenue but does intend to shift some positions around to better allocate its resources.

"We knew that budgets were very tight," Selig said.

The agency administers the Medicaid program and oversees numerous state offices, from the Health Department to services for the blind, to programs for children, families and the elderly. DHS has more than 7,000 employees and an overall budget of about $5.4 billion.

State Director of Medical Services Andy Allison said the Medicaid program received $400 million from the federal government in the current fiscal year to fund the private health insurance option. If the program continues in fiscal 2015, that number will grow to $1.5 billion in federal money.

The private option narrowly passed the Republican-dominated House and Senate last year and will be subject to approval again in the fiscal session that begins Feb. 10. Democratic Gov. Mike Beebe said earlier in the week, after Republicans picked up another Senate seat in a special election, that he thinks the private option will be a tough sell, but that it can pass.

More than 87,000 Arkansas residents have gotten health insurance under the federal health overhaul law, including about 60,000 through the private option, Allison said.

One of the goals of the program is to move eligible individuals and families from the traditional Medicaid program, which provides health coverage for the state's poorest residents, into private option coverage.

People with incomes below 138 percent of the poverty line don't have to pay for the coverage. Those earning above the cutoff receive subsidized insurance, with payments growing as an earner's income rises. Health savings accounts can help people budget for their insurance payments, Allison said.

Allison and Selig said having the newly insured more actively manage their health care will bring savings, as will improvements in care management that are designed to reduce the number of hospitalizations.

Sen. Johnny Key, R-Mountain Home, said after the meeting that he believes the private option will remain in the budget. Several Republicans who voted for it last year have primary opposition, but Key said they won't benefit politically from changing their votes.

"Most of the minds are made up," Key said.

Key noted that after several years, the state will have to start paying a share of the Medicaid expansion and said he's eager to see some of the anticipated savings be put away in a trust fund provided for in the private option legislation so the state won't have to struggle to pay that cost.

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