I wrote a while back that the funding for the “private option” was in trouble. One strong indication was Governor Mike Beebe’s comments at a luncheon that, if lawmakers declined to re-approve the Medicaid expansion funding, the state would have to “cut services.” This is a typical liberal scare tactic; the kind we’ve grown accustomed to from Beebe and his Washington counterparts. But now the governor is upping the ante, launching an all-out offensive to put pressure on legislators to extend the program.
In a speech at the Arkansas Electric Cooperatives Directors’ Winter Conference earlier this week, Beebe said:
Those that voted ‘yes’ need to be reinforced and thanked and make sure they continue to vote ‘yes.’ Those that voted ‘no’ need to be educated in a professional fashion…Please, satisfy yourself about the truth of this. Then pick up the phone, go by and see your state representative and state senator. It’s too important, and it’s too high a hurdle just to take for granted.
Obviously the governor is quite worried that the program is in jeopardy. And, apparently, if we don’t continue the program, Beebe won’t have money he “needs and wants” to propose hiring more prison staff. (I must admit, this is the first time I’ve heard this emotional ploy; I’m not impressed.)
Beebe’s spokesman, Matt DeCample, is also making the media rounds, telling local radio stations that the state simply can’t cut funding for the “private option” because 1. People are depending on the program to obtain health insurance and 2. We will lose all of the “savings” the “private option” created, therefore jeopardizing the tax cuts, yadda yadda yadda. But there are fundamental problems with these arguments coming out of the governor’s office.
First of all, we were told (repeatedly) by legislative supporters of the “private option” that it was not, in any way, an entitlement. It was, well, different. To prove how serious they were about this belief, legislators inserted a provision in the law that requires enrollees in the program to sign a statement saying they understand that the program is not an entitlement. In fact, this provision relieved the concerns of exactly no one outside of the advocates of the private option. Nonetheless, the provision is there and we were told that it allowed the program to go away at a moment’s notice. Based on what we were told then, the argument we are hearing now that the program can never go away because people are dependent on it should be recognized as highly unserious.
Second, these “savings” we keep hearing about — where do they come from? In theory, they come from “economic growth” that was supposed to be created by the injection of billions of federal tax dollars into Arkansas. One problem: it hasn’t happened and, according to the state’s own estimates, it isn’t going to happen.
Here’s how House Majority Leader Bruce Westerman has outlined it:
1. We’ve been operating under a Medicaid expansion budget since July 1, 2013 or nearly one half year.
2. Initially projecting a surplus, DF&A has recently revised the revenue forecast down for the remainder of the fiscal year.
3. The bulk “positive economic impact” of Medicaid expansion should occur during the last half of this fiscal year (January through June 2014) since that is when most of the Medicaid expansion dollars will be spent.
4. Logic would say Medicaid expansion has not worked to improve the economy thus producing more state tax revenue, and the Governor’s very own DF&A director has projected that revenues will be down during the very time period that Medicaid expansion should have the state’s economy booming and tax creels overflowing.
While Governor Beebe is tossing out talking points to pressure the legislature to keep Medicaid expanded and embrace Obamacare, his very arguments for doing so are proving to be exactly opposite of their stated objectives. Why should we continue to fund something that is already hurting the economy and not living up to its promises?
(This might be a good time for me to remind you that some of us predicted this wouldn’t work because Keynesianism never has worked — but, hey, let’s not dig up ancient history.)
Arkansans were promised that expanding Medicaid would create a boom for our state’s economy. It hasn’t. Even the governor’s budget experts are now admitting that it won’t do the job as we go into the next calendar year. Arkansans were also promised that we could end the program at any point because “it’s not an entitlement.” Now we’re told it can’t go away because people are “depending on it.” The stories of “private option” proponents will likely continue to change, but reality will not: Medicaid expansion paves an unsustainable fiscal path forward for Arkansas.