Private Option/ Arkansas Works = TAX INCREASE!
If you are unfamiliar with the terms “Medicaid Expansion”, “Private Option” or “Arkansas Works” or who is covered, there is an explanation at the bottom of this article.
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If Arkansas continues Medicaid Expansion, ARKANSAS TAXES WILL INCREASE.
Arkansas’ share of the costs is estimated to be $656 million for 2017-2021.[i] That is an average of $131 million per year and is a very low estimate because the period only includes one year during which Arkansas’ share of the cost is at a 10% match. Even at $131 million a year that is a lot of Arkansas taxpayer money. For comparison it is twice the annual appropriation to the Arkansas State Police.
Supporters of Medicaid Expansion will try to convince you that it is all “free” money. They make the following conflicting claims:
- Medicaid Expansion pays for itself and even makes money for the state. (The claim doesn’t add up! It is primarily based on the liberal idea that the more taxpayer money you spend the more you stimulate the economy and bring in more taxpayer money to spend.)
- Savings from cuts and reforms in traditional Medicaid will pay for Medicaid Expansion. (This argument conflicts with their first argument. In addition, the shift of money from traditional Medicaid will hasten the need to raise taxes to support traditional Medicaid.)
- There is a pile of federal tax money that other states will get if we don’t claim our share. (This argument has been shown to be FALSE by the Congressional Research Office)[ii]
Medicaid cuts to fund Obamacare’s Medicaid Expansion
Arkansas’ consultants say “the traditional Medicaid program is growing at an unsustainable pace, displacing other critical services, such as education, public safety, and criminal justice.”[iii] So cuts and “cost saving” measures have been proposed to hold back tax increases or cuts in basic state services. But, before the cuts are even adopted politicians want to spend the claimed savings on another program, Medicaid Expansion.
Governor Asa Hutchinson wants to take Medicaid cuts (or reforms) and use the “savings” of $835 million over five years to help pay for Medicaid Expansion. This does not keep Medicaid Expansion from costing you money. All it does is hasten the day when your Arkansas taxes will increase to pay for traditional Medicaid. This scheme allows supporters of government dependence to grab the money for Medicaid Expansion and then shift the blame to traditional Medicaid when your taxes go up.
It is all about posturing and fooling Arkansans with a blame game. Politicians know Arkansans do not want to increase taxes for Medicaid Expansion. Therefore, politicians are claiming to fund it with “savings” in traditional Medicaid. As the costs of traditional Medicaid continue to increase the $835 million will be gone and the “need” for more of your tax money will be blamed on traditional Medicaid instead of on the controversial Medicaid Expansion program. Using Medicaid cuts to fund the new Medicaid Expansion entitlement program is not “free” money – you will still pay for Medicaid Expansion.
Medicaid Expansion does not pay for itself and save money
The consultants who claimed Medicaid Expansion pays for itself acknowledge they were required by contract to be supportive of the Private Option (Medicaid Expansion).[iv] The report claims the program will save the state $656 million over the five-year period 2017-2021.
You are supposed to believe expanding government with more people being dependent on the government will somehow save taxpayer money. Do you buy that? Or do you think it sounds like the email scam claiming to be a Nigerian prince with a great opportunity just for you?[v]
FIRST, the claim of saving is contradicted by the proposal to shift $835 million over five years from Medicaid to Medicaid Expansion.
SECOND, the claim that Medicaid Expansion saves money doesn’t add up. Much of the savings claimed is based on the liberal idea that the more taxpayer money you spend, the more you will stimulate the economy and the more taxes you collect. The claimed savings also includes numbers that appear substantially inflated, ideas that do not appear to match federal law, and the scheme to skim federal tax money by collecting a state insurance premium tax on each Private Option policy bought through Medicaid Expansion. The insurance premium tax increases the cost of the program and ignores the fact that Arkansas taxpayers are also federal taxpayers. For an analysis of the consultant’s claim of savings, follow link to article: Claimed Private Option savings doesn’t withstand scrutiny.
The pot of money myth
Some Arkansas politicians are still going around claiming that there is a federal pot of money designated for Arkansas’ Medicaid Expansion program and claim if Arkansas ends Medicaid Expansion our federal tax money will go to some other state. This is FALSE. There is no pot of money. There is only more federal debt.
The claim that we will lose a share of a pot of tax money, was debunked by the Congressional Research Service more than a year ago. You can read the report HERE. You may even want to print it and give it to your legislator so he or she will not be fooled by this bogus claim.
Bottom line
The Medicaid Expansion program in Arkansas is estimated by the state’s consultants to cost $9.652 billion dollars from 2017-2021. No matter how you try to explain it away, continuing Medicaid Expansion is estimated to cost Arkansas taxpayers $656 million dollars in state funds.[vi] The remainder of the cost, you and your children get to pay for as increased federal debt which is already an astounding $18.8 TRILLION.
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Explanation of terms – Same program different names.
The various names for Medicaid Expansion can be confusing. What is clear is that under any name it is going to cost Arkansas taxpayers!
Medicaid Expansion – Medicaid Expansion is one of the pillars of Obamacare (Affordable Care Act). Medicaid Expansion provides health coverage based on a person’s income. It doesn’t matter that the person has lots of assets that could be used for health coverage and it doesn’t matter that the person is able to work but doesn’t. Medicaid Expansion is not for our most vulnerable citizens who are disabled, aged, children, pregnant women, etc. because they are covered under traditional Medicaid. Based on census data people eligible for Medicaid Expansion coverage are overwhelmingly able bodied working age adults with no dependents and nearly half do not work at all, not even seasonally or part time.
Private Option – Private Option is the name of Arkansas’ Medicaid Expansion. The name is based on Arkansas’ waiver which allows benefits to be delivered in the form of insurance cards instead of directly through the Medicaid program. This is a boon for insurance company profits but adds costs to the program, especially with the cost of policies having to increase due to the collection of an insurance premium tax.
Arkansas Works – Arkansas Works is the proposed rebranding of the Private Option with a new name. It still benefits big insurance companies by running benefits through the companies. Arkansas Works claims to address the problem of beneficiaries not working by referring them to an employment training program. Making a referral doesn’t actually do anything. You can’t make the person get training or a job. Arkansas Works is a further expansion of government by giving taxpayer funded incentives to big businesses with employee insurance to hire a person who is on Medicaid Expansion. This is another example of picking winners and losers with your money. Small business owners are not going to be able to benefit from this expansion of government.
[i] The Stephen Group: Volume 1 Findings (amended to include all Appendix references), October 1, 2015 (released October 7, 2015) Page 65 – Report available at: http://www.arkleg.state.ar.us/assembly/2015/Meeting%20Attachments/836/I14099/TSG%20Volume%20I%20Findings%20Report%20amended%20to%20include%20all%20Appendix%20refrerences.pdf
[ii][ii] http://uncoverobamacare.com/wp-content/uploads/2015/02/CRS-memo-Questions-About-the-ACA-Medicaid-Expansion-Jan.-2015.pdf
[iii] The Stephen Group: Volume 1 Findings (amended to include all Appendix references), October 1, 2015 (released October 7, 2015) Page 4
[iv] “TSG’s [The Stephen Group] contracted responsibility calls for recommendations to improve the quality and efficiency of the traditional Medicaid program while offering a solution for the future of the Private Option, while maintaining coverage for the nearly 250,000 participants in the program.” (Emphasis Added) The Stephen Group: Volume 1 Executive Summary – 2. EXECUTIVE SUMMARY VOLUME II
[v] http://www.snopes.com/fraud/advancefee/nigeria.asp
[vi] The Stephen Group: Volume 1 Findings (amended to include all Appendix references), October 1, 2015 (released October 7, 2015) Page 65