The State Where Obamacare Stopped Working

Arkansas nearly found a compromise on Medicaid expansion. But now that deal is on the ropes, and that could be a very bad sign for proponents of expansion in other red states.
Arkansas resident Lori Latch, 35, said she was looking forward to having health insurance for the first time since she was a teen. (Brian Chilson/AP)

A few months ago it seemed like Arkansas had found an ingenious way to skirt its blood-red politics while extending health-insurance coverage to about 200,000 of its poorest citizens. While many other Republican states were rejecting federal funds to expand Medicaid under the Affordable Care Act, as I wrote a few months ago, Arkansas had instead used the federal money to allow the new Medicaid beneficiaries to buy private plans. This move satisfied both the Democratic governor, Mike Beebe, and others who wanted healthcare expanded, as well as the Republican-controlled legislature, which wanted to rely on the private sector. This so-called “private option” is now being considered by other conservative states as a potential route to expansion.

“We felt getting people off of the government program onto private insurance is better for the state, the providers, and most importantly, for the consumer,” Arkansas House Speaker Davy Carter, a Republican, told me at the time.

Since the private option passed, about 100,000 Arkansans have signed up for it. For some, it was the first time in years they had any type of health insurance. About a fifth of Arkansans under age 65 are uninsured. Nationwide, about five million people fall into the "Medicaid gap" created by states' opting out of expansion.

But like any good Obamacare saga, here’s where things spiral off into a confusing, strange Helicoid of Disagreement.

Because of a quirk in the state’s constitution, any appropriations bill—which includes the private option—must garner a 75 percent majority in the legislature. And now, some conservatives in the state’s House of Representatives are blocking the reauthorization of funds for the private option. Without approval, the program would fade out on June 30.

At a breakfast with reporters this morning, Governor Beebe said the private option’s failure would cost the state millions in higher medical bills for the uninsured.

How Arkansas' state insurance picture would have looked as of 2014, had the expansion gone forward. (Kaiser Family Foundation)

The state legislature plans to vote on the bill multiple times this week, so there’s a good chance it will pass eventually. But if it does, it will come with a major, and very controversial, change.

The revised bill would prevent the state from spending money on any outreach to potential beneficiaries related to either Obamacare or the private option, including any advertising, direct mail, or help from health-insurance assistants. That’s pretty significant, since mailed letters were a major part of the private option sign-up effort.

“Most of these outreach activities are fully federally funded,” the new language acknowledges, “But the state would not be able to spend those federal dollars.”

In other words, qualified people could still sign up for the private option, and those already on it could stay on, but the state would be forbidden from promoting it.

Arkansas state Representative Nate Bell, a Republican and one of the sponsors of the new language, readily admitted, "We're trying to create a barrier to enrollment."

On Twitter, people have been calling Bell a “sadist,” a “disgusting pig,” a “clown,” and worse.

I called Bell this morning, and two things are important to know about the change:

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Olga Khazan is a staff writer at The Atlantic, where she covers health.

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