Arkansas Lawmakers Who Want To Surrender Even More Control Over Health Care Policy Should Love HB 2138

Secure Arkansas Legislative Alert: HB 2138, the first step to implement Obamacare in Arkansas, is scheduled to be continued in the House Insurance and Commerce Committee, Room 149, State Capitol, March 18, 2011, Friday, at 8:30 am. Try to be there. Without a show of strength, this will surely pass and Beebe will get his way. It is important that we have a crowd there to show our opposition. It was tabled in the House Insurance and Commerce Committee yesterday.

The below article by Dan Greenberg, sets out a “third way” approach.  This approach is a good reason why our legislators should vote down the Beebe exchange plan and explore other solutions.

In addition to this third option, there could be more options available if our legislatures avoid acting in haste and complying with Beebe's exchange plan now. No one has been this way before - these are unchartered waters and Arkansas must act carefully and responsibly because ultimately it is going to be placed in the laps of Arkansans to pay for. We must avoid costly plans that could come out of this and expanding government. Our motive is to explore all the other potential options for insurance reform that would be agreeable to all Arkansans and to avoid the putting our state into bankruptcy as happened in Massachusetts. Secure Arkansas recommends that the legislative body pause and explore other options besides (1) the federal exchange plan and (2) the Beebe exchange plan.

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By Dan Greenberg, Advance Arkansas Institute:  Arkansas lawmakers have numerous options under federal health care reform, even though some advocates of HB 2138 are pretending that there are only two options available under federal law. HB 2138, which is scheduled for a committee vote today, is Governor Beebe's proposal for a new state-level health care exchange. Arkansas Times editor Max Brantley recently wrote that if the state fails to pass the Beebe exchange plan, "the alternative is to let the feds run the program, probably at a higher cost." Arkansas Times columnist Ernest Dumas echoed Brantley, saying that HB 2138's defeat "will accomplish only one thing: Arkansas businesses and individuals will be buying health insurance through the federal exchange supervised by the U. S. Department of Health and Human Services rather than from the locally devised and regulated market."

These statements, which seem almost designed to force legislators into a false choice, are not simply misleading or irresponsible. They are flatly wrong. There are many other options available to lawmakers beyond the federal exchange and the Beebe plan.

It is true that if lawmakers do nothing, Arkansans will be under the federal exchange. But the Beebe plan isn’t lawmakers’ only other option. A third alternative, the creation of a state exchange which would be confined to purely administrative matters, would permit state agencies to perform their traditional regulatory functions.

The virtue of this “third way” approach is that it avoids the fundamental problem of the Beebe plan: namely, it avoids the prospect of creating a new state regulatory body that will likely, over time, grow independent of state policymakers and take more and more orders from the federal government. It has many other advantages: it would be much more economical, much less disruptive to established insurance markets, and perhaps even budgeted for with user fees and private contractors. The Insurance Commission, not the new Beebe exchange, could independently determine which carriers and health plans would be offered to Arkansans. Arkansas's Medicaid administrators, not the new Beebe exchange, could independently determine client eligibility. The  state's existing system of licensure, not the new Beebe exchange, could independently determine the qualifications of insurance agents. Perhaps most importantly, this alternative state exchange could contain a sunset provision that would cause the whole exchange to end if federal health care reform is eliminated by the Supreme Court or by Congress.

In short, this “third way” approach would create an exchange that would preserve the state legislature’s authority in health care policy, restrict federal interference, minimize market disruptions, limit the many costs and risks that federal health care reform poses to Arkansas, and allow our state to respond flexibly and appropriately to future changes in federal law.

In any case, lawmakers would do well to avoid acting in haste. The first deadline for showing that the state is on track with federal health care reform is more than 21 months away. Establishing an exchange during a future fiscal session or special session would likely lead to more deliberate decisions than those springing from the end-of-session pell mell that lawmakers currently face. Political climates, federal requirements, and constitutional judgments all change over time: lawmakers who leap into endorsing the Beebe Administration's proposal run the risk of being embarrassed by events in the next year or so that could demonstrate that the current exchange is unworkable. (And unlike Governor Beebe, many of those lawmakers will have to run for reelection in 2012 in order to stay in office.)

Arkansas policymakers don’t have to choose between a federal exchange and the Beebe plan. Lawmakers who want what is best for their constituents should resist the urge to choose between the two unpalatable alternatives of an inflexible federal straitjacket and an inflexible Beebe Administration straitjacket. There's no harm in waiting for next year's fiscal session so that we can have an alternative that will fit Arkansas better.
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Dan Greenberg, a lawyer and former state legislator, is President of the Advance Arkansas Institute.

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