Arkansas has received its share of national attention the past few months, culminating in the spectacular defeat of incumbent Democratic U.S. Senator Mark Pryor by GOP Congressman Tom Cotton. In an electoral thumping powered by opposition to Obamacare, last night also saw the defeat of every Democratic candidate for Congress and all statewide offices.
But there’s one more Obamacare loss likely on the horizon in the Natural State: Arkansas’s disastrous “Private Option” Obamacare expansion. In fact, news is so bad that incoming state Senate President and Private Option cheerleader Jonathan Dismang may have to curtail his time campaigning for Obamacare expansion in other states.
Flashback: Obamacare Expansion Funding Was Always On Shaky Ground
In 2013, the Obamacare Private Option squeaked through the Arkansas Legislature. Several votes were taken in the House before outgoing House Speaker Davy Carter (R-Cabot), with the help of Democratic Governor Mike Beebe, was able to strong-arm enough Republicans to join Democrats in passing the Obamacare expansion. In the Senate, outgoing Senate President Michael Lamoureux (R-Russellville) rounded up barely enough votes to approve the funding, without a single vote to spare.
In late 2013, pro-Private Option state Senator Paul Bookout (D-Jonesboro) resigned his seat amidst an ethics scandal, paving the way for now-Senator John Cooper (R-Jonesboro) to sail into office on an anti-Private Option platform. Cooper’s victory marked the first election of a Republican in his district since Reconstruction. This left the expansion one vote short in the state Senate.
However, even though former supporters of the Obamacare expansion plan reversed course, that wasn’t enough to stop the expansion funding for good: Gov. Beebe bought off state Senator Jane English (R-Jacksonville) with a pet project, giving expansion advocates just enough votes to reauthorize the expansion for another year. And after four failed attempts, Speaker Carter picked off just enough votes in the House from lame duck legislators to keep the program alive.
First Political Fallout: Pro-Obamacare Candidates Lose Primary Elections
Polling in the state this year has consistently shown a rapid decline of public support for the Private Option, with Republican voters opposing the program by more than 2-to-1 margins. The Arkansas Republican County Chairman’s Association also came out in near-unanimous opposition to the Obamacare expansion plan.
State Representative John Burris (R-Harrison), the chief legislative architect of the Private Option, suffered the highest-profile loss. Burris, a three-term legislator, lost his primary election to a political newcomer last June, despite a 3-to-1 fundraising edge. Other politicians who voted for the Private Option also lost primaries to steadfast Obamacare expansion opponents.
After these losses, the outgoing Senate President, who will serve as Governor-elect Hutchinson’s chief of staff, warned that there were no longer enough votes in the Senate to reauthorize Private Option funding in 2015. With Tuesday night’s elections, Arkansas is now on track to become the first state in the country to escape Obamacare’s Medicaid expansion.
Election Night Takeaway: It’s Time to Find the Obamacare Escape Hatch
Even before Tuesday’s elections, the Private Option had an uphill climb for reauthorization. Critical wins by over a dozen anti-Obamacare candidates have made that climb all but impossible. Simply put, the outlook for the Obamacare Private Option in Arkansas is bleak.
Republicans gained 12 seats in the Arkansas House on Tuesday night, with almost all of these incoming legislators running against Obamacare. At this point, to get the funding thru the Arkansas House, incoming Speaker Designate Rep. Jeremy Gillam would have to find 38 Republican votes – and he’d have to do it without the help of outgoing Gov. Beebe, who’s proven he’ll do just about anything to save the program.
In the Senate, former Rep. Linda Collins-Smith crushed sitting Rep. James McLean by a margin of 16 points, and political newcomer Blake Johnson unseated Senator Robert Thompson (D-Paragould) by 8 points. Both McLean and Thompson made theirsupport for the Obamacare Private Option a centerpiece of their losing campaigns. McLean even went so far as to say that the election was a referendum on the expansion and pledged to vote for the funding “100 times” if necessary.
But, news broke out of the capitol today that a vocal and consistent supporter of the Obamacare expansion in the state Senate will soon be resigning his seat. It’s unlikely that his seat will be filled in time for the legislative session in January. It’s even less likely – given recent history – that his seat will be filled by a pro-Obamacare expansion candidate. Assuming the rest of the votes from the last session stay in place, the pro-Obamacare expansion caucus is currently five votes short.
Even the Obamacare caucus knows – it would take nothing short of a miracle to flip that many senators, especially considering the growing political toxicity of the issue.
A New Governor; A New Approach
Arkansas’ new governor may play a pivotal role in rolling back his predecessor’s Obamacare expansion. Unlike his opponent, former Congressman Asa Hutchinson (R) has expressed serious reservations about the cost of the program going forward and floated the possibility of ending the program outright.
While Hutchinson may not be a firebrand right out of the gate, so far he’s taking a thoughtful approach to tackling this issue and he understands that the bill for Arkansas’s Obamacare experiment will soon be due. With Gov. Mike Beebe (D) at the helm, the attitude was quite clearly “full-speed ahead”, no time for questions. His only solutions to exploding Private Option costs were to ignore the problem and cover it up– or spread false and misleading information. With Hutchinson in the governor’s mansion, math might just take priority over political ambition.
Hutchinson’s new lieutenant governor, outgoing Congressman Tim Griffin, has long expressed serious concerns about the sustainability of the Obamacare Private Option. Griffin, who remains skeptical of the program’s future, will preside over the Senate and intends to take a more active role in shaping policy.
Where Does Arkansas Go From Here?
As the dust of the 2014 mid-term election settles, talk about how to roll back the Obamacare expansion is quickly heating up in Little Rock. A red-dyed U.S. Senate swept into power by the anti-Obamacare wave could make Private Option repeal even easier if the new GOP majority succeeds in dismantling Obamacare at the federal level. With this uncertainty surrounding federal funding at an all time high, it is imperative that Arkansas repeal or rollback its Obamacare expansion.
One possibility that’s getting significant attention is to strip the Private Option out of the budget entirely, ending the program at the end of the current fiscal year. Some pro-expansion politicians may support holding the entire budget hostage in order to protect Obamacare expansion, like they tried in Virginia, but that kind of political brinksmanship is politically unpopular with the public at large.
At the other end of the spectrum, many legislators are mulling the prospect of funding the program for the next fiscal year, but immediately freezing enrollment. This approach, similar to the Ballinger-Hendren amendment proposed during the fiscal session, would allow for a more gradual wind down of the program and allow enrollees to keep their plans until they increase their incomes, transitioning out of eligibility.
Such an approach is not untested. Arizona, for example, froze enrollment in its own Medicaid expansion in June 2011. At that time, roughly 230,000 childless adults had enrolled in the program, close to where Arkansas’ enrollment will be by January. Enrollment began dropping as more and more adults moved out of program eligibility, allowing the state to gradually rollback its expansion.
Within six months, nearly 66,000 adults had transitioned off the program, a decrease of nearly 29 percent. By the one-year mark, enrollment been cut in half, dropping by nearly 115,000. At the two-year mark, nearly 155,000 adults had transitioned off the program, a drop of more than 67 percent.
Freezing enrollment would transition thousands of able-bodied adults off of welfare and back into the workforce, saving taxpayers billions of dollars and protecting the most vulnerable from the Obamacare chopping block.
A final deal is likely to fall somewhere between these two options. This, a middle-ground scenario, is likely the most palatable for both camps: anti-Obamacare legislators will have succeeded in ending the program in a thoughtful, compassionate way. Pro-Obamacare legislators will be able to avoid the embarrassment of enduring vote after vote after vote, only to come up empty in the end.
This strategy, if agreed to in advance of the session, would also get the issue off the table sooner and not backlog the entire session as it has in the past. Lawmakers would be able to immediately get to work on a rigorous agenda for economic growth, including the passage of Governor-elect Hutchinson’s tax reform plan.
A Time for Choosing
Whatever path Arkansas legislators choose for unwinding their Obamacare expansion, one thing is abundantly clear: Arkansas will never achieve meaningful economic growth or tax reform with this expansion left intact. The bill is coming due very soon. The people have spoken in election after election. It’s time for Arkansas’s failed Obamacare experiment to end.
This post originally appeared at Forbes on November 5, 2014.