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UPDATE Beebe disputes Hutchinson’s claim of ‘fuzziness’ on private option savings


NORTH LITTLE ROCK — Gov. Mike Beebe said Tuesday there is no “fuzziness” to his administration’s estimate of $89 million in expected savings from the so-called private option, emphatically rejecting Republican gubernatorial candidate Asa Hutchinson’s description of it by that term.

Beebe also said Arkansas has “a crisis in corrections,” in part because of overreaction to one particular case in which the parole system broke down.

The governor spoke at the winter conference of the Arkansas Sheriffs’ Association a day after Hutchinson spoke to the same group. Hutchinson told the sheriffs Monday, when asked about the possibility of budget cuts if the private option is not renewed this year, that he believes “the numbers are very, very loose.” He told reporters later that “I think there’s a lot of fuzziness on what may or may not happen” if the private option is not renewed.

The private option is the state’s program that uses federal Medicaid money to provide private health insurance to low-income Arkansans. About 85,000 people have enrolled so far.

Beebe told the sheriffs Tuesday, “Those people that would criticize that budget, whether it’s Mr. Hutchinson or anybody else for that matter, if they’ve got better numbers, I’d sure like to hear them. If they’ve got a better source than DF&A and the national sources that we’ve utilized in this state since I’ve been in government, which is 31 years, going on 32 now, I’d sure like to hear them.”

“It’s not hype. It’s not B.S. It’s plain old arithmetic,” he said.

Beebe, a former state senator and state attorney general, is term-limited. He defeated Hutchinson in a hard-fought governor’s race in 2006.

Hutchinson, a former U.S. attorney, congressman, administrator for the U.S. Drug Enforcement Administration and undersecretary for the U.S. Department of Homeland Security, has two Republican primary opponents, state Rep. Debra Hobbs of Rogers and Little Rock businessman Curtis Coleman. Former Congressman Mike Ross is currently the only Democratic candidate for governor.

Talking to reporters Tuesday, Beebe said tax cuts that were approved during last year’s legislative session make the expected savings from the private option crucial.

“Now you’re in a situation where you’ve spent that money, in the form of giving it back in lower taxes, therefore less revenue to the state, and it’s being paid for by the proceeds of the private option,” he said. “If that goes away, what are you going to do? You’ve got a problem.”

Hutchinson said Tuesday that his comment about fuzziness was not meant as an accusation but as a reference to the fact that there are still questions he has not heard anyone answer.

“The estimate was that we were going to have 250,000 (enrollees in the private option), and if we’re going to get there I’d like to know what the time sequence is.” he said. “And then secondly, if this winds up being a 125,000 enrollee program, what is the impact on the budget?”

State Department of Human Services spokeswoman Jane Luck said Tuesday that no prediction has been made as to when enrollment may reach 250,000. She said the estimate of savings from the private option is not based on an enrollment number but on the savings from cancelling programs funded by traditional Medicaid and moving the participants into the private option.

“We had to calculate the savings form the savings of the tuberculosis program, the breast and cervical cancer treatment program, the family planning waiver and ARHealthNetworks,” she said.

Canceling those programs accounts for $55.8 million of the $89 million in estimated savings, with the rest coming from reducing the state aid that hospitals, community health centers and prisons receive for uncompensated health care costs, according to DHS.

Also Tuesday, Beebe told the sheriffs he now believes “we overreacted” to the case of Darrell Dennis, a parolee accused of killing a teenager while free despite multiple arrests. The case led to changes that make it harder for parolees awaiting revocation hearings to be freed from jail, which Beebe said has resulted in county jails filling up with parolees, especially in Pulaski and Sebastian counties.

“We’ve got a crisis in corrections now, and I have proposed ways to try to address that,” he said.

Prison officials are making changes to try to alleviate the problem, Beebe said. He also noted that his proposed balanced budget includes funding for 350 new prison beds, though he acknowledged that “even with this new money the problem’s not going to go away.”