DHS: Private option could save Arkansas $670 million over 10 years


LITTLE ROCK — Arkansas could save $670 million over 10 years under a proposal to provide private insurance coverage to low-income Arkansans, according to new estimates released Wednesday by the state Department of Human Services.

The agency released the new figures a little over a week after announcing that the cost to the federal government of the so-called “private option” for expanding health care coverage would be less than 15 percent higher than the cost of the original proposal under the federal Affordable Care Act, which was for the state to add people earning up to 138 percent of the federal poverty level to the state Medicaid rolls.

Under either option, the federal government would pay the entire cost of the expansion for the first three years, after which the state’s share would increase gradually to 10 percent.

DHS’ latest figures show that under the private option the state would save an estimated $30.7 million in fiscal year 2014, $151 million in fiscal year 2015, and $176 million in fiscal year 2016.

After that, the savings would begin to decrease as the state began paying a share of the cost. The first year that the state would not see a savings would be fiscal year 2021, when the state would see an estimated cost of $8.9 million. By fiscal year 2023, the cost to the state would be $10.9 million.

The expansion is estimated to provide health insurance to about 250,000 Arkansans who now lack coverage.

House Speaker Davy Carter, R-Cabot, said Wednesday he needed to study the estimates more, but “it’s my understanding that they were favorable numbers — and possibly could be even better when some of the reform measures get folded into that.”

Asked how the new information affects the debate over expansion, Carter said it should help to move things forward.

“I think that certainly helps the progress of dealing with the health care issue. We have to make sure that we operate under a framework that, it’s a good fiscal decision for the state, and those numbers seem to support that,” he said.

Legislative leaders have said they intend to pass about $100 million worth of tax cuts this session. They have cited the savings from the mostly federally funded health care expansion as a way to help pay for the cuts, along with trimming growth in government spending.