LITTLE ROCK — Gov. Mike Beebe told lawmakers Tuesday that the state’s Medicaid shortfall would be less troublesome than projected, making some previously proposed cuts in human services unnecessary.
Speaking to a Republican-led Legislature, Beebe also urged legislators expand Medicaid to provide basic health insurance for thousands of Arkansas’ working poor, a move GOP lawmakers have resisted.
Republicans hold majorities in the House and Senate for the first time in modern Arkansas politics. Beebe admonished lawmakers to work across party lines for the good of the state and avoid congressional-style gridlock.
“We must resolve not to let Washington’s animosity seep in and poison our well of civil discourse,” he said in his state-of-the-state address to a joint session of the House and Senate.
Beebe provided no new estimate of the shortfall, previously projected at $139 million, but said he now believes it will not be necessary to make the most severe cuts that had been proposed, including the elimination of coverage for nursing home care for people who need limited assistance with daily needs.
“Those of you that provided leadership in the House and in the Senate, together with our office, are of one mind that the last thing we will ever do is throw folks out of nursing homes,” Beebe said to loud applause.
He said the shortfall “is not going to vanish but it appears that it will be more manageable.”
Beebe has proposed using a combination of surplus funds, general revenue, efficiency measures and cuts to services to address the shortfall. The leaders of the House and Senate have said they want to address the Medicaid shortfall by using a larger share of the surplus than Beebe has proposed and making no cuts to services.
A Beebe spokesman said later that a new estimate of the shortfall is not yet available.
The governor also made a pitch for the expansion of Arkansas’ Medicaid program under the federal Affordable Care act, which Republican legislators, now in a majority in the Legislature for the first time in modern Arkansas politics, generally oppose.
Beebe said Arkansas is now ranked as one of the best places in the country to start a small business, but he said that could change if the state turns down a Medicaid expansion that would extend coverage to up to 250,000 Arkansans at the federal government’s full expense for the first three years with the state’s share gradually rising to 10 percent.
“If we have no insurance options available for our low-income workers while more and more other states add those options, it will make us less business-friendly in comparison,” Beebe said.
He also said the expansion would help address the problem of uncompensated care, which he said is placing increasing financial pressure on hospitals across the state.
“We have the opportunity before us to ease that pressure,” he said.
He urged lawmakers not to reject the expansion in order to send a message to Congress about the national debt, saying that solving the debt “needs to be done in Washington.”
The governor outlined some of his other goals for the session, including passing a bill that would lower the state sales tax on groceries to its lowest possible level, contingent upon certain financial obligations ending. Republican legislators have other tax cuts they want to propose.
Beebe said his top priorities remain education and economic development. He said he wants to increase funding for public schools, the state Department of Correction and the state Forestry Commission; make a modest increase in higher education funding; help the children and spouses of people in the military transition into schools and jobs; and give a 2 percent cost-of-living adjustment to state employees.
After Beebe’s speech, House Speaker Davy Carter, R-Cabot, said the governor apparently is comfortable with estimates of the impact of Medicaid expansion, but legislators have more studying to do.
“All of the membership needs to get as comfortable with the numbers as the governor is,” he said.
Asked about Beebe’s comments on Arkansas becoming less competitive if it does not expand Medicaid, Carter said, “I’m always concerned about Arkansas being competitive. Certainly that’s a factor, but that’s not the only factor that goes into that thought process.”
Carter said he understands that the federal debt has to be addressed in Washington, but he said that the debt could affect the federal government’s ability to maintain its commitment to Medicaid in the future.
“In that context, the federal deficit and the debt does matter. There are no guarantees that it’s going to be a 90-10 split forever,” he said.
Rep. Bruce Westerman, R-Hot Springs, the House majority leader, expressed skepticism about the state having 250,000 working poor who would be added to the Medicaid roles if it is expanded. He also questioned whether the state Department of Human Services could handle the additional workload.
The House majority leader said the state should concentrate on eliminating waste and fraud in Medicaid, and he said he and other lawmakers would file legislation to do so later.
“You know we didn’t end up in this shortfall for no reason at all,” Westerman said. “I believe there are problems inside the system and we need to work on and get those fixed before we start talking about expanding.”
Beebe told reporters after his speech he realizes there is probably some fraud and waste in the Medicaid system, but that such instances are prosecuted when caught. He said the attorney general has a special unit that investigates Medicaid fraud.
Eliminating fraud “is not going to be the huge money savings that some people like to say,” he said. “If we’ve got that much fraud and nobody’s caught it yet, we ought to fire everybody who has been looking for fraud. It’s something that not just this administration but every administration has constantly fought, every Legislature has fought, so if we’ve got some new tools to use to fight it, we ought to be able to employ them.”
Elsewhere Tuesday, the Senate State Agencies and Governmental Affairs Committee endorsed legislation by Sen. Eddie Williams, R-Cabot, which would allow spouses of personnel stationed at military installations in Arkansas to transfer any professional licenses or degrees in health care or education they might have in other states.
“Right now, it could take up to a year to get their certification or license (in Arkansas), and this would allow them to come and immediately go to work,” Williams said.