May 13, 2014
Private Option Cost Over-Runs: A “Political Stunt”?
The primary election season always brings interesting events to the public’s attention, and this year’s no different. Last Thursday, Arkansas Republican Representatives Brian King and Joe Farrer spearheaded a press conference about premium costs of the Private Option Medicaid expansion and highlighting their request for a new cost audit by an independent consultant — “somebody...
Last Thursday, Arkansas Republican Representatives Brian King and Joe Farrer spearheaded a press conference about premium costs of the Private Option Medicaid expansion and highlighting their request for a new cost audit by an independent consultant — “somebody that wasn’t involved in this (private option).”
Republican private option proponents quickly responded:
Senator David Sanders criticized the presser as a “cheap political stunt,” saying “All they’re concerned about right now is holding up signs and making grossly overstated claims and criticisms in the middle of a primary election cycle.”
Representative John Burris said it was “quite silly to ask taxpayers to pay for another actuarial study just because they didn’t like the results of the first one.”
At last week’s presser King and Farrer pointed out that the private option currently costs nearly 15% more than originally estimated by Optumas, the study firm retained by the pro-PO Arkansas Department of Human Services.
King held a sign showing “$1,000,000 over budget” — the amount King calculated by comparing per-person costs to the Optumas projection and projecting that out to a full year.
At this rate, Arkansas will spend $100 to $250 million more per year than what Optumas projected. In addition to Arkansas’ cost sharing (5% to begin with, kicking in about 2017), Arkansas must also reimburse the feds for costs above the projections in the waiver — unless the feds once again allow Arkansas to circumvent that requirement.
All these costs for a program “that was supposed to be “free” to the state for the first several years,” as The Arkansas Project puts it.
Interestingly, even the Arkansas Times says
“The state badly needs to do an updated projection …There is no reason at this point to rely on projections made in March of 2013. Before the Legislature meets next January, the state needs to produce a an up-to-date cost analysis of the private option’s impact on the state’s bottom line, both this year and going forward.”
What do YOU say?
Now that we have concrete information to study, should a cost audit be done by Optumas, contracted by Arkansas’ Department of Human Services, or by an “independent” group? Or, does it matter — is this just a primary election season stunt by private option detractors who are making “grossly overstated claims”?