Addressing the Arkansas Medicaid Crisis

Arkansas Medicaid costs are reaching a tipping point, with a major funding shortfall projected in the very near future. Lawmakers seeking to reform the system should look to Florida, where a Medicaid reform pilot program has created impressive results in cost savings and improved health outcomes.

In Arkansas, state officials now predict a Medicaid shortfall of around $300 million in FY 2014, which begins a little more than a year from today. As Senator Jonathan Dismang noted in a March 5 Arkansas News Bureau interview, the 2013 legislative session may “set down a $250 million to $400 million bill on the desks of new members and tell them to ‘See what you can figure out.’ ”

In this climate of strained government budgets, lawmakers should pay special attention to Florida’s record of success in controlling Medicaid costs: the Sunshine State has made tremendous strides in reforming Medicaid in recent years to make the program both less expensive and more responsive to client needs.

For more information about Florida's reforms, check out our latest policy paper.

Our Latest Policy Bulletins

Check out our latest policy bulletins:

• April 25
• April 18
• April 11
• April 5
• March 19
• March 12
• March 6
• February 29

What is the risk of a "runaway constitutional convention"?

How can Arkansas state legislators force Congress to hold back on federal debt limit increases? Our newest paper argues that Arkansas state legislators can have a beneficial impact on Congress by proposing changes to our federal Constitution.

In Arkansas, State Senator Jason Rapert has recently introduced SJR 1, the National Debt Relief Amendment. This resolution is a call for a convention, under Article V of the federal Constitution, to consider a federal constitutional amendment – one that would block any increase in the federal debt unless that increase had been approved by a majority of state legislatures. Two-thirds of the states must call for a convention in order to trigger Article V: two other states have already passed similar resolutions, and so the passage of this resolution by 31 more states would trigger an Article V convention (also known as an "amendments convention‟).

The NDRA proposal raises many questions of policy and law. Some constitutional experts argue that an Article V convention might become a “runaway convention” that could ultimately create major changes in the Constitution, while other experts argue that this could never happen. But a few indisputable facts are worth noting.

Read our full report here.

Putting the brakes on spending

 The goal of the leadership in the House and the Senate, as well as the goal of Gov. Mike Beebe, is to write their own political preferences into law. Only one impediment stands in the way of this goal: the leadership must convince a majority of legislators — usually 75 percent in both houses — to go along with them.

The best way for the leadership to accomplish their goal is to keep the fiscal session as short and as simple as possible. The ideal situation for the leadership during the session would allow for no analysis, no discussion, and no publicity of the many choices that the fiscal session offers to policymakers. The leadership would prefer legislators to show up for the fiscal session, vote to approve every spending authorization on the agenda without examination, approve the version of the Revenue Stabilization Act that the leadership writes, congratulate themselves on a job well done, and go home.

But legislators who wish to exercise their constitutional responsibilities and their own independent judgment should follow a different path. Those who are committed to reducing the size and scope of government, and relieving the burden on Arkansas taxpayers, should consider the five strategic recommendations in our newest paper.

Policy Bulletin Archives

AAI publishes a weekly policy bulletin.  You can review our most recent bulletins here:

• February 22
• February 15
• February 1
• January 17
• January 11
• January 5
• December 28
• December 22
• December 15

Dustin McDaniel does the right thing

When public officials make mistakes, they deserve criticism. When public officials do the right thing, they deserve praise. Arkansas Attorney General Dustin McDaniel did the right thing recently, when he announced a revised policy on the distribution of class action settlement funds. It’s a move that deserves commendation.

McDaniel's decision means good news for taxpayers.Let’s back up: This summer, McDaniel came under criticism, from this site and other media outlets, for directing funds awarded to the state from class action settlements toward charitable organizations—a practice that, many have noticed, seemed geared more toward McDaniel’s political interests than the public interest. In addition, the practice (which, to be fair, has been exercised by previous holders of the office) is arguably unconstitutional.

This month, McDaniel revised his office policy on settlement funds, effectively ending the practice of directing those funds to charities chosen by the attorney general. McDaniel’s new policy means that, in a matter of months, the state of Arkansas should ultimately have something like an extra $7 million dollars available in its budget.

For a more detailed exploration of this new policy, you can read the latest paper from the Advance Arkansas Institute (PDF). For a look at the original policy memo distributed by the AG’s office on October 11, click here (also PDF).

I can only hope that our legislators will do the right thing and dedicate these new funds not to additional state spending, but toward growth-oriented tax relief for Arkansas taxpayers. Regardless, McDaniel’s adjusting course on how legal settlement funds are handled is welcome news, and he deserves credit for making his office more accountable to the legislature and to the public.

(Cross-posted at our affiliate site, The Arkansas Project.)

Update on Friday, October 21, 2011 by Dan Greenberg

I should have said above: without the efforts of state Rep. Jane English, who unsuccessfully tried to push a law through the legislature earlier this year that would have required legislative authorization of settlement fund spending, I don't know that this ever would have happened. For a lengthier description of the previous status quo, see http://www.advancearkansas.org/advance-arkansas-institute/2011/6/10/why-is-our-attorney-general-ignoring-the-law.html below.

Once again, Obamacare stumbles in Arkansas

Rep. Mike Patterson: Official Speech Suppressor of the Arkansas General AssemblyEarlier this week, Republican legislators were asked by state Insurance Commissioner Jay Bradford to support the establishment of a state health insurance exchange; yesterday, as detailed in this excellent story by John Lyon, they turned him down.

You can read commentary at our sister site, The Arkansas Project, from David Kinkade about what Bradford’s initial request was, why it was a Trojan horse, and how Republicans reacted to it. You can also read my post over there about how committee chairman Mike Patterson did his best to block the distribution of the latest AAI report to lawmakers. By the way, about that report -- you should read it.

You should read it because the state’s political and media establishment seem convinced that unless we establish a state health insurance exchange immediately, we will have a federal exchange imposed on us shortly. There are plenty of reasons to believe that it ain’t necessarily so.

Why Obamacare is in critical condition

Earlier this year, near the close of the legislative session, the Advance Arkansas Institute argued that our state legislature should do nothing to advance Obamacare (for instance, it shouldn't establish a state insurance exchange) until some of the many uncertainties surrounding the program were clarified. In our paper analyzing the Beebe Administration's proposal to establish a state exchange, Lawmakers Who Want to Surrender Even More Control over Health Care Policy Should Love HB 2138, we argued that the inferior product that the Beebe Administration had presented to the legislature on a take-it-or-leave-it basis should be rejected, and that lawmakers should consider establishing an alternate exchange which would better serve Arkansans health care needs. (The choice that Obamacare offers is that, unless a state establishes its own exchange, the federal government will swoop in and establish one for us.)

Since then, however, the prospects for the successful implementation of health care reform have continued to worsen. The federal government issued hundreds of pages of regulations that further constrain the possibilities of efficiency in a state health care exchange, and a fascinating new paper by John Graham of the Pacific Research Institute demonstrated that it is nearly impossible that more than a third of the nation's population will be under state exchanges by the 2014 deadline. Journalist David Hogberg discovered that a bug in the federal legislation makes it impossible for federal exchanges to offer the subsidies to consumers that are supposed to make Obamacare work. The establishment of a federal exchange will be nearly impossible for an additional reason: federal funding will almost certainly be unavailable for the foreseeable future. In short, Obamacare is in critical condition, and the resources it needs for life support are unavailable.

This means that conservatives in state legislatures in Arkansas, and across the country, have it within their power to block the establishment of Obamacare. They just need to hold firm and resist the entreaties of liberals to establish an exchange on the state level. Will Arkansas legislators have the courage to let Obamacare wither and die?

Why is our attorney general ignoring the law?

John Brummett’s recent column about Arkansas Attorney General Dustin McDaniel’s questionable and self-serving use of legal settlement funds lays out the start of a good case that McDaniel is abusing his office for political gain.

Brummett asked McDaniel under what authority the attorney general had to spend settlement money, which he supposedly holds in trust for the people of Arkansas, to fund a new branch of his own office that would investigate computer sex crimes.

McDaniel replied that his actions were justified by cy pres, which “he called a time-honored judicial doctrine that holds that settlement dollars ought to go toward addressing the failings made evident by the lawsuit.”

McDaniel is simply wrong, and his interpretation of cy pres represents a perversion of the legal doctrine. I’ve laid out the case against McDaniel’s misapplication of the doctrine in a paper here (opens in PDF).

The larger problem that McDaniel’s actions illuminate is the establishment of an essentially unchecked fourth branch of government in the AG’s office, in which the office seizes for itself executive, legislative, and judicial powers.

McDaniel insists that it is his prerogative both to redirect and to spend public money, powers that are conventionally confined to judges and legislators. McDaniel, although hardly the first AG to exploit the office’s authority for political gain, seems intent on pushing the envelope.

At a wonderfully hypocritical February 2010 press conference where he first announced the settlement, McDaniel alleged that the Zyprexa manufacturers “didn’t care what they were doing to taxpayers.” The same thing could easily be said about McDaniel. Check out my paper for more detail.

(Cross-posted at The Arkansas Project.)

Update on Thursday, October 20, 2011 by Dan Greenberg

Update: McDaniel did the right thing and changed the policy of the office.

The devil is in the details

There aren’t many Arkansans who think gas prices are too low. But a new federal tax proposal threatens to force fuel prices even higher.

Last month, two respected U.S. senators introduced legislation intended to cut taxes, spur economic growth, and reduce the interference of the tax code in our economy. The Wyden-Coats Bipartisan Tax Fairness & Simplification Act of 2011 would enact many worthwhile tax policies – such as reducing and simplifying tax brackets, lowering the corporate tax rate, and getting rid of the alternative minimum tax. But one deficiency in the Act demonstrates an important lesson of tax reform – namely, that just one change in the tax code that gets the details wrong can counterbalance the good effects of praiseworthy policies. In short, the devil is in the details.

More particularly, the Act contains one proposed change in the tax code that would not only make our economy less productive and our tax code more unfair, but could also raise fuel prices and threaten America’s energy security. For more information, read the newest AAI Arkansas Alert: Don't Be Fooled by "Tax Reform" That Raises Taxes on Energy and Raises Prices at the Gas Pump.