The fiscal session in Feburary is likely to be dominated by questions about funding for the “private option” for Medicaid expansion.
The policy — which uses Medicaid funds via the Affordable Care Act to fully cover the premiums of private health insurance — requires a three-fourths supermajority of the General Assembly to approve the appropriation.
Before the holidays, I had a long chat with Rep. Joe Farrer (R-Austin). The arch-conservative Farrer, a physical therapist, is vehemently opposed to the “private option” and will likely be right in the middle of the fight to defund the policy. Below the jump, a lightly edited transcript of our conversation on the politics and policy of the “private option.” Farrer makes his predictions for what will happen in the defund battle and parses the politics of the coming battle, including his willingness to block the entire DHS budget to stop the “private option” and the possibility of a state funding shutdown. He also touches on the split within his party over this issue, Davy Carter‘s rise to House Speaker (Farrer believes Gov. Mike Beebe was involved), why he thinks a single payer system in the United States (which he opposes) is inevitable, and much more.
Arkansas Times: I know you had some frustration about how the “private option” legislation happened.
Joe Farrer: We were given the bill in a real short time. We didn’t have a long time to look at it. Now we’re finding out as time goes on, there was more in the waiver than was in the bill. Now things are changing in Washington. What I’m trying to figure out: How is that affecting the Arkansas plan? There’s a lot of things that have changed. Just to talk about a couple of them — we’ve been expanding Medicaid rolls and we were told that we would not expand Medicaid rolls. That’s one thing that has changed for us. The further this goes on the more we find out. I don’t want to call them lies, but what we were told is not quite what’s happening.
AT: When you said there was more in the waiver than was in the bill, what specifically is something that bothers you or concerns you about the way the policy has been enacted?
JF: Auto-assignment was one of the real big parts of it [for more on auto-assignment see here and here]. That’s not in the bill at all. To me the name of the bill itself is the Healthcare Independence Act. Well it’s not real independent when you’re making people get insurance.
AT: Well they’re not being forced to get insurance, but if they don’t pick a plan it gets picked for them.
JF: Well, right, and that’s a question I had that no one’s answered it yet. What if this person has gotten auto-assigned — but if they get that letter, that second letter comes out and says you are enrolled? Let’s say they get enrolled and don’t want the insurance. They say “I don’t want insurance,” for whatever reason. Can they get out of it? I don’t know the answer to that. And I can’t get anybody to find out.
AT: Wait, can I say this — the people getting auto-assigned, they’ve said they want insurance.
JF: Well, they sent the card back in right?
AT: They signed something that said, sign me up.
JF: Okay, well let me word it differently. What if they change their mind? Can they get out of it? Maybe they have a revelation and say you know what, I don’t want this. For some reason they change their mind. Can they get out of it? I don’t know. [*see update below]
AT: I know Sen. Bryan King is pushing this audit of the “private option.” Is your feeling that you’re not getting the answers you need about how the policy is being implemented?
JF: The longer we go in this, we find out different things that we didn’t know. I feel like if Washington had done an audit we probably wouldn’t be where we’re at here today either. I’m liking what Bryan’s doing by doing the audit on it so we can find out where we are. And you know just as well as I do that if the old are the only ones that sign up for this, than we don’t meet budget neutrality [for more on budget neutrality see here]. Well if we don’t meet budget neutrality, Arkansas has got to pay that money back. My problem is I don’t know where we’re at right now. I don’t know how many different numbers or how many people are enrolled. The paper the other day had 170. Then I heard 250. Couple of weeks ago I heard 4,000. We don’t know. Every time we open the paper up it’s a different number.
AT: I want to clarify this because I do think it gets confused. There’s the number of people enrolled in the regular marketplace and as you say, that’s a very low number so far. But the “private option” part, the enrollment for that is quite high, more than 60,000 already. … You have the private option track and then you have the other Obamacare track, and the enrollment process is different for both of them.
JF: I agree. And I think that’s where people are getting confused. And some people are calling it Medicaid, some people are calling it the “private option” You have all different terms, and they’re all getting confused. My problem is I would like to know the demographics of these people. What’s the age? Where are we at with budget neutrality? Are we even close? What number do we have to meet that? That’s what I’d like to have audited right there. Are we close to that? If we’re not, then we’ve got a big problem coming. Where is this money going to come from?
AT: You’re sort of describing things being different than what you were pitched and new things coming up. But at the same time, as we both know, you opposed this from the get-go. You’re framing this as frustration with surprises, but on some level this is just not a policy you support.
JF: Right. I think there’s a better way to give health insurance to people and this is not it. I’m in health care. I want people to have care. I don’t want to give the care to someone that breaks the state either. To me, without knowing the numbers, I think that’s where we’re headed because of things that’s going on in Washington, things we’re finding out now. For example, we didn’t know that they were going to cut specialist reimbursement rates [see here for more on specialist reimbursement rates under the “private option”]….
You know just as well as I do that we’re steering to a single payer system. I think, this is just speeding the process up a little bit, to me. The only way you can balance this out is to cut prices to the physicians or raise premium rates. When you cut prices to physicians, they’re going to go away.
AT: I’m always a little surprised to hear that from conservatives. You feel like basically a single payer system is inevitable?
JF: I’m pretty sure it is because here’s the reason. When you can’t make money in medicine — then, the state hospitals or whatever — you’re becoming an employee of the state hospitals. That’s the only ones that really…this is just my theory. If hospitals can’t make money, and physicians and providers can’t make money, well then you have state hospitals. Because they’re state funded. Then people get care there. And providers become employees of the state. That’s a single payer system. How else does it work if providers and the hospitals don’t make money on this?
AT: I have to ask — if you think the single payer system is inevitable — what are you fighting? You want to hold it off as long as possible?
JF: Yeah, I have a friend of mine who’s an orthopedic surgeon from Canada. He’s down here practicing. He told me this is what happened in Canada 10 years ago [Canada has actually had a single-payer system for decades]. This is exactly how it started in Canada. Now look at it, they’re in a single payer system. He sees it coming. He’s from here. He left there to come down here because he couldn’t make as much money there. This guy’s from a socialist — well, Canada. I don’t want to be an employee of the state as a provider. I’m a free market business man.
AT: Let’s switch gears to the politics of this. The “private option” will be the big issue hanging over the fiscal session. What’s going to happen?
JF: I haven’t been in politics that long, so forgive me on this. What I’ve learned since I’ve been up there, it’s going to be a political game. I imagine what they’ll do, they’ll tie the “private option” to the DHS budget and then they’re going to sell it as, if you don’t vote for this you’re going to be taking money away from the kids and the grandmas in the nursing home. Personally I’d like to see it separated and voted on its own merit. Because I think right now the minds of a lot of people have been changed. Just for the reasons that I’ve said. Washington, what is going on. The things we’re finding out as time goes. A lot of people will have changed.
AT: When you say Washington, and this gets back to what we were talking about earlier with the two different tracks, a lot of the fight in Washington is about the other part of Obamacare. The part of Obamacare that the state doesn’t have control over. But has anything really changed on the Medicaid expansion part, the “private option” part? It’s happening. It’s being implemented, right?
JF: It is. They are tied. The “private option” goes by the Affordable Care Act rules. What if the “private option” would have come in and said we’re going to be below the Bronze level plan, let’s give everybody catastrophic plans. The “private option” is Obamacare. If the state had the option of coming up with their own plan, I don’t think we would be giving them a Silver plan. We weren’t given the option to develop our own plan. We took Obamacare and made it a plan.
AT: I agree with you that they’re going to try to tie the “private option” to the DHS budget. I did a little bit of reporting on this and if they do that — if enough people in Joint Budget say we’re not going to separate it in the way you’d like — there’s not much you can do about it. What’s the way out? Would you be prepared to vote to defund all of DHS in order to stop the “private option”?
JF: Yes, I would. I’m one of those real conservative guys. It’s a political game up there. It’s basically a game of chicken. Which one is going to give first. Do we say no until July? We’re funded until July. And then when July comes around, okay, who’s going to blink first in July?
AT: It’s possible that we could have a shutdown situation almost like they had in D.C.?
JF: Probably. Possibly. I’ve been hearing that they would actually pull it out and let it vote separately. I don’t know how true that is.
AT: Let’s assume that there’s a way around the logistical hurdles and they allow a separate vote like you want. The key for y’all would be peeling off votes. You’ve said that there are people that might flip. But I keep hearing people say that lawmakers will flip but they don’t give a name. Have you communicated with people that voted for the appropriation before that you think will turn their vote around now.
JF: I have talked to a couple that have changed their mind. I’m not going to give you a name. But I have spoken to some that have said, “What did I do?” “If I had known then what I know now.” That kind of thing.
AT: What do you think it says that no one has publicly said that? Are people just playing it close to the vest?
JF: I think it’s a political game. I’m terrible at this politics stuff. I see a lot of non-committed up there until that time. Whether they’re playing both sides of the fence on that, I don’t know. They may be telling me that and then telling someone else something else.
AT: If you had to predict, is there a three-fourths supermajority for the appropriation?
JF: If the vote was taken today, I would say no.
AT: Obviously this has been a challenging thing for the Republican Party in Arkansas. All the Democrats voted one way, whereas the GOP caucus got split. Do you have frustration with Speaker Carter and other Republicans pushing the “private option”?
JF: I hate that it split the Republican Party. This is the first time in 138 years that we’ve had the majority. Now we’re split. Personally, I think this was probably set up before I got there. I think this was planned, they thought ahead before we got there. I think Davy was part of the plan.
AT: Do you think Beebe was involved in Carter ending up Speaker?
JF: I think there was some dealings made, yes. Because it happened so quick. Why all of a sudden you had no interest in being Speaker, then all of a sudden, I think I’ll be Speaker. I’m a freshman, I wasn’t there when all of this was going on, I don’t know. I’m just going by, [Carter] wasn’t that interested in being Speaker before. My theory is: what changed?
AT: With this split, is this something you try to mend? Is this something where you just feel strongly about this issue and you have to fight it out with these guys? How do you navigate that?
JF: I think the “private option” split the party. There will have to be something that joins us back together. I don’t know what that is. This session we were together on abortion. We were together on Voter ID. We stood as one then. We need some big issue that’s going to bring us back together again as a party. We’re too far apart on this. In Little Rock, they’re called the real conservatives and the conservatives. I don’t want to use that term. That split right there is the “private option” split. Most issues run down party lines. How we mend that, I don’t know. I’d like to be a strong party again.
AT: The first time we had the “private option” fight, it was about whether we were going to add people to this new program. When we fight this again in February — right now, we have more than 60,000 set to be enrolled and by February I wouldn’t be surprised if it was 150,000 or more — won’t that make it politically difficult to defund the policy? There’s a difference between saying you can’t have something and taking something away.
JF: You’re right. Instead of adding them on there we’re going to be taking them off.
AT: That’s my question. Is that politically tenable?
JF: Good question. Personally I’d like to see this stopped before we have them all enrolled. Once you give them an entitlement (I know it’s supposed to not be an “entitlement”), once you give an entitlement it’s hard to take it away. It really is. How is that going to affect somebody politically? Again, in my district— it kind of depends on who you represent. In my district, most of them are like me, they’re so ultra-conservative that it doesn’t matter. If I went in there and I voted not to de-fund the “private option,” they wouldn’t care what the reason was. That’s my people, that’s who I represent. Now you go somewhere around south Arkansas, it would be a totally different thing. That’s a hard question.
AT: I hear you that you wish you could nip it in the bud before enrollment starts, but the reality is that when y’all are voting on this in February, there’s going to be lots of people enrolled.
JF: It’s going to be politically hard for some people to make that decision. I can’t answer that for everybody. I know, because of the people that I represent, I know how I’m going to vote. It’s going to be tough for some people, it really is.
AT: Let’s say we have 150,000 people enrolled and then the legislature pulls back. What happens to those people? Do you have any sense of a plan? Or are we just back to the status quo?
JF: Well if the “private option” goes away, these people — then it goes to the Affordable Care Act. Now, it wouldn’t be Medicaid expansion.
AT: It’s true that there would be some people that could go to the exchange. But people under the poverty line can’t get subsidies if we don’t do the “private option” or Medicaid expansion. They’ll just be stuck. I was at a committee meeting where Rep. David Meeks asked DHS what’s Plan B if we take this “private option” out. But Plan B is what y’all voted for, right? There will be nothing for people below the poverty line.
JF: I think we ought to come up with something. There should be a Plan B.
You know, there was nobody complaining that they didn’t have health care. The only people complaining were people that weren’t getting paid to perform the health care. We could pay the hospitals to see these people at Medicaid rates without giving them insurance.
AT: You don’t disagree that people without health insurance often have a difficult time navigating the healthcare system?
JF: I’m for pay as you go. Pay the hospitals. Go to the hospital. You’re still going to get care. I’m on the business side of health care. I cannot make a living if I see patients for free. I have a different perspective. I depend on people to pay people. I want to take care of you. But if you don’t care of the people taking care of you, who’s going to take care of you?
*UPDATE: Regarding a scenario in which “private option” beneficiaries change their minds about enrollment, as Farrer asked about above, a DHS spokesperson writes to say: “If people who said they wanted to enroll later say they don’t want coverage, we’ll take them off the rolls as requested.”