LITTLE ROCK, Ark. (AP) - Arkansas senators passed a key budget bill Wednesday night that would allow the state to expand private insurance coverage using federal Medicaid dollars under a model that other states are watching as an alternative to expanding Medicaid.
Votes were expected later Wednesday on bills laying out the framework for the "private option" plan. Both chambers had passed versions previously, but recalled them from the governor to make them more palatable to skeptical Republicans whose votes were needed to pass the accompanying budget bill. Senators voted 28-7 on the budget plan - one more vote than necessary - after provisions were added to protect small businesses from penalties and extend health-savings accounts to more low-income Arkansans.
Gov. Mike Beebe said approval of the budget bill was a victory for Arkansans as well as the state's businesses and hospitals.
"It's taking something that most Arkansans would never have approved and making it better," Beebe told reporters after the Senate approved the budget bill. "And making it fit for Arkansas."
A senator who had opposed the bills signed on as a co-sponsor as the House approved amendments Wednesday night.
"My problems with the bill before this was just to make sure that we stay in control and we are doing something that is transformative for the state of Arkansas, that will go toward job creation, that will protect taxpayers, that will protect patients and make sure patients have ultimate freedom in their health care," said Sen. Missy Irvin, R-Mountain View.
She said the amendments would give the state more control over the program and protect businesses.
The Obama administration has told Arkansas its proposal was consistent with Medicaid's requirements but U.S. Health and Human Services Secretary Kathleen Sebelius has stopped short of giving final approval.
Beebe said legislators asked that the bills be returned so they could be amended to add protection for small-business owners whose workers will be covered by the private-option from penalties for not providing the insurance for all their workers and to allow Arkansans covered by Medicaid-funded private insurance to set aside funds for health-savings accounts. The savings accounts let people set aside money on a tax-free basis for medical care.
House Public Health Committee Chairman John Burris, R-Harrison, said the amendments will give the state more flexibility over the private option program and would give the state more protections and his panel approved the changes Wednesday evening.
"If you supported the bill before, you should be thrilled to support it now," Burris told House members before the vote. "If you didn't support it before, I think you might have reason to support it now."
Beebe said he was confident that the changes would help the entire program pass the Legislature. The federal government would have to consider whether the changes would still meet its guidelines.
The proposal calls for Arkansas to accept money intended for Medicaid expansion under the federal health care law and instead use it to subsidize private insurance for the 250,000 eligible low-income residents.
Associated Press Writer Andrew DeMillo contributed to this report.
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