LITTLE ROCK, Ark. (AP) — Arkansas would save $372 million over the next several years if it goes forward with an expansion of Medicaid under the federal health care law after the savings from the law and new state tax revenue are factored in, state officials said Tuesday.
The Arkansas Department of Human Services released the new numbers as Gov. Mike Beebe weighs whether to agree to the expansion. The U.S. Supreme Court last month upheld the health care law, but justices said the federal government could not take away states' existing federal Medicaid dollars if they refused to widen eligibility.
Human Services officials said the cost to the state would be more than offset by the financial benefits it would see under the health care law.
"We think the state comes out way ahead financially," Human Services Director John Selig told reporters late Tuesday afternoon.
Under the health care law, the federal government agreed to pay the full tab for the Medicaid expansion when it begins in 2014. But after three years, states must pay a gradually increasing share that tops out at 10 percent of the cost.
Human Services officials said the net cost to the state would reach about $4 million in 2021.
The agency's estimates factor in savings that they say would result from the federal health care law.
For example, they estimate that between 2014 and 2021, the state will save $359 million in spending on uncompensated care at hospitals and will see $254 million in state tax revenue connected to the additional health care spending in the state. Before the savings are factored in, the state's new Medicaid expenditures would be $684 million, the department said.
Beebe, a Democrat, has said he's inclined to go forward with the Medicaid expansion. The Health Services Department said the expansion would add 250,000 Arkansas residents to the Medicaid rolls who had not previously been covered.
A spokesman for Beebe said the governor is still leaning toward the Medicaid expansion, but said he still has questions on whether Arkansas has to continue with it later even if it faces financial problems in future years.
"Is this something we're locked into or is there some flexibility down the line?" Beebe spokesman Matt DeCample said.
Republicans in the majority-Democrat Legislature have opposed the expansion, and they expressed skepticism about the latest figures.
"I find those numbers hard to believe," said Sen. Michael Lamoureux, R-Russellville. "It would be surprising if you add people to the Medicaid rolls and cut the costs."
The department also indicated that the Medicaid expansion could help with a shortfall of up to $400 million that the state expects in the program starting in the budget year that begins July 1, 2013. Department officials said the state would see nearly $39 million in savings if it went along with the Medicaid shortfall that year.
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Andrew DeMillo can be reached at www.twitter.com/ademillo
