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New Arkansas governor says state should keep Medicaid expansion

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(Bloomberg) — Arkansas Gov. Asa Hutchinson, a Republican who opposed the Patient Protection and Affordable Care Act (PPACA) — “Obamacare” — said his state should continue with its expansion of the Medicaid program for the poor under the federal health law.

See also: Health insurance story of the year: The shoe that dropped.

The Arkansas expansion has been a model for other Republican-leaning states because of its use of commercial health plans operating in the state’s insurance exchange. Its future has been in doubt since Hutchinson was elected in November. Even with his support, the expansion — known as the “private option” in Arkansas — faces hurdles in the Republican-controlled state legislature, where three-fourths of lawmakers must vote this year to continue the coverage for about 200,000 people.

Hutchinson asked the legislature in a speech Thursday to continue the expansion through the end of 2016 and then redesign it. Expanding Medicaid, he said, had reduced visits by uninsured people to Arkansas hospitals by about 47 percent and will save the state’s taxpayers about $88 million this year.

“It has been a benefit to the state of Arkansas in terms of our budget,” Hutchinson said in the speech at the University of Arkansas for Medical Sciences in Little Rock. “But the long-term costs and the funding remain legitimate questions.”

The state would have to pay about $200 million a year starting in 2021 to keep the expansion going, he said. Instead, he said the legislature should create a “health reform task force” to design a “compassionate and reasonable cost-effective response for care of those currently on the private option.”

‘Personal responsibility’

The alternative should “minimize or eliminate” the state’s own financial obligations and encourage “accountability and personal responsibility” by people enrolled in the program, he said.

See also: Medicaid alternative architect drafting PPACA 2.0 proposal.

The secretary of the U.S. Department of Health and Human Services, Sylvia Mathews Burwell, thanked Hutchinson for backing the expansion in a letter Thursday and said she would work with him on changes to the program.

“Understandably, you want to minimize the costs of Medicaid to Arkansas taxpayers,” she wrote. “These are reasonable and achievable objectives, and I can assure you of our openness to new ideas as you consider how to pursue these interests.”

State legislators in the audience during Hutchinson’s speech appeared to offer a tepid response.

“I noticed that there was not resounding applause at any point during the speech,” he said, according to a transcript provided by his office. “I think that simply means that we recognize how important it is.”