Nevada County Picayune and Gurdon Times Newspaper Archive

Governor Endorses Health Care Spending Plan

MIKE ROSS

STATE SENATOR, DISTRICT 3

A major health care spending plan, paid for with revenues from the state's settlement of a lawsuit against tobacco companies, has been endorsed by the governor, high ranking health care officials and leadership in the state Senate.

The state is expected to receive $1.62 billion over the next 25 years from cigarette manufacturers. The spending plan would allocate revenues into four major categories:

• programs to prevent young people from smoking and to help smokers quit the habit;
• expanding Medicaid eligibility, so that more people who have no private insurance are covered by the government health program;
• funding of medical and bio-technical research; and
• improving health education, through the establishment of a biosciences institute and a new school for public health.

Using the tobacco settlement to expand Medicaid eligibility would leverage more funding from the federal government. Under a cost-sharing formula based on the state's per capita income and other measures of prosperity, Arkansas receives a 3-to-1 match in Medicaid spending. That means that for each dollar the state spends on Medicaid, the federal government spends an additional three dollars.

Medicaid is a government subsidized program that pays for health care for the elderly, the poor and people with disabilities.

The program, backed by the governor and Senate leaders, would gradually expand Medicaid eligibility for pregnant women. In the long run it is cost effective to provide prenatal care, because it prevents more serious and expensive medical problems from developing.

The plan also calls for providing eligible people 65 and older with help in paying for prescription drugs. Also, the proposal would gradually expand eligibility for people of all ages who need by cannot pay for medical and hospital care.

The director of the Arkansas Department of Health and the chancellor of the University of Arkansas for Medical Services were instrumental in putting together the plan. It has the backing of many private health care providers, as well as non-profit groups. The governor and leading legislators believe that revenues from the tobacco settlement should be spent on health programs. The state filed the lawsuit against cigarette companies to seek compensation for the cost of treating smoking related illnesses.

The plan is not without controversy. Some members of the House of Representatives advocate a different method of receiving the money from tobacco companies. They prefer to issue bonds, or a similar type of financial instrument, to get the bulk of the tobacco money immediately. The plan would also guarantee that the state would receive the full $1.62 billion. House leaders point out that the settlement payments will decrease if cigarette consumption decreases, or if tobacco companies go bankrupt.

Some Senate leaders are unwilling to issue bonds, because of the large amount in interest the state would have to pay lenders. They note that the state will pay even more in interest if private investors assume the risks of declining tobacco payments.