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Analysis: Files' fall could imperil Arkansas Medicaid plan

By The Associated Press
This article was published February 5, 2018 at 9:35 a.m.

LITTLE ROCK (AP) — An Arkansas lawmaker's guilty plea for pocketing thousands of state dollars intended for a sports complex created a black eye for the Capitol, but it may have caused an even bigger obstacle for supporters of a hybrid Medicaid expansion that already faced an uncertain future.

Republican Sen. Jake Files submitted his resignation last week, a day after he pleaded guilty to federal wire fraud, money laundering and bank fraud charges related to his handling of state surplus money. He's the second lawmaker in a little over a year to plead guilty to federal charges of mishandling General Improvement Funds that lawmakers can steer toward local projects.

Files' departure in the coming week will leave the Senate with three vacancies and potentially a vote or two short of the 27 needed to keep the state's hybrid Medicaid expansion alive. The other two seats became vacant after a lawmaker died following a battle with cancer and another left for a job with the Trump administration. They won't be filled until special elections in May.

Gov. Asa Hutchinson acknowledged the challenge he'll face while pushing for the program's reauthorization when legislators convene next week for a session focused on the state's budget. There will also be a vacancy in the House, but that doesn't appear to affect the chances of the Department of Human Services-run program in that chamber.

"I think with the reforms we have in place, we'll be able to pass the DHS appropriation in regular order," Hutchinson told reporters last week. "We'll continue to monitor that and make decisions accordingly."

Hutchinson and other supporters of the program hope new restrictions they're trying to impose will help win over some new votes during this year's session. Arkansas is awaiting federal approval for the new limits, and the Trump administration has already said it'll approve states imposing work requirements like the one Arkansas wants to add. It's not clear whether the state will win approval for other changes, including a plan to move about 60,000 people off the program by lowering its eligibility cap.

An option Hutchinson and legislative leaders aren't ruling out specifically right now is punting, for now, on Medicaid. Some lawmakers have floated the idea of postponing a Medicaid budget bill and other appropriations measures until a special session later in the fiscal year when the vacant seats are filled, if they fall a vote or two shy.

A drawn-out fight over the program's future would put a spotlight on the expansion as political campaigns heat up for the May primary. Hutchinson faces a longshot challenge from Jan Morgan, a gun range owner and cable news commentator who has criticized the incumbent governor for the program. Other GOP lawmakers could face challenges from opponents of the program.

Morgan last week said she supports an effort by some opponents of the program to halt enrollment starting in July. The Arkansas House approved a similar freeze proposal last year, but the idea failed before a state Senate panel. It faces the hurdle of needing a two-thirds vote to even be considered in this year's session.

Files' exit may have changed the question from whether there will be a fight over the Medicaid program to when it will be waged.

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