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Arkansas fails to muster Medicaid compromise seen as U.S. model

Arkansas governor Mike Beebe looks on during a Martin Luther King Jr. service in Little Rock, Arkansas in this January 15, 2013 Governor's o
Arkansas governor Mike Beebe looks on during a Martin Luther King Jr. service in Little Rock, Arkansas in this January 15, 2013 Governor's o

By Suzi Parker

LITTLE ROCK, Arkansas (Reuters) - Arkansas lawmakers rejected on Monday a compromise measure that would have extended health insurance to more of its low-income citizens, turning back what some saw as a possible model for other states also wrestling with opposition to U.S. government expansion plans for Medicaid.

The measure failed to attract the 75 votes needed in the Republican-dominated Arkansas House of Representatives, drawing 69 votes for, 28 against and one abstention. Proponents plan to try again Tuesday and are scrambling to convert more votes, said Jay Barth, a political science professor at Hendrix College in Conway, Arkansas.

"There is a strong sense that the votes are there to do this but that the political pressure being felt by members who plan to seek either reelection or another office in the near future is very intense," Barth said.

The Arkansas plan has been closely watched around the United States as a potential watershed for President Barack Obama's sweeping Medicaid expansion, a major provision of the Patient Protection and Affordable Care Act that aims to extend health coverage to at least 12 million low-income Americans by the end of the decade.

Arkansas Governor Mike Beebe, a Democrat, spearheaded the plan, which would use Medicaid funds to buy private insurance to expand coverage to state residents who earn up to 133 percent of the poverty line, or $15,415 per year. The insurance would be purchased through a health insurance exchange that the federal government is scheduled to begin operating with Arkansas on January 1, 2014.

The online marketplace would allow people with incomes of up to 400 percent of the poverty line to obtain private coverage at federally subsidized rates.

"He's of course disappointed, but not done yet," Matt DeCample, a spokesman for Beebe, said.

The Arkansas plan has excited interest among some conservatives in states such as Texas and Louisiana who view the use of Medicaid money to buy private insurance as a way to help the most vulnerable without a major government expansion.

Marilyn Tavenner, a top U.S. health official who oversees Medicaid, Medicare for the elderly and the implementation of "Obamacare" for the administration, said last week that Arkansas state officials brought the idea to the administration and that U.S. officials are now discussing the idea with a handful of states.

President Obama's healthcare reform law has run into stiff political resistance in Republican-controlled states, particularly in the South, where leaders have been unwilling to expand Medicaid or set up their own health exchanges.

Provisions of the reform law have been challenged in court cases around the country. And in a ruling last June, the U.S. Supreme Court upheld the healthcare reform law on constitutional grounds but allowed states to opt out of the Medicaid expansion.

The expansion has since been accepted by governors in about half of the 50 U.S. states.

(Reporting by Suzi Parker in Little Rock, David Morgan in Washington and Michele Gershberg in New York; Writing by Carey Gillam in Kansas City; Editing by Tim Dobbyn)

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