Private option’s big shift now seen
Hutchinson: Trump key
Changes to Arkansas’ Medicaid- expansion program not allowed by the administration of then- President Barack Obama are likely to be approved under President Donald Trump, Gov. Asa Hutchinson announced Monday.
In a news conference, the governor said he will ask the federal government to allow the state to cap participation in the Arka n sa s Works Medicaid-expansion program at 100 percent of the poverty line, implement a work requirement, strengthen employersponsored health insurance and allow the state to determine who is eligible
for the program. The program provides health insurance to the state’s poorest.
Hutchinson said he is planning to call a special session — at a to- be- determined date — to handle required legislative changes. Hutchinson hopes to submit the waiver request to the federal government by June and put the changes into effect in January 2018.
Despite not knowing what changes the federal government will make to health care policy, Hutchinson said, it made sense to press forward with changes for Arkansas.
“These reforms that I’ve outlined are the same reforms that I’ve advocated to Congress, that I’ve advocated to the Trump administration,” he said. “And so I sense that this is the same direction that the reform in Washington will take.”
Hutchinson said reducing eligibility from 138 percent of the poverty line to 100 percent of the poverty line would reduce enrollment in Arkansas Works by about 60,000 people — about 20 percent of the program.
At 138 percent of the federal poverty line, the income cutoffs are at $ 16,643 for an individual and at $ 33,948 for a family of four. That would go down to about $ 12,060 for an individual and $ 24,600 for a family of four if the federal government approves the planned waiver.
Under Arkansas Works, enrollees in what has been known as the private option who have incomes above the poverty level in January began paying premiums of $ 13 a month, which is deducted from what the Medicaid program pays.
Hutchinson said those people should not worry about their future insurance coverage. Under the federal Patient Protection and Affordable Care Act, they are eligible for tax credits to cover most of their insurance cost.
Trump has promised to repeal and replace the Affordable Care Act. Hutchinson said he hasn’t heard of any plans to end heavily subsidized coverage for those between 100 percent and 138 percent of the poverty line.
But Robin Rudowitz, an associate director at the Program on Medicaid and the Uninsured at the Kaiser Family Foundation, said there’s a lot up in the air with replacement plans.
“This is coming at the time when, of course, there are these larger discussions about whether there will be tax credits and whether there will be marketplaces, and the larger issues around [ the Affordable Care Act],” she said. “All of these things are a topic of heated debate as we speak.”
The question of marketplace existence is particularly important to Arkansas, said MaryBeth Musumeci, a second associate director at the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.
Under the private option, the Medicaid program pays the premiums for enrollees in insurance plans offered on the state’s health insurance exchange.
The program also provides additional subsidies, known as cost- sharing reduction payments, to cover the plans’ deductibles as well as most or all of the enrollees’ other required out- of- pocket spending for medical care.
The Medicaid program also pays directly for nonemergency medical transportation and other so- called wraparound benefits that are required under Medicaid rules but aren’t covered by the insurance companies’ plans.
“Arkansas chose to base their expansion around the marketplace, so if that system goes away, it’s unclear how their waiver would work,” Musumeci said.
Hutchinson said shifting that population — those between 100 percent and 138 percent of the poverty line — to the exchange’s marketplace means the state won’t have to pay for any of the coverage.
The federal government is paying 95 percent of the cost for the Medicaid expansion this year. Under the Affordable Care Act, the federal share drops each year until it reaches 90 percent in 2020. The private option cost about $ 1.5 billion in 2016. If the cost stayed the same, the state would need to provide $ 150 million of the funding in 2020.
The total cost for the program has been higher than expected.
State officials initially estimated that about 250,000 Arkansans would be eligible for the Medicaid expansion. The state Department of Human Services said last week that 310,951 people are on the program, after 21,280 were terminated from the program because they were no longer eligible.
Hutchinson had long sought a work requirement for those receiving health care coverage under Arkansas Works but was rebuffed. Instead of requiring work, Arkansas refers recipients to the state Department of Workforce Services, and there is no requirement to follow up.
“The previous administration had determined that those type of requirements had not furthered the objectives of the program, which was designed to provide health coverage to individuals that met income standards,” said Rudowitz, the Kaiser Family Foundation official. “So there is a possibility that it could be subject to a legal challenge.”
Musumeci, the other foundation official, said no work requirement had ever been approved by the prior administration.
On the changes, Hutchinson said he spoke with Tom Price, the new federal secretary of health and human services, last Saturday.
“I reviewed with him the same four elements of the waiver that we will be submitting to the Trump administration for their review,” the governor said. “He listened to those, and he indicated that they’re consistent with reform efforts they want to see happen and that they will look favorably on those.”
Hutchinson said the planned work requirement would match what is now required to receive food stamps. That requirement excludes the disabled and those with dependants. It also allows people to receive work training or volunteer in their communities to fulfill the requirement.
Regarding the change to the employer- sponsored insurance requirement, Hutchinson would like the Medicaid expansion funds to pay for employee premium costs for individuals who work for small employers and make between 75 percent and 100 percent of poverty- level income.
Currently, the state is only allowed to subsidize plans with employers newly offering insurance plans, said Amy Webb, a spokesman for the Department of Human Services.
On eligibility determination, Hutchinson said the state now has the software systems in place to determine eligibility, so it should have control of that process.
Asked about the governor’s announcement, Senate President Pro Tempore Jonathan Dismang, R- Searcy, said, “I think it was a great step in the right direction.
“I think the governor is working as good as he can with the circumstances that we have right now, and, of course, that will change as things move along the federal level,” he said.
Dismang is one of three key legislators who were the architects of the private option. The others are Sen. David Sanders, R- Little Rock, and former Rep. John Burris, R- Harrison.
A three- fourths vote will be required in the House and Senate to reauthorize the use of federal and state funds for the Medicaid expansion in this year’s regular session for fiscal 2018, starting July 1.
Dismang said he “would assume that it would help the debate” for reauthorizing funding for the program.
“We are talking about 20 percent of the population moving over to the exchanges. I think that should help ease some concerns, and a real work requirement is something that a number of folks said they wanted to see in the bill in the past, so that should help,” he said.
Sen. Bart Hester, R- Cave Springs, said he plans to vote to reauthorize funding for the program this session “with the understanding that we are expecting some significant changes from the federal government.”
It would be unfair to people on the program to dramatically change the program now and then have to dramatically change the program after Trump and Congress enact a overhaul federal health care laws, he said.
House Speaker Jeremy Gillam, R- Judsonia, said he expects the coming special session to consider the changes to be narrow in scope.
“After the feds have, and Congress has dealt with, any significant changes they’re going to make, then we’ll probably have to come back and deal with something at that point anyway,” he said.
Information for this article was contributed by Michael R. Wickline and John Moritz of the Arkansas Democrat- Gazette.