Arkansas bid to im­pose Med­i­caid cost-sharing tests ad­min­is­tra­tion

Modern Healthcare - - NEWS - By Steven Ross John­son

Arkansas, the first state to es­tab­lish the con­ser­va­tive pri­vate-plan model for ex­pand­ing Med­i­caid un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act, now is look­ing to join sev­eral other con­ser­va­tive-lean­ing states in re­quir­ing low-in­come ben­e­fi­cia­ries to make monthly con­tri­bu­tions to their health cov­er­age in the form of a health sav­ings ac­count.

The state has pro­posed to the CMS that be­gin­ning in 2015, its Med­i­caid ben­e­fi­cia­ries would have to con­trib­ute to “health in­de­pen­dence ac­counts.” Peo­ple with an­nual in­comes between 50% and 99% of the fed­eral poverty level would con­trib­ute $5 a month to their ac­counts, while those earn­ing between 100% and 138% of poverty would pay between $10 and $25. The state would pro­vide a match­ing con­tri­bu­tion of $15. Money would be drawn from the ac­counts for co­pay­ments on med­i­cal ser­vices.

Fail­ure to make the monthly con­tri­bu­tions would force those earn­ing between 100% and 138% of the poverty level to pay all cost-sharing out of their own pock­ets.

Tra­di­tional Med­i­caid fea­tures lit­tle or no cost-sharing. The Arkansas waiver pro­posal also would limit non-emer­gency trans­porta­tion ben­e­fits, which is op­posed by pa­tient ad­vo­cates and health­care providers.

“It’s about try­ing to ed­u­cate this pop­u­la­tion about health­care and health­care costs and in­sur­ance and how it all works,” said Amy Webb, a spokes­woman for the Arkansas Depart­ment of Hu­man Ser­vices.

Some ob­servers say they be­lieve the Arkansas pro­posal has a rea­son­able chance of re­ceiv­ing ap­proval from the Obama ad­min­is­tra­tion, though it’s un­likely the ad­min­is­tra­tion will al­low cost-sharing for peo­ple be­low the poverty line.

The rea­son the ad­min­is­tra­tion may give it the green light is be­cause Arkansas’ Repub­li­can-con­trolled Leg­is­la­ture will need a 75% su­per­ma­jor­ity vote to re­new its Med­i­caid ex­pan­sion next year and is un­likely to do so with­out con­ser­va­tive-sup­ported changes, which law­mak­ers in­cluded as part of an ap­pro­pri­a­tions bill ear­lier this year.

If law­mak­ers don’t re­new the ex­pan­sion, more than 175,000 Arkansans would lose cov­er­age.

And the ad­min­is­tra­tion’s ef­fort to per­suade other con­ser­va­tive-lean­ing states to adopt Med­i­caid ex­pan­sion would suf­fer a big set­back. Arkansas and its Demo­cratic gover­nor, Mike Beebe, led the way in find­ing a com­pro­mise ap­proach un­der which the state uses fed­eral Med­i­caid ex­pan­sion funds to buy low-in­come adults pri­vate cov­er­age through the fed­eral in­sur­ance ex­change.

“I think it would be hard for both CMS and the state to walk away from it right now,” said Joe Touschner, se­nior health pol­icy an­a­lyst at Ge­orge­town Univer­sity’s Cen­ter for Chil­dren and Families. “I think there’s a good chance that they’ll come to some sort of an agree­ment.”

Sim­i­lar Med­i­caid health sav­ings ac­count pro­grams ex­ist in Michi­gan, which has ex­panded Med­i­caid, and In­di­ana, which has not. Michi­gan’s pro­gram ap­plies only to peo­ple earn­ing above 100% of poverty.

In­di­ana Repub­li­can Gov. Mike Pence wants to in­clude the sav­ings ac­count fea­ture in his Med­i­caid ex­pan­sion pro­posal, while Iowa re­quires a pre­mium con­tri­bu­tion for peo­ple earn­ing at least 100% of poverty.

Penn­syl­va­nia Repub­li­can Gov. Tom Cor­bett also wants to re­quire Med­i­caid ben­e­fi­cia­ries to make monthly con­tri­bu­tions as part of his pend­ing waiver re­quest for ex­pand­ing Med­i­caid.

But crit­ics say th­ese types of cost­shar­ing pro­grams will dis­cour­age peo­ple from sign­ing up for Med­i­caid and de­lay them from seek­ing needed med­i­cal ser­vices.

A decade ago, when Ore­gon required Med­i­caid ben­e­fi­cia­ries to make pre­mium con­tri­bu­tions and boosted co­pay­ments, en­roll­ment plum­meted 77% and the state’s unin­sured rate jumped. “Even mod­est co­pay­ments have a detri­men­tal ef­fect on uti­liza­tion,” said Gerald Komin­ski, direc­tor of the UCLA Cen­ter for Health Pol­icy Re­search.

In ad­di­tion, such cost-sharing can have a neg­a­tive fi­nan­cial ef­fect on health­care providers. Im­pos­ing pre­mi­ums and cost-sharing on Med­i­caid ben­e­fi­cia­ries can re­sult in de­clines in cov­er­age and uti­liza­tion that can pro­duce some sav­ings for states, ac­cord­ing to an anal­y­sis last year by the Kaiser Fam­ily Foun­da­tion.

But those changes may be off­set by ad­di­tional ad­min­is­tra­tive costs and can lead Med­i­caid pa­tients to rely more heav­ily on al­ready-strained safety net providers. In ad­di­tion, ac­cord­ing to the re­port, Med­i­caid providers fre­quently re­port dif­fi­culty col­lect­ing cost-sharing amounts, thus low­er­ing provider pay­ments.

Arkansas Gov. Mike Beebe has led state ef­forts to find a Med­i­caid ex­pan­sion so­lu­tion that con­ser­va­tives will sup­port.

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