307,878 in Medicaid add-on

Total tops prediction; change needed, Hutchinson says

The number of Arkansans who had completed enrollment in the state’s Medicaid expanded program reached 307,878 at the end of last month, exceeding by more than 50,000 state officials’ initial estimate of those who would be eligible.

The number covered under the program as of July 31 could be even higher because the enrollment total didn’t include applicants who had been deemed eligible but who had not yet completed enrollment.

The figures released Tuesday by the state Department of Human Services came after a consultant’s report to the Health Reform Legislative Task Force on Monday that the number of Arkansans enrolled in the private option, the state’s primary method of providing expanded Medicaid coverage, had grown to more than 258,000 as of June 15.

Gov. Asa Hutchinson said in a statement Tuesday that the enrollment figures illustrate the need for changes to the private option that he hopes to make starting next year, when the program will be named Arkansas Works.

Those changes include charging enrollees premiums of about $13 a month and providing coverage to some enrollees through subsidized, employer-based plans instead of through the private option.

“We’re concerned about the growing numbers and controlling costs, and that is one of the reasons that the reforms under Arkansas Works are very important,” Hutchinson said.

State officials hope to receive federal approval for the change next month.

Tuesday’s numbers also include Arkansans covered under expanded Medicaid but assigned to the traditional, fee-for-service Medicaid program because they are considered “medically frail,” meaning they need health care services that private plans don’t typically cover.

The larger total also includes Arkansans who had completed enrollment in the private option after June 15 and were being covered under fee-for-service Medicaid while they waited for the private coverage to kick in Aug. 1.

The total excludes those who had been approved for coverage and were being temporarily covered under fee-for-service Medicaid because they had not yet completed enrollment.

For example, figures released by the Human Services Department in June showed that as of April 30, more than 292,000 Arkansans had been approved for coverage under expanded Medicaid, but only about 283,000 had completed enrollment.

Brandi Hinkle, a department spokesman, said she didn’t have information Tuesday on the number of applicants who had been approved for coverage but had not completed enrollment as of July 31.

Authorized by the 2010 Patient Protection and Affordable Care Act and approved by the state Legislature and then-Gov. Mike Beebe in 2013, the expansion of Arkansas’ Medicaid program extended coverage to adults with incomes of up to 138 percent of the poverty level.

This year, that eligibility cutoff is $16,394 for an individual or $33,534 for a family of four.

Under the private option, the state uses Medicaid funds to buy coverage on the state’s health insurance exchange for the newly eligible adults.

The federal government has paid the full cost of the expanded Medicaid program since the coverage started in 2014.

Arkansas will be responsible for 5 percent of the cost next year. The state’s share will then increase every year until it reaches 10 percent in 2020.

State officials initially estimated the expansion would make 250,000 Arkansans eligible for coverage.

State Medicaid Director Dawn Stehle has said enrollment has exceeded that estimate in part because of a decline in employers offering job-based coverage and a greater-than-expected enrollment in expanded Medicaid by people who could have qualified even before the expansion.

Department of Human Services officials have said, for instance, that some people with disabilities can obtain coverage

directly through the expanded Medicaid program instead of having to apply for federal disability benefits first.

Hutchinson also said Tuesday that he hopes the election of a new president this fall will give the state even more “flexibility to have more control over costs and the numbers.”

Hutchinson spokesman J.R. Davis also noted that increasing enrollment in expanded Medicaid doesn’t necessarily mean higher costs for the state.

For instance, when people with disabilities obtain coverage through the traditional Medicaid program for the disabled, the state pays 30 percent of the cost of their coverage. If the same people enroll directly in the expanded Medicaid program, without applying for disability benefits, the federal government will pay the full cost of their coverage this year, and 95 percent of the cost next year.

Davis said Hutchinson also remains committed to reducing the growth of spending in the state’s traditional Medicaid program to help pay for the state’s share of the expanded program.

In May, for instance, Hutchinson and representatives of the state’s nursing-home industry signed a pledge to save $250 million by curbing the growth of state and federal spending for traditional

Medicaid over five years.

Stehle said in June that the state’s share of the cost for the expanded Medicaid program is expected to total $43 million in the fiscal year that ends June 30, 2017.

State premium taxes collected on private-option plans and other plans on the state’s health insurance exchange are expected to cover some of the cost.

In the fiscal year that ended June 30, those taxes totaled $23.7 million, Jake Bleed, a spokesman for the state Department of Finance and Administration, said Tuesday.

The taxes are being held in a trust fund established by the Legislature to help pay the state’s share of the expanded Medicaid program. The fund has a balance of $30.7 million, Bleed said.

Sen. Jim Hendren, R-Sulphur Springs and chairman of the Health Reform Legislative Task Force, which was formed last year to recommend changes to the private option and other state Medicaid programs, said he’s less concerned about the growth in enrollment in expanded Medicaid than he is about the effect of the private option on the state’s insurance market.

Insurance companies offering plans on the exchange have received approval from state’s Insurance Commissioner Allen Kerr to increase rates an average

of 9.1 percent next year.

Kerr said at a task force meeting on Monday that the companies will likely need a bigger increase in 2018 to keep up with the cost of enrollees’ medical care.

To help control costs, Hendren has said he would like make changes such as adding a deductible to private option plans or imposing a charge for enrollees who visit the emergency room, but federal officials have indicated they won’t approve such changes.

“The writing is so clear on the wall that if there are not major changes made in the way this Affordable Care Act is administered, it’s going to crumble,” Hendren said.