State asks U.S. OK to adjust Medicaid

60,000 enrollees would exit expansion

The state submitted proposed changes to Arkansas’ Medicaid expansion to the Trump administration on Friday, including placing a limit on eligibility for adults that is expected to remove 60,000 enrollees from the program and adding a work requirement.

The program, known as Arkansas Works, provides health coverage to roughly 300,000 Arkansans.

Gov. Asa Hutchinson has proposed limiting eligibility to adults with incomes at or below 100 percent of the federal poverty level instead of the current 138 percent of the poverty level.

At 138 percent of the federal poverty line, the program’s current income cutoffs are at $16,643 for an individual and $33,948 for a family of four. That would go down on Jan. 1 to about $12,060 for an individual and $24,600 for a family of four if the federal government approves the waiver request.

The proposed changes also would eliminate Arkansas Works’ employer-sponsored insurance premium assistance program on Dec. 31 and allow the state to stop providing reimbursement for medical bills incurred up to three months before a Medicaid application is submitted.

“Today’s submission of waivers to the federal government is good news,” Hutchinson said in a written statement.

“It further illustrates our commitment to reform our Medicaid program to make sure it is affordable to the state and that it instills reasonable work requirements for able-bodied individuals. We are hopeful the Trump Administration will respond quickly to this waiver request,” the Republican governor said.

Together, the proposed amendments “seek to test innovative approaches to promoting personal responsibility and work, encouraging movement up the economic ladder, and facilitating transitions from Arkansas Works to employer-sponsored insurance and Marketplace coverage,” Hutchinson said in a letter dated Friday to U.S. Department of Health

and Human Services Secretary Tom Price.

The Republican-dominated Legislature in a May special session endorsed the changes, which Hutchinson said are aimed at making the Arkansas Works program sustainable.

Rich Huddleston, executive director of the Arkansas Advocates for Children and Families, said Friday that he still believes reducing the eligibility for the Arkansas Works program is “a bad idea” and the work requirements aren’t necessary.

He also said that he’s glad that Arkansas still has a Medicaid expansion program and credited Hutchinson for that.

State officials expect to hear back from the Trump administration on the request for waivers within the next 90 days, said Amy Webb, state Department of Human Services spokesman.

The state reported that in response to the proposed changes, several people expressed opposition to the waiver request, as well as concern that changing the income eligibility limit and implementing work requirements will increase the number of uninsured.

The state noted that all Arkansans currently enrolled in the Arkansas Works program “will continue to have access to coverage when the waiver amendment is implemented.”

Arkansans with incomes above 100 percent of the federal poverty level will be able to enroll in qualified health insurance plans on the insurance exchange with financial support from tax credits and cost-sharing reduction payments or employer-sponsored coverage, the state said in the waiver request.

Arkansans with incomes at or below the 100 percent of the federal poverty level will remain covered through Arkansas Works and “may be subject to work requirements as a condition of eligibility,” the waiver request states.

“The proposed waiver amendment emphasizes the importance of personal responsibility in maintaining coverage and … DHS will conduct extensive education and outreach to promote continuity of coverage,” the state said. “Over the length of the demonstration, the state will monitor Arkansas’

uninsurance rate.”

According to the state, three people expressed concerns that the state is seeking to change the Arkansas Works program while Congress is contemplating significant changes to the federal health care landscape.

Two people noted in particular that it was unclear whether the premium tax credits and cost-sharing reduction payments will continue to be available on the insurance exchange in the future. If these subsidies cease to exist, it will be difficult for current Arkansas Works participants with incomes above 100 percent of the federal poverty level to find affordable coverage on the insurance exchange, those commenting said.

In response, the state “agrees that changes in federal support for health insurance could affect options available to individuals transitioning off Arkansas Works.”

“Accordingly, Arkansas is closely monitoring legislation being considered by Congress,” the state said. “Depending on what, if any, changes to federal health care programs are enacted by Congress, the state may consider modifying Arkansas Works.”

Asked about what those changes would be, Webb said that “it’s too early to say specifically what we’d have to modify, because Congress has not passed any changes at this point.”

“But we’d go through a process of amending the waiver,” she said.

Under the 2010 federal Patient Protection and Affordable Care Act, the federal government paid the full cost of expanding coverage for states, such as Arkansas, that expanded Medicaid through the end of last year.

In 2013, the Republican-controlled Legislature and then-Democratic Gov. Mike Beebe authorized the state’s Medicaid expansion under which the state pays for private health insurance for low-income Arkansans.

Starting in January, states became responsible for 5 percent of the cost of the program. The current federal law calls for the state’s share to rise each year until it reaches 10 percent in 2020.

In fiscal 2018, which starts today, the state projects the Medicaid expansion to cost $1.8 billion with the federal government covering $1.7 billion of the cost and the state chipping in about $109 million.