Medical Services funds clear Senate

The state Division of Medical Services’ appropriation for the coming fiscal year cleared the Senate 35-0 on Wednesday afternoon, and now heads to the House.

Senate Bill 72 grants spending authority for the Medicaid program, which the state Department of Human Services projects will spend $9 billion in fiscal 2021 — $7.1 billion in federal funds and $1.9 billion in state funds. Fiscal 2021 starts July 1.

“Everybody recognizes that it is essential right now,” said Sen. Missy Irvin, R-Mountain View. “Our health care infrastructure is struggling right now drastically.”

Because of the public health emergency resulting from the coronavirus pandemic, the Medicaid program’s finances have been assisted by the federal government increasing the match rate for traditional Medicaid by 6.2 percentage points, retroactive to Jan. 1, to 77.62%. The department projects that the higher rate will end by December.

Each legislative session, the Division of Medical Services’ appropriation usually has difficulty obtaining the required three-fourths vote for approval because it includes spending authority for the Medicaid expansion program that provides private health care coverage for about 250,000 low-income adults. The Legislature initially authorized the expansion program as the private option in 2013, and it deeply divided Republicans.

It’s now called Arkansas Works under Republican Gov. Asa Hutchinson. A federal appeals court ruled in February that the Trump administration unlawfully allowed Arkansas to impose a work requirement on some recipients.

This year, the state pays 10% of the cost of the program. The Human Services Department projects enrollment will grow to about 350,000 by August and then decrease by about 2,500 a month from September through June 2021.

The department projects that Arkansas Works will cost $2.27 billion in federal funds and $252.5 million in state funds in fiscal 2021 — up from a projected $1.88 billion in federal funds and $175.1 million in state funds in fiscal 2020 — said Amy Webb, a spokeswoman for the Human Services Department.