Private option enrolls 20,000 over 3 months

Program count tops 258,000

More than 20,000 people signed up for Arkansas’ private option from mid-March through mid-June, bringing the total enrollment in the expanded Medicaid program to more than 258,000, consultants hired by a legislative task force said Monday.

Since Dec. 15, enrollment has grown by 22 percent, from 213,026, and has already surpassed the average enrollment of about 246,000 that the state Department of Human Services projected the program to have in 2017 in its request for an extension of the federal waiver authorizing the program.

The Stephen Group of Manchester, N.H., updated the Health Reform Legislative Task Force on the enrollment figures as well as the rate increases approved last week for plans offered through the state’s insurance exchange, including private-option plans.

According to the Arkansas Insurance Department, plan premiums will increase an average of about 9.1 percent and are below what the companies had requested.

Arkansas Blue Cross and Blue Shield, for instance, lowered its requested increase to 9.7 percent after Insurance Commissioner Allen Kerr rejected its proposal for a 14.7 percent increase.

The company expects to lose $60 million on the plans next year, a company spokesman said last week.

Addressing the Health

Reform Legislative Task Force on Monday, Kerr acknowledged that companies may need bigger increases in the future.

“If we make no course corrections at all then, yes, we’re looking probably at a larger rate increase” in 2018, Kerr said.

The rates he approved provide “something that’s palatable, and something that’s affordable for the next 12 months while we make these course corrections and hopefully come up with a better plan,” he said.

The number of people enrolled and premiums charged by insurance companies will affect the cost to Arkansas of the private option next year, when the state will be responsible for a portion of the cost of coverage for the first time.

The state’s share will start at 5 percent next year, then increase every year until it reaches 10 percent in 2020. The federal government pays the remainder of the cost.

Under the private option, the state uses Medicaid

funds to buy coverage on the exchange for low-income adults.

The state created the program in 2013 as a primary way of extending Medicaid coverage to adults with incomes of up to 138 percent of the poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.

The task force was created last year to explore changes to the private option and other parts of the state’s Medicaid program.

In its application for an extension of the federal waiver authorizing the private option, the state is seeking approval for changes, such as charging enrollees premiums of about $13 a month, that Gov. Asa Hutchinson has said would encourage enrollees to stay employed and take responsibility for their health care. The revamped program would be known as Arkansas Works.

Medicaid Director Dawn Stehle said she expects the federal Centers for Medicare and Medicaid Services to approve the waiver extension request next month.

In addition to the premiums paid by the Medicaid program for private-option plans, the rate increases approved last week affect plans offered on and off the exchange to consumers who buy coverage on their own rather than through an employer.

The exchange makes federal tax credit subsidies available to many people

who don’t qualify for Medicaid and have incomes of less then 400 percent of the poverty level: $47,520 for an individual, for example, or $97,200 for a family of four.

Stehle said state officials are studying what effect the insurance companies’ rates and the number of Arkansans enrolled will have on the private option’s cost next year.

She said the enrollment total could include some people who are no longer eligible for the coverage but have not yet been removed because of difficulties the state encountered in installing a new electronic eligibility determination and enrollment system.

As of July 31, the department had a backlog of 56,331 pending requests to make changes to an enrollee’s coverage status that had been pending for more than 20 days, as well as 30,365 applications that had been pending for more than 45 days.

Human Services Director Cindy Gillespie has said she hopes to clear out the backlog by the end of the year with the help of a “surge” of temporary caseworkers.

In addition to the premiums charged by insurers, the state’s cost varies according to an enrollee’s age and choice of plan.

From 2014 to 2015, the state’s average per enrollee cost fell slightly, from $489.70 per month to $486.98 per month.

Through July, the per enrollee cost this year has averaged about $499 per month, according to figures presented to the task force by The Stephen Group.

Rep. Charlie Collins, R-Fayetteville and a chairman of the task force, said private-option enrollees have been high users of medical care because they often don’t have to pay out of pocket for their own medical care.

For instance, the private-option plans don’t have deductibles, and enrollees with incomes below the poverty level do not have to pay out of pocket for care.

Enrollees with incomes above the poverty level have to make some copayments: $8 for a doctor’s visit, for instance, or $10 to visit a specialist.

Enrollees don’t have to make a copayment when

they visit the emergency room.

Collins said state leaders would like to impose more charges on enrollees but have been told that federal officials will not approve them.

Sen. Jason Rapert, R-Bigelow, a member of the task force who has supported the private option, called it “a big problem” that taxpayers are supporting a program that may be contributing to higher premiums for those who buy coverage on their own.

“There’s a point at which I think it tests the resolve of any of us to support something that is so insane as what is happening here,” he said.

Arkansas Blue Cross and Blue Shield spokesman Max Greenwood said the company began losing money on its individual market plans, including private option plans, in the middle of last year and has continued to lose money this year.

Deciding to continue participating in the exchange next year was “a very difficult business decision,” and the company will carefully consider its options for 2018, she said.

“Hopefully, the trends will level out, but right now we don’t see that happening,” she said.

Some lawmakers questioned whether Arkansas can keep the cost of the private option down by shifting more high-cost enrollees to the traditional Medicaid program.

Currently about 25,000 Arkansans who became eligible for Medicaid under the expansion are covered under the traditional, fee-for-service Medicaid program, instead of the private option, because they are considered to be “medically frail,” said John Stephen, managing partner of The Stephen Group.

The designation means an enrollee needs services, such as long-term nursing home care, that private health plans don’t cover, he said.

Greenwood said many high-cost enrollees, such as those with hepatitis C, would not be considered medically frail because their health care needs are covered by the private plans.