Tennessee can learn from Arkansas’ decade-old Medicaid expansion plan
In 2013, my home state of Arkansas became the first Southern state to adopt Medicaid expansion under the Affordable Care Act. We didn’t simply accept what the federal government proposed, however.
We fashioned our own unique version of Medicaid expansion, one that used the ACA dollars to provide private health insurance to previously uninsured Arkansans instead of enrolling them in traditional Medicaid.
Arkansas’ approach has been receiving attention lately in the 10 of 50 states like Tennessee that still have not expanded Medicaid. Legislators have reached out to me and others in Arkansas to ask about our program — how it works, what it has accomplished, and why our Republican-controlled legislature has continued to reauthorize it every year with a supermajority vote.
Since 2012, no rural hospital in Arkansas has closed without being reopened or replaced, but in that time 58 rural hospitals have closed in the six states surrounding Arkansas, including 14 hospitals in Tennessee.
How Arkansas expanded Medicaid in a politically fraught environment
I was serving as Arkansas’ surgeon general when the state first faced the decision of whether to expand Medicaid. At the time we had one of the highest uninsured rates in the nation, so the option to extend health coverage to more Arkansans was attractive — but also politically radioactive.
Expansion supporters found an opportunity in Section 1115 of the Social Security Act, which allows states to propose experimental projects that promote the objectives of Medicaid. State policymakers crafted a proposal to use federal Medicaid funds to provide Arkansans earning up to 138% of the federal poverty level with private plans on the new insurance marketplace. The legislature approved the plan, as did the federal government. The program began providing coverage to Arkansans in January 2014, just over a decade ago.
The impacts were felt quickly. More than 200,000 Arkansans signed up, cutting our uninsured rate in half. These newly insured individuals gained access to treatment for chronic conditions that had gone untreated for years, as well as preventive services that allowed them to avoid preventable health problems and their associated costs.
The newly insured population could also now pay for hospital visits, causing uncompensated care costs at our hospitals to decrease by more than half. This cost reduction, combined with increased revenue from services provided to newly insured adults, reduced financial pressures on our struggling rural hospitals. Since 2012, no rural hospital in Arkansas has closed without being reopened or replaced, but in that time 58 rural hospitals have closed in the six states surrounding Arkansas, including 14 hospitals in Tennessee.
Tennessee could have saved the millions Arkansas did
Arkansas also made the key decision to enroll people who are medically frail in traditional Medicaid, resulting in a relatively healthy expansion population that minimized risk for participating insurers. Since 2017, Arkansas has enjoyed lower average marketplace premiums than any of the surrounding states, including Tennessee.
The federal government pays 90% of the program’s costs, which has brought billions of federal dollars into Arkansas. In the program’s early years, some worried that Arkansas’ responsibility for 10% of the costs would put a strain on the state budget, but in 2016 a consultant hired by the Republican legislative leadership estimated that the program would have a net positive impact of $757 million on the state budget between 2017 and 2021 through a combination of reduced state expenditures and increased tax revenues.
At this point only 10 states have not adopted full Medicaid expansion — a policy option that polls show most Tennessee voters support. Perhaps Tennesseans favor Medicaid expansion because they are tired of seeing their federal tax dollars provide health care coverage to the uninsured, ease financial pressures on rural hospitals and benefit the economy in states like Arkansas but not in Tennessee.
Joe Thompson, M.D., M.P.H., is president and CEO of the Arkansas Center for Health Improvement and was Arkansas’ surgeon general under Govs. Mike Huckabee (R) and Mike Beebe (D).