Legislature set to tackle changes to "Arkansas Works" Medicaid expansion in special session | Arkansas Blog

Legislature set to tackle changes to "Arkansas Works" Medicaid expansion in special session

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HUTCHINSON: Seeking changes to Arkansas Works. - BRIAN CHILSON
  • Brian Chilson
  • HUTCHINSON: Seeking changes to Arkansas Works.

KNWA's Curt Lanning reports that Rep. DeAnn Vaught, chair of the House Management Committee, sent an email to legislators stating that the legislature will likely immediately reconvene for a special session focusing on health care after adjourning sine die on May 1.

The governor is expected to call the special session to get legislative approval of his proposed alterations to the private option (now known as "Arkansas Works") — the state's unique version of Medicaid expansion, which uses Medicaid funds to purchase health insurance for low-income Arkansans. Gov. Hutchinson announced last month that he will seek a federal waiver of Medicaid rules to enact a series of changes to the Arkansas Works program. This new slate of changes is a right-wing wish list that was rejected by the Obama administration when Hutchinson previously made inquiries; the governor says the Trump administration has generally been encouraging about the direction he is seeking to go. The governor's plan imposes significant new burdens on beneficiaries, including work requirements and enforceable premiums.

The feds would have to approve the state's waiver proposal in order to enact the governor's plan, but the feds will only move forward if legislation is already in place. That's the reason for the special session: The governor will ask the legislature to pass laws granting him the authority to seek the waiver and his plan will be spelled out, in broad terms, in legislative language in these laws. Most expect that the governor will be able to get legislative approval relatively easily (he needs a simple majority). Note that some of the fine print will still have to wait for the state's actual waiver proposal and the terms and conditions if the Trump administration grants the waiver.

Here are some of the changes that Hutchinson will be pushing in the special session:

* Some form of work requirements for beneficiaries. This was a line in the sand for the Obama administration but Team Trump appears ready to allow it. Lots of questions about the details here: What will be the punitive measure if beneficiaries fail to comply? What if any exemptions will be available for those who are medically frail, caretaking for a family member, etc? What job placement or job training resources will be available? What will be verification process? What happens to beneficiaries who seek a job and are unable to find one?

* Moving beneficiaries who make more the federal poverty level to the Obamacare marketplaces. Currently, the Medicaid expansion covers adults who make less than 138 percent of the federal poverty level (that's about $16,000 for an individual or $33,000 for a family of four). Hutchinson is proposing to move those who make more than the poverty line — around $12,000 for an individual or $24,000 for a family of four — from the private option over to the Obamcare exchange, the regulated and subsidized marketplace where consumers can purchase health insurance. Obviously this plan relies on the continued existence of Obamacare! The folks that make between 100-138 percent of FPL would shop for plans on the marketplace. Those plans would be subsidized but it would still mean beneficiaries had to pay small premiums set at 2 percent of their income (while "Arkansas Works" currently does include small premiums for this population, beneficiaries don't lose coverage if they fail to pay; under this new plan, if they couldn't keep up with payments, they would lose their insurance).

While this all sounds technical, it could have major policy implications: it would save a lot of money for the state, but it would cost more for the federal government, particularly if other states started down this path — and it would impose more costs on low-income beneficiaries. It would also be a major undertaking in terms of coordination and outreach for an administration with little interest in either when it comes to the Medicaid population. If the state forces a sudden turnover of 60,000 Arkansans, the chances of many current beneficiaries getting lost in the shuffle and ending up without coverage would be high.

* More state control over the eligibility determination process. This is one to watch. In 2015, the Hutchinson administration purged tens of thousands of eligible Medicaid beneficiaries off of the rolls during a bungled renewal process.  Many of those purged were eligible for Medicaid according to the state’s own data and the state’s policy violated federal regulations (a problem state officials denied but the feds eventually confirmed, forcing a change in policy). The governor has publicly and repeatedly stated that the number of beneficiaries is too high. In the past he's shown a willingness to ignore federal regulations to try to cull the rolls; now he may be aiming to waive those regulations altogether.

* Modifying the employer-sponsored insurance component of Arkansas Works. The governor has been trying to arrange a system that would keep Medicaid beneficiaries who get offered health coverage via a job on those plans, rather than private option plans. The current convoluted scheme involves using Medicaid funds to make up the difference in terms of cost and coverage so that a beneficiary can stick with the employer-sponsored plan but get all the benefits of Medicaid. The program has gotten relatively little participation. The governor would like to create additional incentives for employers to participate, and potentially may impose additional costs on beneficiaries by requiring them to chip in more for their own employee contribution to the plans.

p.s. The special session will move forward despite the fact that President Donald Trump is still pushing a health care plan that would, in practice, completely phase out funding for "Arkansas Works" and end the program, sending Hutchinson and the state back to the drawing board (Hutchinson has expressed opposition to the Trump/Ryan plan for that reason).


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