LITTLE ROCK — Changes Arkansas is seeking for its Medicaid expansion program could save the state up to $93 million over the next five years while causing a “minimal” number of people to lose health insurance, state Department of Human Services Director Cindy Gillespie said Wednesday.
Gov. Asa Hutchinson is expected to call a special session next week to ask lawmakers to approve legislation authorizing DHS to make changes to the program formerly known as the private option and now known as Arkansas Works. Hutchinson has said that if his proposed changes get legislative approval, he will seek waivers from the federal government to allow their implementation.
The program — created in 2013 as an alternative to the expansion of state Medicaid rolls envisioned in the Affordable Care Act — currently provides government-subsidized private health insurance to Arkansans earning up to 138 percent of the federal poverty level. This year, the state is paying 5 percent of the program’s cost, but the state’s share will increase gradually to 10 percent by 2020.
Hutchinson wants to lower the maximum income eligibility level to 100 percent and add a work requirement — changes the administration of former President Barack Obama would not allow but that Hutchinson believes the administration of President Donald Trump will allow.
In a meeting with reporters Wednesday at DHS’ headquarters in Little Rock, Gillespie and other DHS officials said the contemplated changes are projected to save the state between $66.6 million and $93.4 million over the next five years.
Gillespie said the state could achieve the savings without a significant increase in the state’s uninsured population.
“Our goals is not for everyone to lose health insurance,” she said.
Gillespie said the plan calls for the maximum eligibility level to change Jan. 1. The change would not affect everyone at once.
Throughout 2018, whenever the time comes for an Arkansas Works participant earning more than 100 percent of the federal poverty level to renew his or her coverage, the person would be told that he or she no longer qualifies for Arkansas Works but could enroll in coverage through the insurance exchange, Gillespie said. Those people would qualify for federal subsidies and would not see their financial obligation increase, she said.
Arkansas Works participants who earn up to 100 percent of the federal poverty level pay no premiums, but since Jan. 1 of this year participants who earn more than 100 percent of the federal poverty level have been required to pay a monthly premium that cannot exceed 2 percent of their income. However, the Obama administration would not allow the state to penalize people who did not pay their premiums.
Since the premium requirement began, only about 25 percent of participants have been paying it each month. Gillespie said DHS believes that is because the requirement has “no teeth.”
Arkansas will seek federal approval to take away people’s insurance if they do not pay their premiums, Gillespie said. She said that despite the low percentage of people paying their Arkansas Works premiums now, she believes nearly all will pay premiums when they become a requirement for maintaining coverage.
Insurance carriers and DHS will work to inform all participants of the premium requirement and will work with people who have trouble paying, she said.
Gillespie said she couldn’t promise that the number of people losing insurance coverage would be zero, but she said, “Working together, we think we can keep it very minimal.”
She also said DHS and insurance carriers would work together to help people meet the contemplated work requirement, which largely would mirror the work requirement currently in place under the Supplemental Nutrition Assistance Program but would include some additional exemptions and alternative ways to satisfy the requirement.
Activities that could satisfy the requirement aside from employment would include participation in job training programs, on-the-job training, GED classes and job search training, among other things, Gillespie said.
The ultimate goal of the work requirement is to help people gain employment and improve their lives, Gillespie said. Currently, among Arkansas Works participants who are not known to qualify for an exemption from the work requirement, 31,881 between the ages of 19 and 29 and 36,422 between the ages of 30 and 49 have zero income, she said.