Arkansas will not, for the time being, impose cost-sharing for Medicaid expansion beneficiaries below the federal poverty level.
The state won a federal waiver in 2013 to use new funding available under the Patient Protection and Affordable Care Act that helps residents earning up to 138% of the poverty level buy private plans on the new insurance exchange rather than enroll in traditional Medicaid coverage.
At the end of 2014, the Obama administration allowed Arkansas to mandate that all beneficiaries in these private-option plans make monthly contributions to health independence accounts, a version of health savings accounts.
When the waiver was granted, Arkansas become the second state, behind Iowa, to gain the ability to impose cost-sharing below the federal poverty level. Those making between 50% and 100% of the federal poverty level ($11,925 to $23,850 for a family of four) were expected to pay $5 a month. Those between 100% to 138% were to pay between $10 to $25, depending on income. Of the roughly 190,000 people in the private option, 80% are below 100% below the federal poverty level.
Making low-income adults pay part of the cost of their coverage and care helped sway Republican-elected officials in those states to approve the Medicaid expansion for adults with incomes up to 138% of the federal poverty level, which is optional under the Affordable Care Act.
Indiana has since gotten permission to also impose cost-sharing on people under poverty, and Arizona and Montana also plan to seek the same permission.
Initially, the plan was to conduct a six-month outreach campaign in Arkansas to enrollees under the poverty level in the private option, and then begin to start collections of the $5 contributions starting in July. Newly elected Republican Gov. Asa Hutchinson quietly altered the plan months ago, allowing cost-sharing for people above poverty to move forward, but canceling plans to impose it on the poorer enrollees.
“We now know that the private option as it exists today will be replaced,” said Amy Webb, communications director for the Arkansas Department of Human Services. “We felt that it was not prudent to create this new piece for this population if we were just going to change it a year from now. We'd rather take a step back, look at all the scenarios and then move forward with a plan that the Legislature and governor believes is best.”
There is now a healthcare task force of state lawmakers searching for alternatives to the private option, for which the waiver ends Dec. 31, 2016.
Advocates in the state say in truth, the decision came down to administrative costs. “We're we going to spend more money to collect the cost-sharing than what we're going to receive?” Dr. Joe Thompson, a former surgeon general for the state and current director of the Arkansas Center for Health Improvement, a health policy center that focuses on health data and research, said of the state's decisionmaking.
Providers in the state say they support the decision to hold off on cost-sharing for some of the poorest in the state until the task force develops recommendations. “The original plan was to not only have copays, but healthcare independence accounts,” said Bo Ryall, president and CEO of the Arkansas Hospital Association.
“This would be a big change and would require education for providers and cardholders that had not taken place earlier in the year.”
David Wroten, executive vice president of the Arkansas Medical Society, agreed that “this decision makes perfectly good sense.”
Iowa has no plans to change course in charging premiums to people under poverty, said Amy McCoy, a spokeswoman from the state's Department of Human Services.