Arkansas officials confident people on Medicaid expansion will retain health coverage

Arkansas Secretary of Human Services Janet Mann said Monday that she expects the more than 215,000 people on the state's Medicaid expansion to retain some form of health coverage, despite the Trump administration's moves to end the hybrid program.

Mann told lawmakers she's confident the federal Centers for Medicare and Medicaid Services will grant the state's request for a two-year extension of the expansion, also known as Arkansas Health and Opportunity for Me, or ARHOME. Arkansas sought the temporary reprieve after the Trump administration denied the request to extend the expansion through the end of 2031.

The state can transfer ARHOME enrollees to fee-for-service Medicaid coverage or managed care. Each option has several potential models to consider, and DHS officials are "making a pros and cons list for all of those scenarios," Mann said.

"We are considering everything but ending the program," she told the Arkansas Legislative Council's Hospital, Medicaid, and Developmental Disabilities Study Subcommittee.

The majority-Republican Legislature is expected to take up the matter in the session starting in January.

If CMS does not give the state its requested two-year grace period, all ARHOME recipients can be moved to fee-for-service coverage Jan. 1, Mann said.

"That would be bumpy for the beneficiaries and fairly quick," she said. "I think it would be disruptive, potentially, to providers and beneficiaries. I'm hoping to avoid a disruption."

In 2013, Arkansas became the first Southern state to expand Medicaid under the Affordable Care Act. Nine states still have not taken this action.

Arkansas is also the first to use a hybrid expansion model that purchases private health insurance for low-income people with federal funds.

Switching to managed care would lower the 2.5% insurance premium tax DHS collects annually on the expansion population and uses to pay for the state's share of Medicaid, Mann said, and switching to fee-for-service coverage would eliminate the tax revenue altogether.

Arkansas healthcare providers alarmed by potential end of state's Medicaid expansion

Republican Rep. Les Eaves of Searcy asked if removing the Medicaid expansion population from private insurance coverage would change the prices of commercial insurance premiums.

Mann said there would likely be "a disruption in the marketplace," but she did not have specific examples and has requested input from the Arkansas Insurance Department.

Medical providers and experts have expressed concern about the added costs an already strained Arkansas healthcare system could face without the expansion.

Any changes to the Medicaid expansion program are likely to impact hospitals' upper payment limit, which is the maximum amount of Medicaid reimbursement hospitals pay healthcare providers, Mann said.

Arkansas hospitals receive among the nation's lowest reimbursement rates from both private and government-run insurers, but labor, equipment and administrative costs have increased in the past several years. Some hospitals have cut services to keep their doors open.

Health insurer Centene announced in July that it will stop participating in the state's Medicaid expansion next year. The company's decision was unrelated to CMS' denial of the ARHOME extension.

The denial spawned from new guidance under last year's One Big Beautiful Bill Act regarding budget neutrality, which requires ARHOME to not cost the federal government more than would be projected without the program, according to Mann's letter to CMS earlier this month asking for a two-year extension.

Mann's letter emphasized that DHS has been preparing to roll out new work requirements for the expansion population, another mandate put in place by the federal budget changes. Thousands are expected to lose coverage because of the mandate.

Arkansas has begun a 'soft launch' of Medicaid work requirements. What does that mean?

On July 1, DHS began checking to ensure that Medicaid recipients are in compliance with the upcoming requirements. The agency gives noncompliant Arkansans 30 days to comply or provide proof of eligibility for an exemption.

After the ALC subcommittee's meeting Monday, American Cancer Society Cancer Action Network issued a statement in support of DHS' request for a two-year extension.

"Access to health coverage results in earlier cancer diagnoses, when the disease is more treatable and less costly and cancer outcomes are improved," the organization wrote. "Continuity of coverage is vital for cancer patients. We cannot let patients get caught in the middle of this renewal process and have their care taken from them."

Arkansas Advocate is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Arkansas Advocate maintains editorial independence. Contact Editor Andrew DeMillo for questions: info@arkansasadvocate.com.