Governor Hutchinson to Seek Changes to Arkansas Works Waiver, Legislation Needed

LITTLE ROCK, Ark., March 6 -- Gov. Asa Hutchinson, R-Ark., has issued the following news release:

At a news conference Monday afternoon, Governor Asa Hutchinson outlined four broad changes he is seeking to make to the Arkansas Works program. The reforms would be the first initiated under the Trump Administration, and they include: capping eligibility at 100 percent of the federal poverty line (FPL); establishing a work requirement; strengthening employer-sponsored insurance; and making Arkansas an "assessment state." The Governor has directed the Arkansas Department of Human Services (DHS) to take the necessary steps to submit requests to the federal government to amend the Arkansas Works Medicaid waiver. Additional details are below.

Governor Hutchinson issued the following statement:

"Today I have directed my Department of Human Services to file waiver amendment requests with the Trump Administration that will continue the reform efforts we started last year with Arkansas Works. The amendments will focus on meaningful work requirements, emphasizing employer-based insurance, and reducing the numbers in Arkansas Works to create a stronger and more sustainable program.

"I have spoken with Secretary Price and the Trump Administration about our plans to file these waiver amendments, and they've conveyed to me that the requests are consistent with the overall objectives of reform efforts in Washington."

The requested waiver amendments include:

* Capping the financial eligibility of the Arkansas Works program at 100 percent of the FPL. Currently, the financial eligibility limit is 138 percent of the FPL. An estimated 20 percent of the Arkansas Works population is above 100 percent. Once this change is made, individuals in this income bracket would be eligible for federal subsidies through the federal marketplace and could pick their same plan or choose a different one that better suits their needs. Their coverage would still be subsidized as it is today, but only with federal dollars, rather than a combination of federal and state funding.

* Adding a work requirement for non-disabled adults that aligns with other public assistance programs, such as SNAP. The work requirement--along with employment and training services through the Department of Workforce Services--will be designed to encourage movement up the economic ladder for enrollees through education, training and ultimately better jobs. This raises the level of expectation for non-disabled adults on Medicaid and enables the state to encourage these individuals to use the program as s temporary safety net, rather than a permanent solution.

* Replacing the current Employer-Sponsored Insurance component with a new, more targeted program that focuses only on individuals who are a) working for small employers and b) earning at least 75% FPL.

o The employee will receive the same benefits as their coworkers, with no Medicaid wraparound benefits.

o The state will provide funding to cover premium costs up to the amount the state would have paid for an individual enrolled in a Qualified Health Plan through Arkansas Works. This will cover the entire employee share of the premium and also offset some of the employer portion.

o This program will incentivize employers to offer insurance, which will enhance the stability and productivity of their workforce, and it will incentivize employees to work more hours by eliminating the fear of losing coverage due to an increase in income.

* Moving from a "determination state" to an "assessment state," which would return control of the eligibility process to the state. Current state law designates Arkansas as a "determination state," and that allows the federal government to determine eligibility for Arkansas Works and Medicaid enrollees who apply through the federal marketplace. Now that DHS has cleared its backlog of overdue Medicaid casework and the functionality of its eligibility system has improved, there is no longer a need to allow the federal government to make those determinations.

DHS Director Cindy Gillespie said Monday that the agency will immediately begin work on drafting the waiver amendments, and will seek input from providers, insurance carriers, legislators and other stakeholders. The goal is to have the draft amendments complete and out for public comment by April 15 and to the Centers for Medicare and Medicaid Services (CMS) by June 1 for review.

"We want this to be a very transparent process, and we truly do want input so that we can create something tailored to the needs of Arkansas," Gillespie said.

Once the waiver amendments are approved, DHS would promulgate necessary rules between August and November, and the new program requirements would go into effect Jan. 1, 2018.

To view Requested Waiver Amendments, go HERE (http://ee-governor-2015.ark.org/images/uploads/AR_Works_Poster.pdf).

To view the photo album of today's press conference, go HERE (https://www.flickr.com/photos/131231660@N04/sets/72157679460567790). To view video of the press conference, go HERE (https://www.youtube.com/watch?v=8PTcWe88yYU).

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