Arkansas Medicaid Terminations On Hold, Hiring Freeze Lifted For Backlog

Aug 4, 2015

Governor Asa Hutchinson (R) discussing changes to eligibility verification for Medicaid in the Governor's Conference Room at the Capitol.
Credit Jacob Kauffman / KUAR

Arkansas’s move to pare down its Medicaid rolls is hitting pause, for two weeks, as the Department of Human Services tries to catch up to a backlog of responses from residents trying to verify incomes.

Governor Asa Hutchinson announced on Tuesday he is ending a hiring freeze at DHS and paying for overtime until the determination effort can be brought up to speed.

“The challenge is the capability of DHS to respond to the information overload and the documents that are being sent in. Because we want to make sure that we treat people fairly, and we do not wrongfully take someone off the eligibility roll, we are are going to pause for two weeks any sending out of notices of termination in order to make sure that DHS can catch up,” said Hutchinson to reporters at the Capitol.

A hiring freeze for 35 positions will be lifted, additional DHS staff will shift their responsibilities and be re-assigned, and temporary workers could also be necessary, according to Hutchinson. The Republican governor characterized the costs in personnel and technology as “modest.” Earlier in the day the administration touted saving $2.5 million due to a state government hiring freeze.

Democratic Party Chair Vincent Insalaco told KUAR afterward that the processing challenge is one of the Republican Party’s own making.

“It sounds to me that they were not prepared. But you know, the governor is dealing with a Legislature that is dominated by people in his party that don’t even want this program to exist. So, no wonder why they’re not prepared,” said Insalaco.

DHS is checking income eligibility for over 600,000 low-income Arkansans who receive low or no-cost health insurance through traditional Medicaid or the state’s version of Medicaid expansion, known as the private option. 48,000 residents are likely to lose coverage at the end of August.

According to DHS, 97 percent of those losing benefits will have their insurance dropped because of a failure to respond to a letter asking for income verification within a 10-day window, or because the state failed to process their information before sending out a termination notice.

Hutchinson said that 10-day time span, which is 80 days shorter than allowed by the federal government, is still appropriate. Those who have received cancelation notices, including those affected by slow processing at DHS, have to challenge the termination and could have the coverage retroactively applied if unfairly dropped.

The income verification letters will still go out Hutchinson said, even as the determination process is put on hold, “The challenge is not the 10 day notice requirement.”

However, DPA Chair Insalaco, said the 10 day period is indeed an issue, calling it too narrow a window given the importance of the health insurance coverage.

“What they have to understand, which is what I feel so adamantly about, is that these are not numbers on a piece of paper. These are live human beings and most of them who work really hard are probably working two or three minimum wage jobs and dealing with health insurance for the first time,” said Insalaco.

He contended it’s an unfair, tougher standard than private insurance companies have for their beneficiaries. Following the press conference, Hutchinson’s spokesman J.R. Davis countered that the 10 day window, while under the authority of the governor, was established under original Medicaid expansion legislation supported by Democratic Governor Mike Beebe.

Medicaid expansion, a component of the Affordable Care Act, accounts for nearly half of those enrolled in the state's Medicaid program. The uninsured rate in Arkansas fell from 22.5 percent to 12.4 percent after the first year of Medicaid expansion, or the private option, from 2013-2014. That was the largest drop in the  percentage of uninsured in the country.