Arkansas Private Option-Enrolled Or Eligible Crosses 300,000, Legislator Says ‘Unsustainable'

File photo of Department of Human Services Director Cindy Gillespie who says the number of applications for Arkansas Medicaid expansion program is likely to grow.
Credit Talk Business & Politics

More than 301,000 Arkansans are either receiving health insurance through the private option or have been deemed eligible for the program as of the end of September – an increase of almost 7,000 from the previous month.

The number of individuals enrolled in the private option reached 270,572. Another 30,436 had been determined eligible but had not yet finished enrolling. Along with those 301,008 Arkansans, another 23,309 who applied through the program were considered “medically frail” and enrolled in traditional Medicaid.

The total number of Arkansans enrolled through both means is 324,318 – an increase from the 317,289 enrolled in August. That month, 265,608 Arkansans were enrolled through the private option and another 28,638 individuals had been deemed eligible for coverage. Another 23,043 individuals were deemed medically frail.

The numbers were revealed Monday in a letter dated Oct. 14 from Department of Human Services Director Cindy Gillespie to Gov. Asa Hutchinson. Gillespie wrote Hutchinson that the increase in applications is due to the department’s working to eliminate a backlog of cases. She said the number of applications is likely to grow.

The private option is the state program that uses federal Medicaid dollars to purchase private health insurance for Arkansans with incomes up to 138% of the federal poverty level. It was created after the Supreme Court ruled states could choose whether to expand Medicaid coverage under the Affordable Care Act, also known as Obamacare. Arkansas obtained a waiver from the federal Centers for Medicare and Medicaid Services (CMS) in order to purchase private insurance rather than simply expand Medicaid.

The average cost per recipient in August was $501.25, an increase of $20.63 from the $480.62 cost in August. The state must keep costs below $523.58 under the federal waiver. The state in August paid $97.6 million in premium payments, $37.1 million in cost-sharing payments that defer additional costs recipients otherwise would pay, and $1.1 million in “wraparound costs” such as transportation.

The federal government is paying virtually all of the private option’s costs. But in 2017, the state is responsible for 5%, a number that increases to 10% by 2020. The private option composes $1.6 billion of the $7 billion state Medicaid program.

Gov. Hutchinson has asked state health officials to create a five-year plan to improve Medicaid sustainability. Gillespie wrote that she would provide the first part of that report, what she called “a retrospective analysis of the program,” when Hutchinson returns from an economic development trip to China.

Sen. Jim Hendren, R-Gravette, who is chairing a legislative health task force considering Medicaid reform, wrote in response to the numbers, “The entire Affordable Care Act is on a trajectory that is unsustainable. At a state level we have done, and will continue to do all we can to protect the state budget and do what’s best for Arkansas. Absent the federal government allowing real reforms to take place in Medicaid expansion, it will soon come to an end; not just Arkansas but all states. States like Arkansas do not have the ability to deficit spend. Nor should we – even if we could. Economics will doom this program barring major flexibility that so far the federal government has been unwilling to allow.”