Governor Says Feds OK Arkansas's Modified Medicaid Expansion

Gov. Asa Hutchinson speaking to reporters after announcing the federal government has approved a waiver for the state's Medicaid expansion plan known as Arkansas Works.
Credit Michael Hibblen / KUAR News

Gov. Asa Hutchinson says the Obama Administration has approved changes for Arkansas's Medicaid expansion program, though the waiver has stricter requirements than he wanted in providing assistance to employers who offer insurance for lower-income employees.

In a press conference Wednesday, Hutchinson said federal Health and Human Services Secretary Sylvia Burwell called him Tuesday night, the day after they met in Washington, saying she would issue a letter Wednesday saying the waiver for the Arkansas Works program, previously known as the Private Option, would be granted.

The waiver features four main elements.

• A newly required co-pay for beneficiaries with incomes between 100-138% of the federal poverty level. The co-pay would be $13 the first year and capped at 2% of their income, or $19, in subsequent years.

• Allowing retroactive coverage back to the first day of the month that a recipient applies. It previously was 90 days before application.

• A requirement that unemployed and underemployed beneficiaries be referred to work-training programs, with incentives to participate.

• Medicaid would pay 75% of the premiums for employers who begin on Jan. 1, 2017, providing Affordable Care Act-compliant coverage for Arkansas Works-eligible beneficiaries, and would pay the employees’ share of the premiums.

Hutchinson had hoped the last element would apply more broadly to all employers to move more recipients to employer plans, and to leave them there as their incomes change. He said the waiver’s limitation will reduce the number of employers that participate.

“We did get the employer-sponsored insurance initiative. It just didn’t go as far as we wanted,” he said.

The waiver had to be approved so the state could continue offering the program Jan. 1.

Hutchinson said he has made it clear to the Trump administration that the state will seek additional waivers and more flexibility, particularly in employer-sponsored insurance and in work requirements.

“I have to make decisions as governor based on what the federal rules are now,” he said. “I made them last year based upon those rules. We’re making the best judgment we can now, and as they change, we’ll make different judgments and take different opportunities in the future.”

The private option was created in 2013 after the U.S. Supreme Court ruled states could choose whether to expand their Medicaid populations under the Affordable Care Act, otherwise known as Obamacare. While many Republican-led states declined to participate in the expansion, Arkansas created the private option, which uses Medicaid dollars to purchase private insurance for Arkansans with incomes up to 138% of the federal poverty level.

The private option was enacted under Gov. Mike Beebe and has been resisted by some Republicans in the Legislature. The number of Arkansans enrolled increased to 324,318 as of the end of September – higher than the 250,000 originally forecast. The federal government is sending the state $1.6 billion in taxpayer dollars this year and paying 100% of the cost. Starting in 2017, the state chips in 5%, a number that rises to 10% by 2020.

Asked if he would like Medicaid expansion to stay in place, Hutchinson said he told congressional leaders and the Trump transition team while in Washington this week that the state wants flexible block grants. He spoke to Trump by phone last week and said the president-elect “is very firm on his conviction that the states need more flexibility.”

“The impact of that will be that it will control the numbers better. … You’ve seen how the numbers have grown,” he said. “There’s a lot of understandable reasons for that growing. But we can’t have an unlimited, unpredictable future in terms of the cost to the state, and that’s what we need to have more capability to control.”

Hutchinson said he expects Congress to repeal the Affordable Care Act, with a transition time to make changes, such as a tax credit for middle class individual insurance purchasers.

“I’m excited about the opportunity to influence that debate in the Trump administration and Congress,” he said. “We’ve got some real experts here who’ve got real-life experience with people who are impacted by it, and we want to take advantage of that opportunity.”

In other business, Hutchinson said he supports separating the January holiday that, in Arkansas, marks the birthdays of Dr. Martin Luther King and Gen. Robert E. Lee. Lee’s commemoration would be moved to the fall in the legislation Hutchinson supports.