State Capitol Week in Review – June 18, 2021

LITTLE ROCK – State Medicaid officials are asking the federal government for approval of ARHOME, the newest version of Medicaid expansion.


They anticipate a decision in November or December. ARHOME will replace the current version of Medicaid expansion called Arkansas Works, which expires December 31.


ARHOME stands for Arkansas Health and Opportunity for Me. It was created by Act 530, which the legislature enacted earlier this year during the regular session.


Medicaid expansion is a government health program for about 250,000 Arkansans, although there was an increase to about 274,000 people last year due to the economic impact of the pandemic.


The Arkansas version of Medicaid expansion is different from that in other states, because the Arkansas version relies on private insurance companies to provide the bulk of the coverage.


Typically, 84 percent of the people enrolled in Medicaid expansion are in private insurance plans. The remaining 16 percent have more extensive medical needs and are covered in the more traditional Medicaid program.


When Congress enacted the national Affordable Care Act in 2010, the states had the option of creating their own versions of Medicaid expansion to cover more people. Traditionally, Medicaid was for low-income families and the Affordable Care Act made more people eligible by raising the income thresholds.


Arkansas created its unique version of Medicaid expansion in 2013. Now, it’s common for public health officials and legislators to distinguish between “traditional Medicaid” and “Medicaid expansion.”


Under Medicaid expansion the state helps individuals pay for private health insurance. The traditional Medicaid program uses a “fee for service” model, which means that enrollees visit their doctors, who then file a claim with the state for reimbursement.


In the last quarter of 2020 Medicaid paid for health care for 912,738 Arkansans. Of those, 380,364 were children and 129,399 were people with disabilities, 52,664 were senior citizens and 76,309 were adults in the traditional Medicaid program. The remaining 274,002 were people in Arkansas Works, the Medicaid expansion program created in 2013.


State officials need approval from the federal government for changes in Medicaid because the federal government provides the vast majority of the funding. For example, the federal government funds 90 percent of Medicaid expansion and the state funds 10 percent. For traditional Medicaid, the federal government pays about 77 percent of Medicaid costs, although that percentage fluctuates from year to year.


The federal match is expected to drop closer to 70 percent when the pandemic is past and current public health emergency declarations are called off.


The federal Medicaid matching rate depends on the per capita income in each state, so relatively prosperous states pay a higher percentage. Federal funds pay for 44 percent in New Jersey and New York.


The health care community in Arkansas reported significant health and financial benefits from Medicaid expansion in 2013. The number of people without health insurance went down from about 27 percent to about 15 percent between 2013 and 2015, according to surveys conducted by hospitals and health insurance providers.


When more people are insured and see a physician regularly, it results in fewer visits to emergency rooms.