State Capitol Week in Review – March 12, 2021

LITTLE ROCK – The Senate passed a new version of the Medicaid expansion program, which is one of the most important bills of this year’s session because of the number of people it benefits and the amount of money that it generates in Arkansas.


About 311,000 people receive services under the program. The current number is higher than usual because the Covid-19 pandemic caused many people to lose their jobs or businesses. Before the pandemic, about 250,000 people were eligible.


The original version of the Arkansas Medicaid expansion was called the private option. Rather than simply expanding traditional Medicaid rolls, Arkansas developed a unique model of implementing the federal law. Our private option helps low-income families pay for private health insurance.


It is an extension of the traditional Medicaid program, which subsidizes health care for low-income families, the elderly and people with disabilities.


When Congress passed the federal Affordable Care Act in 2010, it allowed states to expand their Medicaid programs to make people eligible if they earned up to 138 percent of the federal poverty level. Arkansas created the private option and in 2014 was one of 25 states to expand Medicaid.


Spending bills in Arkansas must get a supermajority of 75 percent of the legislature for approval, so creation of the private option was a battle.


Maintaining a supermajority of support for the program has continued to be a political struggle. In a special session in 2016 legislators added a work requirement, in order to win the necessary number of votes.


However, the work requirement has been struck down by federal courts, and the current administration in Washington has signaled that it does not intend to make it a part of Medicaid.


The new version is in Senate Bill 410, which the Senate passed by a vote of 26-to-3. It would create a program called ARHOME, an acronym that stands for Arkansas Health and Opportunity for Me.


It would continue the private option, which reimburses physicians and hospitals at a higher rate than traditional Medicaid. Also, the private health coverage available to beneficiaries in the private option generally offer more services.


The availability of more services will be the incentive for beneficiaries to look for work and continue their education. They can keep their private coverage if they work or study, and if they don’t they will be moved to traditional Medicaid.


Physicians, hospitals and other providers will still be paid commercial rates under ARHOME. Those are from 25 to 65 percent more than traditional Medicaid rates, and therefore ARHOME will continue to help rural hospitals stay open.


The private insurers must meet annual financial and health targets to avoid financial penalties. Three specific categories of beneficiaries will be measured for health improvement. One is at-risk pregnant women and newborns up to the age of two. The second is people in rural areas with mental illness or drug abuse problems. The third comprises young people who were incarcerated or in foster care, and veterans.


SB 410 creates a new program and the bill has no specific dollar amounts. Funding will be considered later in the legislative session when lawmakers vote on the appropriation for Medicaid. That appropriation will require 27 votes for passage in the Senate, which is 75 percent of the 35-member body.

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