Medicaid revisions draw flak; groups comment on Arkansas plan

By Andy Davis

Proposed changes to the Arkansas Works Medicaid program will drive up insurance premiums, leave low-income Arkansans without coverage and increase the amount of unreimbursed care provided by hospitals and other health care providers, health industry and advocacy groups contend.

The warnings were given in written comments on a plan that includes moving about 60,000 Arkansans off the program by limiting eligibility to adults with incomes up to the poverty level, instead of the current cutoff of 138 percent of the poverty level.

The state also hopes to impose a work requirement on many of the 260,000 Arkansans who would remain covered by the program and to stop providing reimbursement for medical bills incurred up to three months before a Medicaid application is submitted.

Instead, coverage would begin on the first day of the month when an application is submitted.

Bo Ryall, president of the Arkansas Hospital Association, said in a letter that the changes will “lead to gaps in coverage, churn, and uninsurance for many low-income working Arkansans.”

He noted that the state Department of Human Services estimated that the cost to hospitals of providing unreimbursed care to the uninsured would increase by $28 million next year if half those who are moved off the program fail to sign up for other coverage.

In 2019, when the eligibility change would be fully implemented, the cost to hospitals would increase to $53 million.

If insurers are unable to increase their reimbursement rates to hospitals to cover that loss, “The combined effects on hospital finances would range from harsh to devastating,” Ryall wrote.

The comments, along with responses from the state, will be submitted later this month in a request to the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services for approval of the changes.

The deadline to submit comments on the proposed changes was Sunday. Brandi Hinkle, a spokesman for the Human Services Department, said the department could revise its proposed changes in response to the comments but hadn’t decided on any adjustments as of Monday.

She said state’s proposed changes, endorsed by the Legislature during a special session in May, are needed to ensure the state will be able to pay its share of the cost of the expanded Medicaid program.

Under the 2010 Patient Protection and Affordable Care Act, the federal government paid the full cost of expanding coverage for states, such as Arkansas, that expanded Medicaid through the end of last year.

Starting in January, states became responsible for 5 percent of the cost. The health care law calls for the states’ share to rise each year until it reaches 10 percent in 2020.

Hinkle said most of those who are moved off of expanded Medicaid will be eligible for job-based coverage or federal tax credit subsidies to help pay for coverage in plans offered on the state’s health insurance exchange through

“There will probably be a number of them who do not take advantage of those opportunities, but they certainly will have that opportunity,” Hinkle said.

Under the so-called private option, most Arkansas Works enrollees are covered by plans on the insurance exchange now, but with the state Medicaid program paying the providing additional subsidies that reduce the recipients’ out-of-pocket spending for medical care.

Despite the assistance provided by the tax credits, Arkansans with incomes of 100-138 percent of the poverty level will likely have to pay more for coverage on the exchange than the $13 a month they pay for coverage under Arkansas Works, several commenters noted.

For those who qualify for job-based coverage, the costs could be even higher. Under the Affordable Care Act, federal tax credits are not available to those who are eligible for employer coverage that would cost less than about 9.7 percent of their household income.

That means a worker supporting a family of four with an income of $24,324 could face an employer premium for individual coverage of up to $196 per month and still be ineligible for federal tax credits, Casey Trzcinski Sherman and Kevin De Liban, attorneys with Legal Aid of Arkansas, noted in a letter.

And, under the so-called “family glitch,” the other household members also would be ineligible for the credits regardless of how much family coverage costs under the employer plan.

“We have seen some Legal Aid of Arkansas clients who are expected to pay ten times the cost of employee-only coverage for their children and spouses,” the attorneys wrote.

Michael Keck, Arkansas government relations director for the American Cancer Society’s Cancer Action Network, said the changes would hit hard for those undergoing cancer treatment or who had treatment recently and need follow-up care.

He suggested exempting cancer patients who remain on Arkansas Works from the work requirement and providing those who are moved off the program with temporary coverage until their treatment is finished.

Similarly, for patients with lung disease, losing coverage “could have deadly consequences,” Ashley Lyerly, regional director of public policy for the American Lung Association, said in a letter.

“Lung disease patients need regular healthcare to breathe and live,” Lyerly said in the letter. “Patients with asthma need daily maintenance medications to control their symptoms and reduce inflammation in the airways. Without proper treatment, these patients will have asthma attacks and seek treatment in the emergency department, which drives up premiums for those on private insurance.”

In their letter, Arkansas Advocates for Children and Families Executive Director Rich Huddleston and Health Care Policy Director Marquita Little said the work requirement will likely be difficult for the state to administer and will result in some people who lose coverage seeking costly emergency room care instead of going to a doctor’s office.

They noted that Arkansas also could be affected by changes that Congress is considering making to the Affordable Care Act.

For instance, the American Health Care Act, passed by the House of Representatives last month, would phase out the Affordable Care Act’s enhanced funding for Medicaid expansion and reduce the subsidies available to many low-income people.

“Without knowing the federal guardrails, it is premature for the state to move forward with more risky changes to Arkansas Works,” Huddleston and Little said in the letter.

Other groups expressing concern about the impact on low-income Arkansans included AARP, Community Health Centers of Arkansas, the American Diabetes Association, the Center for Law and Social Policy in Washington, D.C., the Arkansas chapters of the National Alliance on Mental Illness and the American Academy of Pediatrics, and Human Arc, an Ohio company that helps sign up hospital patients for government assistance.

Several American Heart Association volunteers also emailed identical comments asking the state to reconsider the proposed changes.

In a statement provided to the Arkansas Democrat-Gazette, the organization said heart disease disproportionately affects low-income people and that Medicaid is the “coverage backbone for the healthcare services these individuals need.”

“We are deeply disappointed to see the state consider reducing coverage in this way,” the organization said in the statement. “In addition to the irreparable harm done in eliminating coverage, these provisions create serious barriers to treatment to heart disease and stroke patients, as well as those trying to stay healthy and prevent disease.”

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