Hutchinson's private option plan would nix cost-sharing and savings accounts below poverty line | Arkansas Blog

Friday, January 23, 2015

Hutchinson's private option plan would nix cost-sharing and savings accounts below poverty line

Posted By on Fri, Jan 23, 2015 at 7:43 AM

HENDREN: Sponsor of bill which would create health care task force…and make a couple of tweaks to the existing private option.
  • HENDREN: Sponsor of bill which would create health care task force…and make a couple of tweaks to the existing private option.
If you followed Gov. Asa Hutchinson's speech yesterday, you know the top line story: He is asking the legislature to fund the private option for two more years, and he's asking for a legislative task force that would lead the way on an overhaul of the state's health care system in 2017.

But there was also little piece of policy news buried in the bill filed yesterday by Hutchinson's nephew (and previously outspoken opponent of the private option) Sen. Jim Hendren. If passed, Hendren's bill would make a couple of tweaks to the existing private option. It would halt co-pays and the Health Independence Account program on private option beneficiaries below the poverty line, and it would nix future transitions of certain populations now on traditional Medicaid over to the private option. 

The main point of Hendren's bill to create the "Arkansas Health Act of 2015" is to establish the task force to make the recommendations for whatever Hutchinson's Medicaid overhaul might look like in 2017 (AsaCare?). But it also includes Section 4: "Suspension of certain changes to the Health Care Independence Program."  That's the existing private option. What are those "certain changes"?

Starting this year, for some beneficiaries, the private option was imposing co-pays and mandating participation in a version of savings accounts called Health Independence Accounts. These changes were mandated by an amendment to the private option legislation in 2014 and made possible by additional federal waivers. The private option also included language about eventually transitioning certain populations now on traditional Medicaid — very poor parents and kids on ARKids — to the private option.

Hendren's bill puts the brakes on both of these policy wrinkles. The cost-sharing and HIA accounts would still be in place for beneficiaries who make between 100-138 percent of the federal poverty level but would go away for people between 50-99 FPL. Meanwhile, the children in the ARKids program and parents who make less than 17 percent FPL — populations that were already covered by the traditional Medicaid program before the private option — will remain in Medicaid rather than eventually moving over to free private coverage, as eventually envisioned by the private option legislation. 

Section 4's stated purpose: "Ensure a focus on future improvements; and Limit the state’s exposure to additional costs."

Arkansas Department of Human Services spokesperson Amy Webb elaborated:

The rationale is twofold, that we should make sure the Independence Accounts work as expected for the 100-138 percent group before expanding (which would cost additional state funds) and that the taskforce and DHS should be focused on the long term improvement and not get bogged down with interim steps.

Both policy shifts would likely save money: The HIAs come with a price tag and moving folks from traditional Medicaid to private option plans would probably cost more (and people already covered under Medicaid before expansion aren't fully funded by the feds; they have the lower, non-expansion 70 percent match rate).

If passed, this is also good news for beneficiaries below the poverty line, who will avoid the imposition of co-pays and fees, not to mention an administratively confusing system. And advocates for beneficiaries were very concerned that moving from ARKids to private plans could cause problems in terms of access to care for kids and confusion for families. 

How's this for an ironic twist: Folks like me were worried that Hutchinson would continue the private option but add GOP-friendly tweaks that would make the policy worse. That's probably still his plan for 2017, but in the mean time? The only changes he's pushing for would actually make the policy better. 

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