Draft legislation released for continuation of private option | Arkansas Blog

Thursday, March 24, 2016

Draft legislation released for continuation of private option

Posted By on Thu, Mar 24, 2016 at 12:04 PM

HENDREN: Co-sponsor of legislation to establish "Arkansas Works," the governor's plan to continue the private option.
  • HENDREN: Co-sponsor of legislation to establish "Arkansas Works," the governor's plan to continue the private option.
Draft legislation is circulating today for "Arkansas Works," Gov. Asa Hutchinson's plan to continue the private option with some alterations that the governor negotiated with the Obama administration. 

The legislation, still in draft form and subject to change, is sponsored by the co-chairs of the Health Reform Legislative Task Force, Sen. Jim Hendren and Rep. Charlie Collins. You can read it here. The legislature is set to take up the legislation at a special session next month and it can pass with a simple majority. The tougher hurdle will come in the fiscal session. The Medicaid appropriation needs 75 percent approval in both the House and the Senate and a rump group of Tea Party Republicans are threatening to shut down the entire Medicaid program in order to block the private option (some Democrats have also hinted that they may not vote for it unless they get concessions from the governor). If the private option ends, it will leave a mammoth hole in the state budget and more than a quarter million Arkansans will lose their health insurance. 

The private option, the state's unique version of Medicaid expansion, uses Medicaid funds to purchase private health insurance for low-income Arkansans. The governor proposes making the following revisions, which he hopes will be enough to attract Republican support in the legislature. These policy changes are spelled out in the legislation, but the final details won't be official until the federal government approves a state plan amendment, likely in late summer (the feds won't approve anything until the state passes legislation). 

Incentives for wellness. If beneficiaries visit a primary care physician for an annual wellness checkup, they will receive additional benefits — vision and dental — not normally covered by Medicaid (and not currently covered by the private option).

Premiums for beneficiaries who make more than the poverty line. Beneficiaries who make more than 100 percent of the federal poverty line will be assessed small premiums. Those who fail to pay will not lose coverage but will accrue a debt to the state (this is likely uncollectable, but could be taken out of a future state tax refund). Those who failed to pay for three consecutive months would also lose the extra dental/vision benefits mentioned above (but these would be restored if the beneficiary paid what was owed). The premiums will be a maximum of 2 percent of income, around $20 a month for an individual right at the poverty line. 

Beneficiaries with no income will be referred to job training and job search programs. There is no requirement to participate, but beneficiaries will be alerted about opportunities for work programs. The legislation also states that "work training opportunities, outreach, and education about work and work training opportunities through the Department of Workforce Services" will be available to all beneficiaries, regardless of income level. 

Employer-sponsored insurance. Eligible beneficiaries who are employed and get offered insurance at their jobs that meets the standards of the Affordable Care Act must enroll in the ESI plan as opposed to signing up for a private option plan. Medicaid will pay the employee contribution and provide wraparound benefits so that the ESI plan is fully equivalent for beneficiaries in terms of cost and coverage to a private option plan. 

The Health Care Independence Accounts program will end. This was a convoluted scheme implemented by legislation in 2014 that created a version of health savings accounts for beneficiaries above the poverty line. These accounts were poorly conceived and participation was quite low; they will be scrapped, ending July 1, 2016. 

Eliminating 90-day retroactive eligibility. The Department of Human Services will seek a waiver from the federal government to eliminate retroactive eligibility. Right now, if a beneficiary signs up for coverage, the previous three months are also covered by the traditional Medicaid program. Under this change, coverage would only begin on the day beneficiaries sign up. The feds will likely want to hammer out a deal with assurances that this doesn't lead to gaps in coverage; Hutchinson has told providers that beneficiaries will be able to sign up at their first point of service, so providers won't be left holding the bag for uncompensated care. 

Support for special health care reporting made possible by the Arkansas Public Policy Panel.

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