Gov. Asa Hutchinson said Wednesday that federal officials have approved most of his proposed changes to the state's expanded Medicaid program, but they won't allow the state to offer as much help to businesses as he had hoped.
He said he plans to pursue further changes next year under the administration of Donald Trump.
"We wanted to go ahead to do this because we've got 300,000 Arkansans that's got a cliff Jan. 1, and we wanted to make sure they had a comfort level that their health care is going to continue with these reforms in place," Hutchinson said.
Hutchinson spoke two days after meeting in Washington with U.S. Health and Human Services Secretary Sylvia Burwell in an attempt to reach an agreement on the final details of the program that will become known as Arkansas Works next month.
The program will add changes to the expanded portion of Arkansas' Medicaid program that Hutchinson has said will encourage enrollees to stay employed and take responsibility for their health care.
Those changes, approved by the Legislature in a special session in April, include charging premiums of $13 a month to enrollees with incomes above the poverty level, referring enrollees to job-training programs, limiting coverage for medical expenses incurred before an applicant enrolls, and providing coverage to some enrollees through employer health plans.
Most enrollees would continue to receive coverage through the so-called private option, which uses Medicaid funds to buy coverage in private plans offered through the state's health insurance exchange.
The governor said Burwell told him in a phone call Tuesday night that she would issue a letter Wednesday extending the waiver that authorized the private option and making the changes sought by Hutchinson under Arkansas Works.
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"We made it clear that we'll be seeking additional waivers" from the Trump administration, Hutchinson said.
He said he discussed health care during a brief phone call with Trump last week.
"He is very firm about his conviction that the states need more flexibility," Hutchinson said.
Hutchinson spokesman J.R. Davis said Wednesday evening that state officials had not yet received Burwell's letter.
First approved by the Republican-controlled Legislature and Gov. Mike Beebe, a Democrat, in 2013, the expansion of the state's Medicaid program extended coverage, as authorized under the federal 2010 Patient Protection and Affordable Care Act, to adults with incomes of up to 138 percent of the poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.
The expansion was providing coverage to more than 324,000 Arkansans as of Sept. 30. That included 301,009 people who were signed up for private plans and 23,309 others who were placed in the traditional, fee-for-service Medicaid program because they were considered to be "medically frail," with health needs that private plans typically don't cover.
In his request for an extension of the private-option waiver, which was set to expire at the end of this year, the Republican governor proposed having the Medicaid program pay up to 75 percent of the cost of coverage in employer-sponsored plans for enrollees whose employers choose to participate.
The employers would be responsible for paying at least 25 percent of the total premium. Employees with incomes above the poverty level would also contribute, paying a premium of up to 2 percent of their incomes.
The assistance would be available to businesses with 50 or fewer employees, but could eventually be extended to larger employers, according to the extension request.
Hutchinson said Wednesday that Burwell had approved offering help to businesses, but only those that haven't previously offered coverage to employees.
"The question was, what's the financial incentives we're going to give to employers," Hutchinson said. "Mine was broader than what [President Barack Obama's] administration wanted to give."
The restriction means the state likely won't sign up as many employers as he had hoped, he said.
A consultant to the state Department of Human Services estimated last year that about 7,700 enrollees were eligible for coverage in employer plans.
"I think you'll have fewer employers that will try to make the switch because it will ultimately cost them money," Hutchinson said.
"We wanted to give them financial incentives because it would still save taxpayers money, but we were restricted on that."
In addition to expanding the assistance for employers, Hutchinson said he plans to seek approval from the Trump administration to impose a work requirement on enrollees, something the Obama administration has opposed.
He said he hopes to see Congress continue federal support for Medicaid expansion while transforming Medicaid into a "block grant" and giving states more flexibility to decide how to administer the program.
"If you give us the federal dollars right now for the Medicaid program and give us the flexibility to administer it, then we will be able to keep the Medicaid expansion with more constraints and more cost sharing, with more work requirements," Hutchinson said.
The changes would help limit the program's enrollment, which has surpassed the 250,000 people state officials initially estimated would be eligible, he said.
"We can't have that unlimited, unpredictable future in terms of the cost to the state," Hutchinson said.
Sen. Jim Hendren, R-Sulphur Springs, said Trump's election last month likely saved Arkansas' Medicaid expansion by giving lawmakers the hope of imposing more restrictions -- an ironic outcome, Hendren noted, given that Trump campaigned on a promise to repeal the Affordable Care Act.
Without the prospect of further changes, he said he and other lawmakers would have been ready to reject funding for the expansion during next year's legislative session.
U.S. congressional leaders have pledged to repeal and replace the health care law.
Hendren, who is Hutchinson's nephew, is a chairman of a task force that has been exploring changes to the private option and other parts of the Medicaid program.
"I tell people what we're entering in 2017 is the Wild West of health care reform, because I do think that states are going to get the flexibility that we've asked for for years," he said.
A Section on 12/08/2016