Arkansans enrolled in the private option in its first year were more likely to get preventive health screenings and less likely to visit hospital emergency rooms than recipients of traditional Medicaid, according to an analysis of the state's expanded Medicaid program.
Private-option participants also were more likely to report they were able to get the care they needed than traditional Medicaid recipients, according to the report by the Arkansas Center for Health Improvement.
The report also found that the Medicaid program paid more for the average private-option enrollee's insurance premiums than it would have paid had those individuals been covered by the traditional Medicaid program, which pays health care providers directly for the same care.
But had everyone covered by the private option been shifted to the traditional Medicaid program, the cost to the state would have increased because it likely would have had to pay more to doctors and other providers, the report's authors wrote.
Adding the more than 212,000 private-option participants to the traditional program would have made it at least as expensive as the private option, the authors said.
"You can't increase demand tenfold without there being inflationary pressure on the supply side," Center for Health Improvement Director Joe Thompson said, referring to the increased cost that would have resulted from the number of nondisabled adults covered by Medicaid.
The report "validated much of what we already knew," Thompson said: that coverage under private health plans would cost more than traditional Medicaid but provide recipients with better access to care.
"Going forward, it will continue to be a question of was it worth it," he said.
The report by the nonprofit health policy center is the first installment in an evaluation that will cover the start of the private option in 2014 through a three-year "demonstration" period ending this year.
The evaluation, expected to cost a total of $4.6 million over four years, is required under the federal waiver issued in 2013 that authorized the private option.
The cost of the evaluation will be evenly split between the state and federal government.
That waiver extension request proposes making changes that Gov. Asa Hutchinson has said would encourage enrollees to stay employed and take responsibility for their health care.
Sen. David Sanders, R-Little Rock, a sponsor of the law creating the private option, called the evaluation "a good first read" but one that doesn't take into account the program's success in holding down premiums in the individual insurance market.
That aspect of the program is expected to be examined in the final report that will be issued by the end of 2017.
The cost of the private option could also be affected when insurance companies compare their spending on medical care with subsidies they receive from Medicaid to reduce or eliminate enrollees' copayments and deductibles. The companies could end up owing money to the Medicaid program, or vice versa, depending on how the spending compares with what the companies expected.
The evaluation is "incomplete in that we can't get at what the real costs are," Sanders said.
Arkansas created the private option in 2013 as a primary way of extending Medicaid coverage to adults with incomes of up to 138 percent of the federal poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.
Under the program, the state uses Medicaid funds to buy coverage for most of the newly eligible adults in plans that are commercially available through the state's federally run health insurance exchange.
More than 22,000 other Arkansans who became eligible under the expansion are covered under the traditional Medicaid program because their health needs are considered to be exceptional.
In the waiver extension application released Wednesday, the state Department of Human Services seeks permission to make changes such as charging premiums of about $19 a month to enrollees with incomes above the poverty level, providing coverage to some enrollees through subsidized employer plans and offering an extra benefit, such as dental coverage, as an incentive for enrollees to pay premiums and receive annual wellness exams.
If approved by the federal Centers for Medicare and Medicaid Services, the changes, which were endorsed by the Legislature in a special session last month, would take effect Jan. 1.
The revamped program would be known as Arkansas Works.
The interim report examined the effect of the private option by comparing enrollees in the private plans to nondisabled adults in the traditional Medicaid program, including those who became eligible for coverage under Medicaid expansion but were assigned to traditional Medicaid because of their greater health care needs.
Compared with those in traditional Medicaid, private-option participants who were surveyed were more likely to say they always received care when it was needed right away and that it was always easy to get the care, tests and treatment they needed, according to the report.
Private-option enrollees were also more quick to see a primary care doctor: 21.2 percent saw one within the first 30 days of enrollment, compared with 8 percent of those in traditional Medicaid.
Within the first 90 days of enrollment, 41.8 percent of private-option enrollees had seen a doctor, compared with 29.6 percent of those in traditional Medicaid.
Using claims data, the report's authors also found that private-option enrollees had fewer emergency room visits overall and fewer visits to the emergency room for needs that weren't considered emergencies, but that they were more likely to visit for needs that were emergencies.
But private-option enrollees with diabetes were less likely to get recommended blood tests.
Thompson said that could be due to Medicaid's patient-centered medical home program, which started in 2014 and encouraged such testing. Private insurers didn't join the medical home program until last year, he noted.
Examining costs, the report found that the average premium for a private-option enrollee was $485.05, while spending for the average traditional Medicaid recipient averaged $271.01 per month.
Similarly, it found that the monthly spending by insurance companies averaged $496.24 per enrollee. Because of the lower rates paid to providers by Medicaid, the same services could have been obtained through the fee-for-service program for $244.96 a month.
But the report noted that rates paid by the private plans were more than twice the rates paid by Medicaid in many cases.
If reimbursement rates for the entire Medicaid program were increased by just 14.5 percent, coverage under expansion of traditional Medicaid would be as expensive as coverage under the private option, the report found.
If the reimbursement rate increase was more limited, affecting only rates paid for physician-related services, a rate increase of 34.9 percent would make expanding traditional Medicaid as expensive as the private option, the report found.
Human Services Department spokesman Amy Webb said in an email that the report "provides data that not only helps us better understand" the private option but could also "help shape the next phase of this work, which will include an increased focus on individual wellness and personal responsibility."
A Section on 05/20/2016