Arkansas panels favor plan to shrink Medicaid rolls

Eligibility limits advance on special session’s first day

Gov. Asa Hutchinson on Monday greets lawmakers in the House chamber before his address to a joint session of the Legislature at the beginning of a special session he called to make changes to Arkansas Works.
Gov. Asa Hutchinson on Monday greets lawmakers in the House chamber before his address to a joint session of the Legislature at the beginning of a special session he called to make changes to Arkansas Works.

Legislation endorsing a plan to scale back Arkansas' expanded Medicaid program cleared committees of the state House and Senate on Monday during the first day of a special legislative session.

House Bill 1003 and its identical counterpart, Senate Bill 3, will go to the floor of their respective chambers today.

If they pass, the bills will each move to the other chamber. A final vote from each chamber on Wednesday would then send the bills to Gov. Asa Hutchinson for his signature.

The bills would direct the state Department of Human Services to seek a federal waiver allowing the state to move about 60,000 people off the expanded part of the health coverage program, known as Arkansas Works, by limiting eligibility to adults with incomes of up to 100 percent of the poverty level, instead of the current threshold, 138 percent of the poverty level.

More than 320,000 Arkansans were covered under Arkansas Works as of March 31.

The department also would be directed to seek federal approval to impose a work requirement on many of those who would remain covered under Arkansas Works.

Addressing a joint session of the Legislature, Hutchinson said the legislation would help build on changes that took effect Jan. 1 under a waiver granted by then-President Barack Obama's administration.

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Those changes included requiring enrollees with income above the poverty level to pay premiums of up to $13 a month and referring enrollees to job training and placement services offered by the Department of Workforce Services.

"We are now taking a more bold approach" because of flexibility the state expects from President Donald Trump's administration, Hutchinson said.

He noted that out of 106,654 enrollees who had been referred to the Workforce Services Department in the first three months of this year, only 3,669 had used one of the services.

"We are not punishing people by requiring them to find a job or access services or finish their education or to seek treatment for an addiction," Hutchinson said. "To the contrary, success in any and all of these areas will open the door to new opportunities."

He said restricting Medicaid eligibility to those at or below the poverty level would save the state about $66 million over four years.

The move also would save money for the federal government, he said, because some people could enroll in plans offered by their employers.

Others would qualify for federal tax subsidies to help pay for their coverage in plans offered on the state's health insurance exchange.

Most Arkansas Works enrollees are covered by such plans now, but with Medicaid funds, rather than tax credits, paying most or all of the premium.

Hutchinson said insurance companies will help ensure that Arkansas Works enrollees "are seamlessly transitioned into the marketplace."

The insurers "have a lot at stake in this, and so does my administration," Hutchinson said.

He said state officials will also "carefully monitor and evaluate how these changes may affect premiums and uncompensated care, and we will pay special attention to our rural hospitals and our health care providers."

Human Services Department Director Cindy Gillespie told members of the Senate Public Health, Welfare and Labor Committee later Monday that she doesn't expect the changes to create an increase in uninsured Arkansans showing up at hospital emergency rooms.

But in an "overabundance of caution," she said, the state will work with the Arkansas Hospital Association to monitor the issue.

The department has started a "permanent working group" with the organization on financial issues, she said.

"We're also going to work together over the next few months, before this gets put in place, to figure out what some of our options are to help the hospitals, should we start to see" an increase in uncompensated care, Gillespie said.

In the House Public Health, Welfare and Labor Committee, where HB1003 passed with some dissent, Rep. Fredrick Love, D-Little Rock, said the proposed changes would cause premiums to rise, costs to climb for some, and uncompensated care to increase.

Rep. Deborah Ferguson, D-West Memphis, expressed similar concerns.

"We all want people to be personally responsible, but most of these people are working minimum wage jobs," Ferguson said. "They don't necessarily have bank accounts. They live very differently than most of us that pay insurance premiums.

"I just think it's going to take a lot of education and a lot of outreach."

Rep. Kim Hammer, R-Benton, said he supported HB1003 because it would allow the state to take back some control from the federal government.

And Rep. David Meeks, R-Conway, who's been against the Medicaid expansion, said he supported this bill because it would reduce the program's cost.

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Speaker of the House Jeremy Gillam, (from left) Senate President Pro Tempore Jonathan Dismang and Rep. Kim Hammer talk onthe House floor Monday before a joint session of the Legislature.

The federal government paid the full cost program from 2014, when the expansion took effect, through the end of last year.

Under the 2010 Patient Protection and Affordable Care Act, which authorized the expansion, states such as Arkansas that expanded Medicaid are responsible for 5 percent of the cost this year. The states' share then rises every year until it reaches 10 percent in 2020.

"My problem with Arkansas Works, the private option, was the sustainability of the program," he said. "What this bill does is it helps us to cover folks that need health insurance and it also provides more sustainability.

"Are we where we need to be at? No, but it moves us in the right direction."

SB3 cleared the Senate public health committee in a voice vote, with no members audibly dissenting.

In response to questions from the panel's two Democrats, Eddie Cheatham of Crossett and Stephanie Flowers of Pine Bluff, Daryl Bassett, director of the state Department of Workforce Services, said he expected the increase in Arkansas Works enrollees seeking help with job training or employment to be manageable.

"If we start getting deluged, then we'll have to make some tweaks," Bassett said.

Mirroring a work requirement in place for food stamp recipients, the requirement for Arkansas Works enrollees would likely only apply to enrollees who are under age 50, do not live in a home with dependent children and are not full-time high school or college students, Human Services Department officials have said.

Those now classified as "medically frail" would also be exempt from the requirement, along with those who pregnant, caring for an incapacitated person, receiving unemployment benefits or participating in a drug or alcohol treatment program.

Cheatham also expressed concern about uncompensated care, but he said he ultimately voted for the bill because it would save the state money and encourage enrollees to take advantage of Workforce Services Department programs.

"I think the thrust is not to just kick people off insurance," he said.

The Medicaid legislation would also give the Human Services Department the option of declaring the state an "assessment" state, meaning Medicaid applications submitted to the federal government would have to go to the state for final approval.

Currently, Arkansas is a "determination" state, meaning the state accepts the determination of federal officials on whether an applicant is eligible for coverage.

Also clearing committees in each chamber were House Bill 1004 and Senate Bill 4, which would abolish the Arkansas Health Insurance Marketplace Legislative Oversight Committee and shift that committee's duties to the Legislative Council.

Created by the Legislature in 2013, the marketplace established a state-run health insurance exchange for small businesses and approves plans offered in the health insurance exchange for individual consumers.

HB1004 and SB4, which were endorsed by the House and Senate Insurance and Commerce committees, would also direct the council, the Legislature's governing body when lawmakers are not in session, to conduct a study of the marketplace's future.

A Section on 05/02/2017

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