The additional premium increases approved last week for plans offered on Arkansas' health insurance exchange will have a "minimal impact" on the cost of the state's expanded Medicaid program, a spokesman for Gov. Asa Hutchinson said Monday.
Arkansas Insurance Commissioner Allen Kerr approved the increases, which will take effect Jan. 1, on Friday in response to President Donald Trump's decision to stop reimbursing insurers for the enhanced coverage they are required to provide to low-income people under the 2010 Patient Protection and Affordable Care Act.
As a result of the increases, the state will pay higher premiums next year to provide coverage under Arkansas Works, as the expanded part of the state's Medicaid program is known.
But, to offset that cost, the state will no longer provide insurers with its own version of the additional subsidies, known as cost-sharing reduction payments.
"We expect no impact for the remainder of this year and minimal impact for next year" from the increased premiums, Hutchinson spokesman J.R. Davis said.
The cost-sharing subsidies that Trump ended are one of two types of assistance that have been provided under the Affordable Care Act to people who don't qualify for Medicaid and buy insurance through health insurance exchanges.
Tax credit subsidies lower the premiums for many consumers with incomes below 400 percent of the poverty level: $47,520 for an individual, for instance, or $97,000 for a family of four.
The cost-sharing payments reimburse insurers for increasing the amount of coverage provided through so-called silver-level plans to consumers with incomes below 250 percent of the poverty level.
Such plans are designed to cover 70 percent of a typical consumer's medical expenses. For lower-income consumers, however, the plans are modified so they cover up to 94 percent of the expenses. The cost-sharing subsidies reimburse insurers for providing that enhanced coverage.
Under a waiver issued by the federal government, Arkansas has used the silver-level plans to provide coverage to the bulk of people covered under the state's expanded Medicaid program.
The Medicaid program pays the full premium and makes cost-sharing reduction payments similar to those created by the Affordable Care Act.
Ruling in a lawsuit filed by Republicans in the U.S. House of Representatives, a federal judge found that funding for the Affordable Care Act's cost-sharing payments was never approved by Congress.
The judge had allowed the payments to continue while the case was on appeal, but Trump ended them Thursday after Attorney General Jeff Sessions issued an opinion agreeing with the judge's conclusion.
That move didn't affect Arkansas' Medicaid-funded cost sharing payments.
But the state will stop providing those payments next year because the increased premiums will make them unnecessary, state Department of Human Services spokesman Amy Webb said.
The rates approved Friday include an average increase of 14.2 percent for plans offered by Arkansas Blue Cross and Blue Shield, 21.4 percent for those offered by St. Louis-based Centene and 25 percent for plans offered by Little Rock-based QualChoice Health Insurance.
Before Trump's announcement, the insurers had been planning smaller increases: 7.8 percent for Arkansas Blue Cross and Blue Shield, 9.9 percent for Centene and 9 percent for QualChoice.
Approved by the Republican-controlled Legislature and then-Gov. Mike Beebe, a Democrat, in 2013, the state's Medicaid expansion extended coverage to adults with incomes of up to 138 percent of the poverty level.
This year, for instance, the income cutoff is $16,643 for an individual, or $33,948 for a family of four.
According to figures released Monday, enrollment in the program fell last month by almost 1,200 people, to 307,592.
The total as of Sept. 30 included 283,670 people who were assigned to coverage in the exchange plans and 23,922 enrollees who were being covered by the traditional, fee-for-service Medicaid program because they were considered "medically frail," with health needs that private plans typically don't cover.
The Department of Human Services also reported that the average monthly cost per enrollee fell by $2 in September, to $522.32.
That cost included an average monthly premium, which varies according to an enrollee's age, residence and plan, of $375.94, and an average cost sharing payment of $142.47.
The Medicaid program also paid an average of $3.91 per enrollee for benefits, such as non-emergency transportation, that the private plans don't cover.
Arkansas is paying 5 percent of the program's cost through Dec. 31 and 6 percent starting in January, with the federal government paying the rest.
The state has budgeted a total of $100 million for its share, out of a total cost of $1.8 billion, in the fiscal year that ends June 30.
The state's share will rise every year until it reaches 10 percent in 2020.
It also will owe additional money if the cost from 2017-2021 exceeds a cap that will be calculated based on monthly, per-enrollee caps, which increase each year.
The cap this year is $570.50 and will increase in January to $597.32.
Webb said state officials expect the cost to stay below the cap.
To limit the cost further, Hutchinson has applied for amendments to the waiver that move about 60,000 Arkansans off of Arkansas Works by limiting eligibility to people with incomes of up to 100 percent of the poverty level starting in January.
The state also would impose a work requirement on many of those remaining in the program.
A Section on 10/17/2017