About 10,000 more private-option enrollees and other Arkansas Medicaid recipients have been notified this week that their coverage will end on July 31, raising to 25,000 the number whose coverage is set to end, the director of the state Department of Human Services said Thursday.
Also on Thursday, representatives from Arkansas Blue Cross and Blue Shield told members of the state Legislature's Health Care Reform Task Force that, compared with customers enrolled in traditional private plans, private-option enrollees have been more frequent users of the emergency room and were less likely to see primary-care doctors.
And John Ryan, chief executive of Centene Corp. subsidiary Celtic Insurance Co., told legislators that the recent policy cancellations have prompted his company to consider amending its requested rates for private-option plans next year.
"We're talking about it right now," he said.
The termination notices are part of an annual check of the incomes of about 600,000 Medicaid recipients, including about 200,000 private-option enrollees, whose eligibility is determined by federal rules that went into effect Jan. 1, 2014.
The first round of annual checks should have started last fall but was delayed until a month ago because of difficulties the Human Services Department has encountered in replacing its 25-year-old electronic eligibility-verification and enrollment system.
John Selig, the Human Services Department's director, told the task force that the department has used the new system to check the eligibility of about 150,000 private-option enrollees and other Medicaid recipients.
About 65,000 were found to still be eligible. The others were found to have incomes that appeared to be 10 percent higher or lower than what the applicant initially reported a year or more ago.
Those enrollees have not yet responded to requests from the department for pay stubs or other records related to their incomes.
About 25,000 were notified that their coverage will end at the end of this month because they did not respond to the request for information within 10 days, Selig said.
However, he said their coverage will not be disrupted if they provide the information before the end of the month.
In addition, Selig said the department has sent notices to the households of about 75,000 people in the traditional Medicaid program, including children covered by ARKids First, asking that information about the recipients' eligibility be submitted to a Human Services Department office or through its website, access.arkansas.gov.
That information must be submitted within 30 days.
The Human Services Department has said it expects to have the annual checks completed before a Sept. 30 deadline set by the U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services.
If a Medicaid recipient successfully appeals a termination, the coverage can be reinstated retroactively to the date of termination if the appeal is submitted within 90 days, Selig said.
In the case of a private-option enrollee, the fee-for-service Medicaid program would cover medical expenses after the initial termination, Human Services Department spokesman Amy Webb has said.
Selig said the department has asked health care providers to encourage their patients to respond to the notices from the Human Services Department.
He acknowledged that the department's staff has been "overloaded" with inquiries from those who have received the notices.
Ryan, who said his company insures about 40,000 private-option enrollees, said his company is studying the effect the cancellations will have on its profits.
Sam Vorderstrasse, chief actuary for Arkansas Blue Cross, said the cancellations were also a concern for his company, which insures more than 140,000 private-option enrollees.
"Those are the kinds of things, as an actuary, you don't like to hear," he said.
The cancellations could have an effect on the average cost of insuring private-option enrollees, he said, because people with expensive medical conditions might be more likely to take the necessary steps to prevent their plans from being canceled.
He declined to say after the task force meeting whether his company is considering modifying its requested rates for 2016 in light of the cancellations.
He did note during the meeting that none of the companies requested an increase for plans on the exchange, including private-option plans, of 10 percent or more, which would have triggered a requirement for public notice of the requested increase.
The companies were required to submit their requested rates for 2016 to the Arkansas Insurance Department in May. The Centers for Medicare and Medicaid Services is expected to approve the rates by September.
In addition to delaying the annual eligibility checks, problems with the enrollment and eligibility system also have caused delays in processing applications.
Cindy Acree, a former member of the Colorado House of Representatives who now lives in Arkansas, said she was notified in May that her application for coverage was denied because records showed that she was incarcerated.
"Well, it's obvious that I'm not in jail," she said.
She spent 51 hours on the phone trying to reach someone who could correct the error. Eventually, she said, someone with the Human Services Department told her that her Social Security number was similar to a prison inmate's.
Selig said the department has been trying to rectify the problems.
"We're just not satisfied with where we are," he said.
Under the private option, the state uses federal Medicaid dollars to buy insurance on the state's health insurance exchange for more than 218,000 low-income Arkansans.
The state created the program as a primary way to expand Medicaid coverage, as authorized under the 2010 Patient Protection and Affordable Care Act, to extend coverage to Arkansans with incomes of up to 138 percent of the poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.
As long as the cost of the private option stays within certain limits, the federal government is expected to pay the cost of the program until 2017, when the state will begin paying 5 percent of the cost.
The state's share will then increase every year until it reaches 10 percent in 2020.
Citing concerns about that cost, Gov. Asa Hutchinson earlier this year called on the Legislature to create the task force to recommend changes to the state's Medicaid program, including an alternative way of covering private-option enrollees after 2016.
Compared with customers in employer plans, private-option enrollees have gone to the emergency room as many as five times more often and are hospitalized about twice as often, Matt Flora, director of medical informatics with Arkansas Blue Cross and Blue Shield, said.
Vorderstrasse, the Blue Cross actuary, said after the meeting that private-option enrollees' costs and emergency-room use also have been higher compared with customers enrolled in non-Medicaid plans on the state's health insurance exchange.
Although private-option enrollees tend to be younger than others in exchange plans, they also tend to have more medical problems, he said.
Although they have been less likely to visit a primary-care doctor, those who do visit a doctor tend to do so more often, he said.
He said the enrollees' expenses were in line with what the company expected. He told lawmakers the company has "seen a [profit] margin in the 2014 calendar year, but it's not excessive."
He added that the company does not expect to have to issue any refunds for last year on the basis of a requirement under the Affordable Care Act for insurance companies to spend at least 80 percent of premiums on medical care rather than administrative expenses.
Ryan, the Celtic Insurance executive, said the emergency-room visits by his primary-care enrollees was "higher than we would have liked to have seen" and that visits to primary-care doctors were lower than the company wanted.
But he said the enrollees' overall medical costs came in below the company's expectations.
Representatives of Centene, QualChoice Health Insurance and Blue Cross said they have been encouraging customers to visit a primary-care doctor so illnesses can be addressed before they become emergencies.
Arkansas Blue Cross earlier this year began sending out letters to private-option enrollees and others enrolled in exchange plans who haven't seen a doctor to encourage them to visit one, Flora said. For those who still don't visit a doctor, the company is following up with a second letter providing information on a doctor near the customer's home.
Metro on 07/17/2015