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Medicaid's enrollment takes a dip

Private option’s costs up by $6.89 by Andy Davis | October 10, 2015 at 3:51 a.m.
Graphs and information about private-option costs.

The number of people approved for coverage under Arkansas' expanded Medicaid program rose to 263,387 in July before falling by almost 29,219 by the end of September, according to numbers released Friday by the state Department of Human Services.

Meanwhile, the cost per person of the so-called private option, which covers most of the newly eligible adults, has increased from June to September by $6.89, from $484.94 to $491.83.

The federal waiver authorizing the program sets a monthly cost target of $500.08 per enrollee for 2015.

The drop in enrollment is because of an effort by the Human Services Department to verify the incomes of more than 600,000 Medicaid recipients, including private-option recipients, who have been enrolled for at least a year.

Originally scheduled to start last fall, the review didn't begin until mid-June because of difficulties the department encountered in installing a new computerized enrollment and eligibility verification system.

The department then stopped the reviews Aug. 21, when officials with the federal Centers for Medicare and Medicaid Services said they would issue "changed guidance" about the state's practice of giving Medicaid recipients 10 days to respond to requests for income-related records.

Before it resumes the review, the department is revising the income-request notices to give recipients 30 days to provide the records. It also is exploring changes to help speed up the eligibility verification process.

Approved by the Arkansas Legislature in 2013, the expansion of the Medicaid program extended eligibility to adults with incomes of up to 138 percent of the federal poverty level: $16,242 for an individual, for instance, or $33,465 for a family of four.

The expansion, known as the private option, uses Medicaid funds to buy coverage on the state's federally operated health insurance exchange.

At the request of Gov. Asa Hutchinson, the Legislature earlier this year created a task force to recommend a replacement program for the private option that would start in 2017, when Arkansas is expected to begin paying 5 percent of the private option's cost.

A consultant to the task force this week recommended keeping the private option while adding requirements to encourage healthful behavior and for unemployed recipients to find jobs. The task force is expected to make recommendations in December.

The numbers reported Friday by the Human Services Department show that, of those who had completed enrollment as of Aug. 15, 187,246 were signed up for the private option.

About 22,000 others were assigned to the traditional Medicaid program because they were considered to have exceptional health needs.

Thousands of others had been approved for coverage but had not yet completed enrollment.

The department's payment to insurance companies for private-option coverage in September included an average premium of $355.13, an increase of $4.85 compared with the June premium.

The department also pays the companies an additional subsidy, known as a cost-sharing reduction payment, to reduce or eliminate enrollees' out-of-pocket charges for medical care.

It also pays directly for nonemergency medical transportation and other so-called wraparound benefits that are required to be provided under Medicaid rules but aren't covered by the insurance companies' plans.

From June to September, the average cost-sharing reduction payment rose by $1.78, to $132.17, while the average cost for wraparound benefits increased 26 cents, from $4.27 to $4.53.

The federal government is expected to pay the full cost of the private option through 2016 as long as the cost over three years is below a cap that will be calculated using monthly targets.

Last year, the monthly cost of the private option averaged $489.70 per enrollee -- more than $12 above the waiver's target of $477.63 for 2014.

But the cost this year through September is $487.82, $12.26 below the target this year of $500.08.

Next year, the target rises to $523.58.

If Arkansas' cost over the three years exceeds the cap, it will owe the difference to the federal government.

Human Services Department spokesman Amy Webb said she didn't know the reason for the increase in the average cost.

Premiums are set for the year but vary according to an enrollee's age.

Sen. David Sanders, R-Little Rock and a sponsor of the law creating the private option, said he expects the cost to come in below the cap.

On the basis of the cost through September, the total cost is about $4.6 million below the cap. And he said he expects the cost next year to remain relatively flat.

"If we were looking at incredible increases and numbers that would be detrimental to the state budget, we would be having a different conversation right now about what the premium assistance model looks like going forward," he said.

A Section on 10/10/2015

Print Headline: Medicaid's enrollment takes a dip


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