Arkansas officials should consider transferring more high-cost enrollees from the private option to the traditional, fee-for-service Medicaid program, a sponsor of the law that created the program said Monday.
At a meeting of the Health Reform Legislative Task Force, Senate President Pro Tempore Jonathan Dismang, R-Searcy, said he's concerned that health care costs of some enrollees are increasing the cost of coverage for others in the state's individual insurance market.
"If we do not have the mechanism to make sure those folks are in the right category with the right coverage, then we're going to continue to have this problem," said Dismang, considered one of the private option's legislative architects.
He also said state leaders should examine whether the private option is serving its intended purposes, including helping to hold down individual insurance market premiums.
"Right now I think we've forgotten about those goals," Dismang said.
Dismang and other task force members referred to a June 30 federal report showing that Arkansans covered in the state's individual insurance market last year appeared to be more expensive than their counterparts in other states.
The report also shows that the state's insurance companies, including those that participate in the private option, will receive about $90 million from a federal fund to offset the cost of insuring customers in the individual insurance market whose medical expenses last year totaled more than $45,000 each.
The task force was formed last year to recommend changes to the private option and other parts of the state Medicaid program.
The private option uses Medicaid funds to purchase coverage on Arkansas' health insurance exchange for people who became eligible for Medicaid under the expansion of the program approved by the Legislature in 2013.
The expansion extended eligibility to adults with incomes of up to 138 percent of the poverty level: $16,394 for an individual, for instance, or $33,534 for a family of four.
Arkansas has filed a request with the federal Centers for Medicare and Medicaid Services to make changes to the private option that Gov. Asa Hutchinson has said would encourage enrollees to stay employed and take responsibility for their health care.
The revamped program would be officially called Arkansas Works.
The 2010 Patient Protection and Affordable Care Act requires insurance companies to set premiums for their individual market plans based on the medical expenses of all their individual market customers in a state. In Arkansas, that includes private option participants.
Premiums for plans offered on the state's health insurance exchange fell by an average of about 2 percent in 2015 and increased by about 4 percent this year, according to the Arkansas Insurance Department.
Arkansas Blue Cross and Blue Shield, the state's largest health insurer, has requested an increase of 14.7 percent that would kick in next year. Little Rock-based QualChoice Health Insurance has requested an increase of 23 percent.
Insurance Commissioner Allen Kerr said he will make a final ruling on the companies' requests next month.
Although the private option covers most people who are approved for coverage under the expanded Medicaid program, about 10 percent of enrollees are assigned to the traditional, fee-for-service Medicaid program because they are considered to be "medically frail."
The designation is based on information from an online questionnaire that asks applicants about their health care needs. Applicants who fail to fill out the questionnaire after being approved for coverage are automatically assigned to a private plan.
A private option enrollee can be transferred to traditional Medicaid if it is discovered that the person needs services, such as long-term help with tasks such as dressing and eating at home, that private plans don't typically cover, state Medicaid Director Dawn Stehle said.
The state hasn't received "a high number of requests" for such transfers, she said.
Kerr noted that many people with costly medical conditions, such as Hepatitis-C, wouldn't necessarily be considered medically frail. And he said "over-utilization" of hospital emergency rooms isn't limited to those with exceptional health needs.
Sen. Jim Hendren, R-Sulphur Springs, chairman of the task force, said transferring high-cost enrollees from the private plans to traditional Medicaid is "kind of counterintuitive to the notion of insurance."
He said he wants to discourage enrollees from using hospital emergency rooms for medical needs that aren't urgent.
But during a meeting between U.S. Secretary of Health and Human Services Sylvia Mathews Burwell and state leaders, Hendren said he was told that the state couldn't require enrollees to pay a fee for emergency room use.
"Until we fix that, we will expect to have health care costs spiraling out of control," Hendren said.
Metro on 07/12/2016