Newly Insured 'Private Option' Arkansans Present Challenges, Opportunities

by Gwen Moritz  on Monday, Sep. 1, 2014 12:00 am  

Last week, the Arkansas Democrat-Gazette’s left-leaning columnist John Brummett said that Arkansas’ unique “private option” approach to Medicaid expansion “threatens to be the most thoroughly successful public policy and government program — by idea and execution — that I’ve covered in 40 years.”

On the same day, Caleb Taylor wrote on conservative blog The Arkansas Project that the announced closing of Crittenden Regional Hospital in West Memphis was proof that the “final defense” of the private option had failed, just like every other argument in its favor.

Clearly, the political debate over the private option is far from over. Eight months isn’t enough time to assess the long-term effectiveness or sustainability of the program, which uses federal Medicaid dollars to buy private insurance for the working poor from the new health care marketplace created to comply with the Affordable Care Act.

Whether thoroughly successful, a total failure or something in between, this much is sure: Roughly a quarter-million Arkansans who did not have health insurance in 2013 are now insured, mostly because of the private option, and this historic deluge of new health care customers bring with it challenges and opportunities.

There is “pent-up demand” among the newly insured for services that they previously could not afford, industry insiders say — almost always using the same words — and this is both a blessing and a headache. Many of the newly insured have no experience with how insurance works or the best ways to access the services to which they are now entitled. Some are making unreasonable demands while others are asking a lot of time-consuming questions.

David Wroten, executive vice president of the Arkansas Medical Society, said physician members of his organization have generally reported two phenomena associated with the wave of newly insured: “Yeah, we’re seeing more people,” he said. “We’re seeing a few people that we haven’t seen before. But it’s been manageable. And No. 2, they were just totally appreciative of being able to have a relationship with a doctor.”

Who Are They?

First, some numbers. No one knows exactly how many Arkansans have gained insurance as a direct result of the ACA, commonly known as Obamacare. A Gallup poll released last month found that the percentage of Arkansans who were uninsured had dropped from 22.5 percent in 2013 to 12.4 percent as of June 30, and the 10.1 percentage point difference would represent nearly 300,000 people. But polling is an inexact science.

How many are insured through the private option is known. By the end of July, according to the Arkansas Department of Human Services, 183,815 people had applied and completed enrollment in the private option program. Another 8,395 had applied and been determined to be eligible but had not yet completed enrollment, and thousands are still being added each month.

The private option, like the expansion of traditional Medicaid that about half of all states have adopted, is available to households earning up to 138 percent of the federal poverty level. In Arkansas, according to DHS spokeswoman Amy Webb, 82 percent of the new enrollees live at or below the poverty line, which was still too wealthy for adults to qualify for Medicaid before Obamacare.

Fifty-nine percent of private option enrollees are female, and 66 percent of them are between 19 and 44 years old. “That’s key,” Webb said, “because the younger they are, the lower the premiums” the Medicaid program must pay to the private insurance companies.

Other newly insured Arkansans are buying individual policies on the state’s new insurance exchange, also part of the ACA, in order to take advantage of sliding tax credits available for households earning up to 400 percent of poverty. Still others are signing up for insurance through their employers in order to avoid a tax penalty, the enforcement of which seems to be in disarray.



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