Arkansas Officials Hold Hearing on Insurance Expansion

by Andrew DeMillo, The Associated Press  on Tuesday, Jul. 2, 2013 3:11 pm  

LITTLE ROCK - Several Arkansas community health centers on Tuesday asked the state to drop a provision in its plan to expand subsidized health insurance coverage that they said would cut the amount of money they receive for their services.

Officials from the centers asked the state Department of Human Services to remove the provision from its plan to purchase private insurance for thousands of low-income workers using federal Medicaid dollars. Lawmakers approved the "private option" as an alternative to expanding Medicaid's enrollment, but the plan still must win federal approval.

At a public hearing on the waiver DHS plans to submit to carry out the insurance expansion, the centers objected to a provision that would change the way reimbursement rates are calculated. Under the proposal, federally qualified health centers and rural health centers would be reimbursed at rates negotiated with insurance carriers participating in the program.

The change would mean a loss of money for the centers and potentially lead to cuts, several officials said at the hearing.

"If I lose these funds, the model of care I provide could be in jeopardy," said Sandra Brown, CEO of Jefferson Comprehensive Care System Inc.

Carol Raines, CEO of Boston Mountain Rural Health Center, said the loss of money could lead to layoffs at her facilities.

"Worst-case scenario, we could end up closing sites," Raines said.

Under the private option law, Arkansas would accept the federal money allocated for Medicaid expansion under the federal health care overhaul but would use it to buy private insurance for about 250,000 eligible low-income residents. Those individuals who earn up to 138 percent of the poverty line - or $15,415 per year - would purchase subsidized private insurance through the state's insurance exchange.

The waiver drafted by DHS mostly mirrors the private option measure that Gov. Mike Beebe signed into law in April.

Andy Allison, the state Medicaid director, said the provision on reimbursements was part of informal discussions as the private option plan was being drafted but isn't in the law.

"The reason the waiver is proposed is to maintain consistency with the theme and the dominant perception of the private option as Medicaid funding, but private coverage," Allison said. "The waivers that you see are intended to enable the purchase of private coverage, and that means really not applying Medicaid specific rules to the (insurance companies) or just to private option participants in the exchange."

The hearing, which drew about five dozen people, was the first of three the state plans to hold before submitting its waiver Aug. 2. DHS plans to hold another hearing July 8 in Fort Smith, and Allison said a third was planned but a time and location have not been set yet.

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