The Arkansas Department of Human Services said Wednesday that changes it's seeking for the "Arkansas Works" medicaid expansion could save the state as much as $93 million over five years.
The changes comes as Arkansas is paying 5 percent of the cost for the program, with the feds picking up the rest of the bill. The state is set to pay 10 percent by 2020.
Gov. Asa Hutchinson is expected to call a special legislative session next week aimed at approving legislation that would:
- Allow DHS to seek a waiver from the feds that would cap eligibility at 100 percent of the federal poverty level effective Jan. 1, 2018. That is down from a cap of 138 percent.
- Allow DHS to seek a waiver to add a work requirement that will be implemented over two years, mirroring what is required of the state's SNAP beneficiaries.
- Require a study be conducted by October to recommend ways the state can encourage small businesses to offer affordable insurance to employees.
- Amend Arkansas law so that the state would have the final say on who is eligible for Arkansas Works or traditional Medicaid. Right now, Arkansas is subject to often incorrect federal records, DHS officials said.
DHS Director Cindy Gillespie said that, as of March 3, the 61,794 Arkansans with incomes from 100 to 138 percent would be covered via federal subsidies and remain on the same plan if their employers don't offer affordable insurance. "Affordable" in this context means premiums that cost 9.69 percent of their household income.
DHS wants to gradually transition those Arkansas Works participants over 100 percent of the poverty level to federal subsidies or employer plans by the end of next year.
Worst-case scenario, they expect the new cap to increase premiums by 1.7 percent.
More to Pay Premiums
People at or below 100 percent of the poverty level have not been required to pay anything toward their premiums, but those above it — whether on Arkansas Works or with federally-subsidized plans — have been required to pay 2 percent of their incomes.
Gillespie said the 2 percent contributions range from $13 to $19 a month, although the department has set the rate at $13.
Thus far, only 25 percent of over 100 percent enrollees have been in compliance with the 2 percent requirement because there wasn't a penalty. It had "no teeth," the director said.
They couldn't lose coverage and became in debt to the state, but Arkansas could only collect the debt if the individual who didn't comply won the lottery.
So the state is also seeking the ability to drop insurance coverage if people who should be paying the 2 percent are not in compliance with that requirement.
Gillespie said Indiana did the same and saw compliance rise to 88 percent, with only 6 percent of enrollees losing coverage because of noncompliance.
On the work requirement, she emphasized that the department is working closely with insurance carriers to encourage individuals to comply. If they don't comply for nine months out of the year, they'll lose their coverage from the Arkansas Works program.
If the legislation passes and the waiver is approved by the feds as expected, DHS will start the work requirement for able-bodied adults ages 30-49 without dependent children in 2018. The work requirement for able-bodied adults ages 19-29 will begin in 2019.
There are several exemptions to the work requirement, and they all match up with the SNAP program's requirements.
Also, DHS officials reported that 88,019 able-bodied adults ages 19-49 enrolled as of March 27 had no known exemption from the work requirement. Of those, 68,303 had no income.
That's nearly 78 percent. Gillespie said that's important to note because the changes aim to "incentivize work" and move people "up the ladder" while focusing on people under the federal poverty level.