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Medicaid Fallout: Insurers, MCOs in State Adjust to Loss of EnrolleesLock Icon

5 min read

While Arkansas made national headlines this year for the state’s disenrollment of tens of thousands of people on Medicaid, the effect of the loss of those customers on private insurance companies and managed care organizations in the state has gotten less attention.

As of October, the Arkansas Department of Human Services had removed more than 427,000 Arkansans from Medicaid since April 1. That’s the date when normal eligibility requirements were reinstated after the end of the federal COVID-19 public health emergency, which prohibited states from removing people from insurance plans.

As part of the Obama-era Medicaid expansion, the state pays private insurers to provide health insurance policies to qualifying Arkansans under the Arkansas Health & Opportunity for Me program, or ARHOME. This program previously has been known as the “private option” and Arkansas Works.

Arkansas Blue Cross & Blue Shield is one of two private insurers that offer coverage for ARHOME participants. Ambetter, which is owned by Centene Corp. of St. Louis, is the other. Centene did not respond to Arkansas Business’ request for comment for this story.

Arkansas Blue Cross has lost more than 71,000 ARHOME members, representing 46% of its clients in that program, as a result of the mandated Medicaid unwinding, Max Greenwood, Arkansas Blue Cross vice president of government and media relations, told Arkansas Business.

In total, DHS removed 160,912 individuals from ARHOME, according to data from the agency. DHS spends, on average, between $700 and $800 a month for an individual plan. The decrease in Blue Cross members alone, based on an estimate of a $750 monthly premium, would result in as much as $50 million or more per month in lost business from the state.

ARHOME Enrollment and Spending
March-August 2023



Total Cost

Avg. Per Person

























Source: Arkansas Department of Human Services

“Generally, you don’t have big swings [in enrollment],” Greenwood said. “What this redetermination process resulted in was a significant swing.”

An annual survey of state Medicaid directors conducted by KFF (formerly the Kaiser Family Foundation) found that states expect national Medicaid enrollment to drop by 8.6% next year, an estimate that reflects “a dramatic year-over-year decline,” KFF said.

“We are looking at a situation where we thought we were going to have 46% more folks in that block of business than we do,” Greenwood said. “Because of the way ARHOME is configured, you really don’t have the ability to make that up. All you can try to do is price it accurately because there is a cap [on rates], so you can’t go over whatever that cap is.

“In a way, that puts payers in a challenging position,” Greenwood said. “I think we did as much outreach as humanly possible prior to DHS beginning their process, but this is a very transient population so it’s hard to communicate with them.”

The insurer has already set rates for 2024. Providers set rates for the following year months in advance, so the impact of the ARHOME disenrollment has not been factored into 2024 premiums, Greenwood said.

Next year’s rates for Blue Cross’ fully insured business, which includes individual, small, and large group policies, will be higher because of various pieces of state legislation passed this year that will add to the cost of health care services, she said.

“We did not have the full picture, so basically it is what it is for 2024,” Greenwood said. “In 2024, we will look at the full experience of 2023 and see what happens.”

Greenwood said some of the decline in enrollees may be made up during this fall’s open enrollment period, when those who were removed from the ARHOME program could become active again.

“We knew this would be an anomaly. I really don’t even know how you would try to mitigate for it,” Greenwood said. “Obviously, it’s going to impact our bottom line.”

Arkansas Blue Cross & Blue Shield’s revenue rose from $2.4 billion in 2019, before the pandemic, to $2.8 billion in 2022, according to the insurance provider.

“There is just no way to know right now what [rates] will be for 2025,” Greenwood said.

Planning Makes a Difference

There are four managed care organizations, or MCOs, that operate as part of the state’s Provider-Led Arkansas Shared Savings Entity, or PASSE, program. The PASSE program accepts Medicaid clients with complex behavioral health, developmental or intellectual disabilities, providing individualized assistance through a care coordinator.

For the 2021 fiscal year, payments to comprehensive Medicaid MCOs accounted for 52% of total Medicaid spending nationally, according to KFF. In 2022, Arkansas paid MCOs $1.3 billion, KFF data showed.

The PASSEs are adjusting to declines in enrollment.

PASSE Enrollment
Week of Nov. 13

Healthcare Plan


Summit Community Care


Arkansas Total Care




Empower Healthcare Solutions


Source: DHS

As of March 1, 2022, DHS said more than 55,000 Medicaid clients were being served by PASSEs. But new data from mid-November brings that total down to just over 44,700.

Two of the PASSEs, Arkansas Total Care and Summit Community Care, did not respond to Arkansas Business interview requests. But an executive for another, CareSource of Dayton, Ohio, said the company had “lost a few hundred members” from the Medicaid unwinding.

“We were very, I don’t want to say lucky, but we had planned for this for quite a while,” David Donohue, president of the nonprofit’s Arkansas market, told Arkansas Business. “For us, the impact has been very minimal for membership losses because of planning and outreach.”

Donohue said CareSource worked closely with DHS to identify members who were at risk of losing Medicaid so the PASSE’s care coordinators could reach them individually and help them maintain coverage.

“Through our care coordinators, we were able to save 1,300 members from redetermination,” Donohue said, adding that there has been minimal financial impact to the company. CareSource’s Arkansas PASSE has about 3,000 members, he said.

“We all knew this was coming,” he said. “Certainly, you look and try to make projections that there would be some level of loss. Nationally, anyone who works in this industry knows the numbers would fall back to pre-pandemic levels. We had projections on that and have performed better than we projected.”

The impact on CareSource may be less than other PASSEs because the provider is new to Arkansas and is still growing its client base, Donohue said.

Other PASSEs, like Empower Healthcare Solutions of Little Rock, have seen bigger decreases in Arkansas clients.

“Empower has seen a fairly significant decrease in enrollees as a result of the unwinding of the PHE,” or public health emergency, Empower CEO Mitch Morris told Arkansas Business via email. “This is no surprise and Empower has been preparing for this to happen.

“Empower, in cooperation with DHS, has been working diligently to identify those individuals and do whatever necessary to ensure they submit the information and retain their eligibility,” he said.

Morris declined to disclose the number of enrollees Empower lost during the Medicaid reassessment period. As of last week, Empower had 15,108 Medicaid clients, according to DHS.

Elevance Health Inc. (formerly Anthem Inc.) of Indianapolis has a holding company that is listed as a co-owner of the Summit Community Care PASSE.

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