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Newly Insured ‘Private Option’ Arkansans Present Challenges, Opportunities

6 min read

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.

Exactly how many fall into each of those categories is not known. Max Greenwood, spokeswoman for Arkansas Blue Cross & Blue Shield, the dominant health insurance carrier in the state, said “a little more than 148,000” people have signed up for the plans her company is selling on the exchange, and about 120,000 of those are private option enrollees. (The only difference is who pays the premium — the individual or the state Medicaid program.)

Greenwood said 80 percent of the private option enrollees have not had insurance with ABCBS at any point in the past five years, but any individual may have had insurance through another company during that time.

Staggered Enrollment

Private option coverage, like all coverage in the exchanges, became effective Jan. 1 of this year. But the entire number of new customers did not enroll in one fell swoop. At the end of March, Greenwood said, ABCBS had enrolled 63,000; by the end of June, 107,000.

While that’s still thousands each month, the fact that some eligible Arkansans have delayed enrolling has made the influx easier to manage, Wroten said.

“We really didn’t see the funnel effect that we expected,” he said.

At White County Medical Center in Searcy, CEO Ray Montgomery reports a 2 percent increase in emergency room visits through July, a manageable number that he thinks may be attributed in part to newly insureds who didn’t already have relationships with primary care physicians.

“So naturally, when they are sick, the first place to go is to the ER,” he said.

In the first half of the year, WCMC saw a 13 percent increase in Medicaid admissions and only a 2 percent increase in admissions of patients who have private health insurance. He believes that mix reflects a short lag time — two to four weeks — between an applicant’s approval for the private option and his or her actual enrollment in a private insurance plan. During that time, the individual is covered by Medicaid rather than his ultimate private insurer.

“I’m sitting here as a newly insured patient, and there is a little bit of a pent-up demand,” Montgomery said. “And as soon as I get [coverage], I go to the emergency room or to the doctor.”

It makes little difference to the hospital. “We at least get paid, even though it is on the Medicaid side initially,” Montgomery said.

Doctors, too, have noted the lag time between coverage and issuance of a private insurance card to private option patients, Wroten said, and it caused some initial confusion. But he chalked it up to the “technical difficulties” of rolling out a massive new program.

Education Needed

Even though these low-income patients now have insurance to cover ER visits, hospitals don’t want them there if they would be better served in a doctor’s office, Montgomery said. But neither do the hospitals want to assess patients in the ER and then tell them to go away and make a doctor’s appointment, he said.

“Patients who have been screened and then turned away are going to be mad,” he said. “Not mad at Medicaid, but at the hospital.”

WCMC is developing a handout listing all the primary care physicians in the region and will encourage such patients to develop doctor-patient relationships. But patients who are used to defaulting to the ER will also need training on making and keeping appointments — or, in Searcy and some other communities, they may find that walk-in clinics are rising up to serve them.

“We’re seeing our community open up more urgent care to respond to the more episodic conditions,” Montgomery said. Searcy Medical Center, with about three dozen doctors on staff, has opened a walk-in clinic and Sherwood Urgent Care Inc. has opened a clinic in Searcy.

WCMC has partnerships with some physician groups, Montgomery said, “and we’re having great discussions about establishing patient-centered medical homes. We want to push and pull these patients to the appropriate level of care that is needed, in the highest quality, most efficient manner that is possible.”

The insurance companies covering the newly insured are also engaged in educating them. “These folks are brand new to the process,” Max Greenwood at Arkansas Blue Cross & Blue Shield said.

“They need help learning about how to use health care benefits. They are unfamiliar with wellness. They are unfamiliar with physician appointments, with compliance, with medication. They really need to be taught how to use the system, and the good news is they really want to be taught.”

ABCBS can even quantify this desire for education and understanding, she said: Customer service calls with the newly insured last an average of two and a half minutes longer than calls with the traditional insurance customer.

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