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The Arkansas Health Care Independence Program. An Alternative to Medicaid Expansion Richard Armstrong Director Department of Health and Welfare December 9, 2013. Arkansas Health Care Independence Program The “Private Option”.
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The Arkansas Health Care Independence Program An Alternative to Medicaid ExpansionRichard ArmstrongDirectorDepartment of Health and WelfareDecember 9, 2013
Arkansas Health Care Independence ProgramThe “Private Option” • Uses a free market approach instead of expanding the traditional Medicaid program. • Purchases qualified health plans from the insurance exchange for low-income adults who are not eligible for Medicaid. • Uses federal dollars to pay for premiums. • Approved by CMS as a demonstration project, meaning it is a pilot project that cannot cost more than traditional Medicaid coverage.
Arkansas Demographic Profile • Arkansas has a population of 2.9 million people; $40,150 median household income, 26% of adults under 65 are uninsured. • Arkansas projects 225,000 adults <138% of poverty will be eligible for the Private Option. • Idaho comparison: 1.6 million people, median household income of $46,900, adult uninsured=25% • Idaho projects 104,000 uninsured adults <138% of poverty.
Arkansas Private Option Eligibility • For people with incomes below 138% of poverty; $15,860 for single adult and $32,500 for family of 4. • Applicants are directed to apply through the Access Arkansas state portal, the state’s social service benefit eligibility system. • Arkansas does not have a state-based exchange. If a person applies through the federally facilitated marketplace, they are sent a letter informing them to apply through the state eligibility portal. • Eligible participants shop in the portal to select and enroll in a high quality, affordable health plan that meets their specific needs at a competitive price.
Private Option Plans • State pays insurer directly for premium costs. • Premium payments are 100% federally funded • until 2017, at which time state begins paying a • 5% share. • State share of premium costs increases in • subsequent years, capping at 10% in 2020. • Plans are silver metal level; there must be an option of two plans for participants to choose from.
Arkansas Private Option Plan • Medicaid required benefits that are not offered in eligible QHP plans are supplemented through existing Medicaid program framework. • Includes non-emergency transportation and EPSDT for adults under 21. • Idaho’s state-based exchange could require supplemental benefits—further study would be necessary.
Arkansas’ Private Option Experience • Data from Oct. 1 – Nov. 27: • 80,413 applications filed. • 68,692 determined eligible; many of the remaining are still in the eligibility determination process. • 58,591 have completed enrollment.
Advantages of Arkansas Model • Doubles the size of the Arkansas marketplace enrollees, better leveraging economies of scale: • Encourages private carrier entry, • Expands service areas and access, • Results in more competitive pricing. • Increases access to medical providers who normally did not accept, or limited the number of Medicaid participants they served. • Arkansas estimates traditional Medicaid expansion would have increased its Medicaid fee-for-service network by 40%, creating access problems.
Advantages of Arkansas Model • Reduces cost shifting due to uncompensated, indigent care. Increases payments to providers for existing uninsured patients they currently treat. • Reduces churn between Medicaid coverage and health plans on the exchange. • Requires health plans to participate in its payment improvement initiative, expanding the number of providers participating in the state’s payment and delivery system reform. • In the first two months, very high acceptance by public.
Arkansas Demonstration Hypothesis • Improve patient access to medical providers. • Reduce churn from Medicaid to marketplace policies. • Improve quality of care by requiring insurers to participate in payment improvement initiative. • Reduce costs for everyone in the marketplace exchange by doubling enrollees. • Improve the quality of health plans offered in the marketplace. • Reduce expenses for uncompensated care and cost shifting.
