Private Option Eligibles Increase Again, But Number Could Drop

The total number of Arkansans eligible for the private option reached 259,335 in June, while the total average cost per private option recipient fell 89 cents, the Arkansas Department of Human Services announced Monday.

The 259,335 figure represents an increase of 4,586 over May, when 254,749 were eligible. The department had previously announced it had paid premiums for 218,376 recipients in June, an increase from 214,461 in May.

Not everyone declared eligible has begun to have their premiums paid. The 259,335 figure also includes 25,815 classified as “medically frail” and placed into traditional Medicaid.

Amy Webb, DHS communications director, said the numbers do not include those recipients being removed from the rolls because they have not responded to a request for income verification as part of an ongoing and incomplete effort to redetermine eligibility. On July 16, Talk Business & Politics reported that Arkansas Medicaid officials have sent notices of termination to 25,000 Medicaid recipients, most of them private option recipients.

The total cost per person in June was $484.94, compared to $485.83 in May. The total cost includes a combination of premiums and cost sharing reduction payments, which is the money paid by the government to offset some of the co-pays that otherwise would be paid by consumers. Those co-pays vary according to a recipient’s income and are reimbursed by the federal government. The total cost also includes wraparound costs, which include extra expenses such as transportation.

Created by the Legislature and Gov. Mike Beebe’s office in 2013, the private option uses federal Medicaid dollars to purchase private insurance for lower-income individuals. Arkansas received a federal waiver from the Obama administration to enact it. Under the terms of the waiver, total monthly costs per recipient must be no more than $500.08, or the state could be required to refund part of the difference.

The private option was passed and then reauthorized in 2014 by a coalition of Republicans and Democrats, many seeing it as a way to expand access to health care without increasing the Medicaid rolls. A Gallup poll released last summer found that Arkansas had the nation’s steepest drop in its uninsured rate – from 22.5% in 2013 to 12.4% in 2014. Some Republicans see it as a way for the state to reform health care entitlements.

But many Republican legislators oppose it as an expansion of government with unsustainable future costs. While federal funds currently pay for almost all the program’s costs, the state will begin paying 5% of the cost in 2017 and 10% by 2020.

Legislators this year voted to authorize the private option through 2016, when it is supposed to end. Meanwhile, they created a legislative task force to consider overall health care reform, including the private option.