Private Option Population Shrinks By 26,500

The number of enrollees in Arkansas’ private option shrunk by about 26,500 at midnight July 31 because those former beneficiaries did not respond to requests by the Department of Human Services for information about changes to their incomes.

According to Amy Webb, DHS spokesperson, the estimate is based on information provided to insurance carriers July 21. The information was provided to the carriers so they could try to contact their private option beneficiaries to encourage them to respond to the requests, and so they could be certain not to pay claims after July 31.

Webb said an undetermined number of Arkansans will lose their health insurance at the end of August.

Arkansas Medicaid officials are redetermining eligibility for 600,000 private option and traditional Medicaid beneficiaries. Recipients must certify their income eligibility if data indicates their income has changed by at least 10%. They are sent a notice saying they must contact the Department of Human Services within 10 days.

In July, DHS Director John Selig told legislators that recipients are given another five days. After no response, recipients receive a notice that their coverage will be terminated by the end of the month, but they must be given at least 10 days for that to occur. If terminated, recipients by law have 90 days to be reinstated, with medical charges covered retroactively.

DHS paid premiums for 218,376 recipients in June, its highest amount ever. The total number of Arkansans eligible for the private option reached 259,335 in June.

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.

It was passed that year and then reauthorized a year later 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 adults 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 of the program, 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.