Private option recipients now 283,396; Medicaid drops by 140,000

The number of recipients enrolled in the private option has reached 283,396, while the number of traditional Medicaid recipients has dropped by more than 140,000 since the private option was created, members of the Health Reform Legislative Task Force were told Wednesday (June 8).

The private option is the program that uses federal Medicaid dollars to purchase private health insurance for Arkansans with incomes up to 138% of the federal poverty level. It exists as a result of a waiver obtained by the state after the U.S. Supreme Court ruled states were not required to expand their Medicaid populations under the Affordable Care Act, otherwise known as Obamacare.

State Medicaid Director Dawn Stehle told legislators that the 283,396 includes 238,050 recipients whose insurance premiums are being paid by the program, and 45,346 who are considered “medically frail.”

Medically frail recipients are considered to be private option recipients even though they receive traditional Medicaid benefits. That’s an advantage to Arkansas, Rep. Charlie Collins, R-Fayetteville, pointed out because Arkansas is not responsible for any of the costs of private option recipients but pays about 30% of the costs for traditional Medicaid recipients. Arkansas begins paying a 5% match on private option recipients in 2017, a number that rises to 10% in 2020.

A total of 292,526 Arkansans have been deemed eligible to receive private option benefits, but payments for 9,130 are not yet being made. The 283,396 private option beneficiaries represent 31% of all Medicaid recipients. Another 634,847 Arkansans receive traditional Medicaid.

At Collins’ prompting, Stehle told legislators that in 2012, about 776,000 Arkansans were served by traditional Medicaid, including those who are aged, disabled or children. Collins said the number of Arkansans on traditional Medicaid has dropped by more than 140,000 since the private option was created. Stehle said many recipients have been shifted to the private option.

Earlier this year, legislators approved a new version of the program backed by Gov. Asa Hutchinson known as Arkansas Works. That program places more requirements on recipients, including requiring higher-income recipients to pay $19 a month for their insurance premiums.

Stehle told legislators the state is on track to receive that waiver. The Department of Human Services is in the middle of a stakeholder comment period that ends June 17. It will then submit the waiver request to the federal Centers for Medicare & Medicaid Services by July 1, with approval expected by October.

DHS Director Cindy Gillespie told legislators her department will soon announce a partnership with the Arkansas Department of Higher Education to identify beneficiaries of certain government benefits who are enrolled in the ADHE’s Career Pathways initiative. Those beneficiaries would be eligible for “extra help” jobs with DHS, or those that are less than full-time, while they attend college.