Gov. Hutchinson reviewing Trump executive order to limit Obamacare, still awaiting Medicaid waiver for Arkansas Works

Gov. Asa Hutchinson is reviewing President Donald Trump’s decision to end federal cost-sharing reduction payments to insurance companies. He’s also waiting on a decision with a long-sought after Medicaid waiver for the state’s Arkansas Works program, Hutchinson spokesman J.R. Davis told Talk Business & Politics on Friday (Oct. 13).

President Trump on Thursday signed an executive order he said would increase healthcare choice and competition by halting cost-sharing subsidies in the individual marketplace under the Affordable Care Act (ACA). He also signed executive proposals to allow the purchase of insurance across state lines and the expansion of associated health plans to small business owners.

Trump administration officials are also considering whether to approve Hutchinson’s waiver request filed by the state Department of Human Services in early March to continue Arkansas Works reforms passed by the state legislature earlier this year. Those waivers, which must be approved by the U.S. Centers for Medicaid and Medicare, would cap income eligibility at 100% of the federal poverty line. Hutchinson said that change would reduce the number of beneficiaries by 20%, or about 60,000 individuals.

If the waiver is approved by CMS, individuals with higher incomes would move to the federal marketplace, where they could keep the same plan or choose a different one. They would be eligible for federal subsidies but not federal and state funding, as is the case now.

Under the terms of a 2016 waiver provided by the Obama administration, recipients in the 100%-138% range pay a $13 fee to the state and owe a debt to the state if they fail to do so. Under the new waiver, they would pay up to 2% of their income for insurance, which they could lose if they don’t pay.

A second waiver request by the Hutchinson administration would add a requirement for able-bodied recipients to work, be engaged in work training, or volunteer with a charitable organization. The requirements would be like those under the Supplemental Nutrition Assistance Program, or SNAP.

Other waivers sought by the Republican governor would replace the current employer-sponsored insurance program with a new, more targeted program that focuses only on working individuals and those earning at least 75% of the federal poverty level. The final CMS waiver request would help Arkansas move from a “determination state” to an “assessment state,” which would return control of the eligibility process to the state.

“(We’re) still working with CMS on the waiver,” Davis said, adding that state DHS officials are expecting to hear from the Trump administration “any day.”

Ray Hanley, president and CEO of the Arkansas Foundation for Medical Care (AFMC), said he hopes the Trump administration approves the Medicaid waivers for Arkansas Works. He said AFMC will help with the coordination and education of the “conservative reforms” that some will oppose.

“But it’s (waivers) the sort of compromises that lets the state keep the great gains made in reducing rates of uninsured,” said Hanley, a longtime state DHS official and former Arkansas Medicaid director.

Meanwhile, as Gov. Hutchinson reviews the president’s stock market-rattling executive order and awaits a decision on the CMS waivers, several Democratic governors said the Trump administration’s actions were solely aimed at undermining ACA, informally known as Obamacare. The Democratic Governors Association called the Trump administration’s decision to end critical cost-sharing reduction payments “cruel and indefensible.”

“This is a clear attempt to sabotage the health care system – and millions of Americans will pay the price. This decision will cause premiums to increase by 20% for millions of Americans and will cause 1 million people to lose health care coverage in the near-term …,” the NGA said in a statement that included Govs. Jay Inslee of Washington state, Dan Malloy of Connecticut and Andrew Cuomo of New York.

Hanley also has concerns about President Trump’s executive orders. He said insurance companies offering health plans through the Arkansas Works marketplace filed rates over the summer with the federal subsidies factored in.

“(That) helped Arkansas see single digit rates filed among (the) lowest in the nation,” said Hanley. “The subsidies help protect the out-of-pocket impact that would be a real barrier to care to lower income folks in the $30,000 range not on Medicaid.”

Hanley also said the Trump edict allowing the sale of health insurance across state lines won’t improve the marketplace because that is already allowed. Today, six states have already enacted laws to sell health plans across state lines, but no insurer has yet chosen to do so.

One of Trump’s executive orders also allows small business owners to purchase health care for their workforce through Association Health Plans. That led the American Academy of Actuaries to issue a statement saying those changes could present “significant risks and have unintended consequences for consumers and health insurance markets.”

“Creating exemptions from the ACA insurance market rules can have far-reaching and unintended effects,” said Academy Senior Health Fellow Cori Uccello. “These effects could include tilting the market in favor of entities with weaker benefits or solvency standards and weakening the protections for consumers with pre-existing health conditions.”

Hanley echoed the same concerns. He said the association plans will not only “water down” pre-existing condition bans, but also draw healthy people from insurance pools and drive up rates for lower income and sicker people.

Like Hutchinson, many GOP governors in states that expanded health care coverage through ACA were still reviewing the president’s executive order that opponents say will cripple Obamacare. As of today, the Republican Governors Association or individual GOP governors had not issued a statement about the executive order.

However, West Virginia Attorney General Patrick Morrisey (R) did issue a news release applauding the president’s decision to immediately halt Obamacare subsidy payments to insurers, calling it another victory in that state’s fight against federal overreach.

“His decision is consistent with the rule of law. President Trump accurately recognizes that he cannot spend money without Congressional approval. The Affordable Care Act unmistakably allocates money for premium tax credits, but not reimbursements to insurers,” Morrisey said.

To date, the three insurers that offer exchange plans in Arkansas all filed plans to offer health care in the state’s individual health insurance market in 2018. They include Arkansas Blue Cross Blue Shield, QualChoice, and Centene/Ambetter.