Highlight on Arkansas: Will Arkansas See Medicaid Contraction?

Following Republican success in the midterm elections, changes in Arkansas’ executive and legislative leadership are putting the future of Arkansas’ Medicaid expansion up in the air. Through bipartisan efforts, Arkansas is home to a unique form of Medicaid expansion under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), known as “the private option.” However, according to a New York Times report, supporters of the expansion are concerned that, with new lawmakers, legislative support may now be insufficient to keep the system in place.

Arkansas Expansion

The Arkansas private option functions somewhat differently from other Medicaid expansions by allowing covered Medicaid beneficiaries to use federal money to buy private health insurance plans on the state’s marketplace. The program is unique because, instead of offering low-income residents a health insurance plan administered by the state, Arkansas residents are choosing from the same insurance plans that higher-income residents are choosing from. The rationale behind the system, according to the New York Times, was to provide lower income residents with higher access to care and to stabilize the insurance market for higher-income residents because the Medicaid population is generally younger and healthier.

Budget

The outgoing Governor, Mike Beebe, a democrat, explained to the New York Times that future success for the Medicaid expansion is difficult because the Arkansas state constitution requires that all budget bills pass the legislature with a three-quarters majority in both of the legislative houses. In other words, because Arkansas voters replaced lawmakers in both legislative houses with legislators who campaigned against expansion, the reauthorization of Arkansas’s private option could mean elimination for the state’s novel program. For example, Linda Collins-Smith, one of the new Republican state senators, who campaigned against the program, told the New York Times, “we can’t afford it…Obamacare by any name, it is absolutely horrible policy.”

Results

Despite the incoming criticism for the program, the results of an Arkansas Hospital Association study, released by the Arkansas Center for Health Improvement (ACHI) revealed that, at least in some ways, the program is achieving the desired effects. The study revealed that during the first six months of 2014, the number of people hospitalized without insurance in Arkansas fell 46.5 percent, when compared to the same period of time in 2013. At the same time, the amount of uncompensated care losses resulting from uninsured hospital care, dropped 56.4 percent or $69.2 million. According to the ACHI release, those numbers are particularly telling because over that same period of time hospital admissions only increased one percent. Similarly, the ACHI released a factsheet detailing the successes of the private option and explaining, in particular, how the program has benefited hospitals.

Uncertain Future

The fate of Medicaid expansion in Arkansas is undecided. Although the program has brought benefits to hospitals and, according to a Gallup poll, dropped the uninsured rate 10 percent in a single year, there are new opponents who view the program as too costly. The private option, like ACA itself, is a policy that continues to be fraught with large doses of success and controversy. Now, it is up to Arkansas law makers to weight the costs and benefits of the private option and to decide whether the state’s unique Medicaid model will continue to break new ground.