LITTLE ROCK – The Arkansas Medicaid expansion program known as ARHOME must be renewed every five years, and earlier this year the Department of Human Services submitted a renewal application to federal authorities that includes a revised work requirement for recipients.
Also this year the legislature approved Act 774 to achieve more than $260 million in potential savings for taxpayers in the ARHOME program.
ARHOME is an acronym for Arkansas Health and Opportunity for ME. It provides government-subsidized health coverage for about 225,000 Arkansans at an annual cost of between $2 billion and $2.5 billion a year. The years in which it was most costly were during the height of the COVID pandemic.
The federal government pays for 90 percent of the costs of ARHOME and has authority to accept or deny proposed changes in eligibility and range of services.
Most of the cost savings from Act 774 would be through a more transparent rebate process. One of the significant cost categories in Medicaid is prescription drugs. Some public health systems in other states have filed suit, or conducted investigations, and learned that they did not receive all the rebates to which they were entitled.
Also, the state will achieve an unknown amount of savings due to a new work requirement. Arkansas previously had a work requirement, but it was stricken after a legal challenge. The language in Act 774 is meant to comply with federal court orders in the previous lawsuit.
Getting or looking for a job will not be a requirement for eligibility, as it was before. Instead, people who receive ARHOME services will have individual development plans, which include work or continuing education. People who do not cooperate and refuse to follow their plan will have benefits suspended.
The national Affordable Care Act was enacted in 2010, making people between 19 and 64 years old eligible for Medicaid expansion services if their annual income was below 138 percent of the poverty level.
Each state enacted its own version of Medicaid expansion, and in 2013 Arkansas became the first state to gain federal approval for a Medicaid expansion program that relied on private health insurance. Arkansas Medicaid pays private insurers to cover the eligible population.
It was first known as the private option and it lowered the rate of uninsured significantly. Arkansas hospitals reported that the number of unnecessary visits to emergency rooms went down. Beginning in 2017 the name was changed to Arkansas Works, and the state began imposing the work requirements that were later stricken by a federal court.
Under Act 774, companies that provide coverage under the ARHOME program must maintain a medical loss ratio of 85 percent. Previously it was 80 percent. The ratio refers to the amount that insurance companies must pay to physicians, hospitals, pharmacies and other providers for medical care, and which cannot be spent on administration or salaries.
Federal public health officials estimate that 92.3 percent of the United States population is covered by health insurance of some type. There are about 26.1 million Americans with no insurance.
