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Arkansas’s Private Option lives on, with new amendments. Now what?
Arkansas’s Private Option lives on, with new amendments. Now what?
Posted by Anna Strong on March 6th 2014

Tuesday, Arkansas's House of Representatives passed the Department of Human Services Division of Medical Services appropriation for the 2015 fiscal year, by a margin of 76-24. The reason this is big news is because, embedded with the funding for Medicaid and ARKids First, the state's "Private Option" funding made this the fiscal session's most controversial bill. The Senate passed the appropriation bill in mid-February, but the House seemed to be at an impasse, lacking two of the needed 75 votes that would move it to the Governor's desk. Three representatives had a change of heart Tuesday and changed their votes, allowing more than 100,000 Arkansans who had already enrolled in coverage to stay enrolled for another year.**  

Continuation of the Private Option is fantastic news, and the 103 legislators who supported it need to be thanked. However, in the process of passing it, several new amendments were added to reach the 75 percent threshold for Private Option funding this year.  

Representative Nate Bell proposed special language that was adopted by the Joint Budget Committee to, in his words, "create a barrier to enrollment" by limiting outreach and promotion of the Health Insurance Marketplace. Specifically, the DHS Division of Medical Services, the Department of Health, and the Insurance Department are no longer allowed to "allocate, budget, expend, or utilize" government funding to advertise, promote, or encourage enrollment in health care coverage. The agencies can no longer fund activities of outreach workers with government funding, either.   

Another amendment from Representative John Burris was added to the DHS Division of Medical Services bill. This amendment called for DHS to seek federal approval for a "limited state-designed nonemergency transportation benefit" for the Private Option population. Additionally, this amendment put time frames around some "phase two" elements of the original Health Care Independence Act. It required that optional health savings accounts and cost-sharing for individuals earning 50-100 percent of the poverty level be put in place. These changes to Arkansas's waiver or Medicaid state plan must be available for public comment by August 1, 2014 and filed with the U.S. Department of Health and Human Services by September 15. The changes must be effective by February 1, 2015.  

Obviously, there are concerns with these amendments from the consumer advocacy angle. We've seen how effective outreach has been over the past several months in Arkansas, and we know what a success it was for ARKids First. Outreach pays off across the state! When the Private Option is combined with our Marketplace population, Arkansas has about 130,000 enrollees in just a few months: more than most Southern states. And in a rural state like Arkansas, we know that transportation is an important part of access to care that could negatively impact those who don't have reliable transportation. Lastly, research has shown that copays and other cost-sharing mechanisms are barriers to care for those earning less than the poverty level.  

A few other tweaks were made to appropriation bills tied to the Private Option, including special language indicating that insurance premium taxes collected on Marketplace plans sold to Private Option enrollees were directed into the Health Care Independence Program Trust Fund for future use toward state obligations for the Private Option. This will help in 2017 and beyond when Arkansas begins paying 5 percent of the Private Option's costs.  

AACF will carefully monitor the amendments as the details emerge and suggest consumer-friendly, research-based principles for implementation. Despite our concerns, we remain overjoyed that the Private Option will continue for another year, providing so many Arkansas families with the economic security and access to health care they need to thrive.  


**A quick history lesson on the Private Option: last year, Governor Beebe signed the Private Option into law on April 23. The Private Option was Arkansas's unique answer to the Affordable Care Act's option to extend coverage to lower-income adults beyond the state's current Medicaid eligibility. Arkansas sought and received approval for a Section 1115 demonstration waiver from the Centers for Medicare and Medicaid Services to use federal Medicaid funding to purchase private health insurance plans for low-income adults in the state's new health insurance Marketplace. About 250,000 adults earning less than 138 percent of the federal poverty level (about $16,105 for an individual or $32,913 for a family of four) would be eligible for the Private Option. As of late February, 2014, 105,561 adults had enrolled in a Private Option plan or had been deemed "medically frail" and enrolled in traditional Medicaid.

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Arkansas Advocates for Children & Families
Union Station - 1400 West Markham Suite 306 - Little Rock, AR 72201
Phone: (501) 371-9678 - Fax: (501) 371-9681 - Email: info@aradvocates.org