Everyone has a lot on their plates right now, so it’s understandable if you’re confused about what’s going on with the health system — particularly what’s going on with Medicaid. Maybe you remember seeing something in the news about ARHOME ending, work reporting requirements, Centene leaving the marketplace, rural hospitals closing, the CES waiver waitlist… (I could go on, but I’ll stop.)
More than 200,000 Arkansans rely on ARHOME for health coverage. But with major federal changes taking effect and the future of Arkansas’s expansion program unsettled, many people are understandably asking: What exactly is happening?
Here is what you should know about how Medicaid expansion works, why it matters, and what changes might be coming next.
First, what is Medicaid expansion?
The 2010 Affordable Care Act gave states the option to expand Medicaid to adults with incomes up to 138% of the federal poverty level. Arkansas adopted Medicaid expansion in 2014. Before expansion, many low-income adults could not qualify for Medicaid in Arkansas unless they were pregnant, had a disability, or met another narrow eligibility category. This left thousands of working adults without an affordable source of health insurance. In fact, Arkansas once had the harshest Medicaid requirements in the country — you had to make under 17% of the federal poverty level to qualify.
Medicaid expansion is also a strong financial deal for Arkansas. The federal government pays 90% of the cost of covering the expansion population, while the state is responsible for the remaining 10%.
Arkansas does expansion differently
Most states enroll expansion beneficiaries directly in traditional Medicaid. Arkansas took a different approach. The state created a program originally called the “Private Option,” now known as Arkansas Health and Opportunity for Me, or ARHOME. Through ARHOME, Arkansas uses Medicaid funding to purchase private insurance plans on the Marketplace for most people in the expansion population.
This means many people covered through ARHOME may think they have private insurance without realizing their coverage is funded through Medicaid. Today, ARHOME provides health coverage to more than 200,000 Arkansans. It is an important source of coverage for workers in industries that are less likely to offer affordable health benefits, including food service, retail, construction, caregiving, and other essential jobs.
Medicaid expansion has made a difference
Medicaid expansion has produced major gains for Arkansas families.
After Arkansas expanded Medicaid, the state’s uninsured rate dropped dramatically. Between 2013 and 2016, the share of Arkansans without health insurance was cut roughly in half. Arkansas experienced one of the largest coverage gains in the country.
Research has also linked Medicaid expansion to fewer problems paying medical bills and less medical debt. When people have coverage, they are more likely to receive preventive care, fill prescriptions, manage chronic conditions, and seek treatment before a health problem becomes an emergency.
Expansion also helps children, even though children are covered through a different part of Medicaid called ARKids First. When parents learn they are eligible for coverage, they often discover that their children are eligible, too. Researchers call this the “welcome mat effect.” Covering parents can therefore help connect an entire family to healthcare.
The benefits extend beyond individual families. Medicaid expansion brings federal funding into Arkansas communities and supports hospitals, clinics, pharmacies, and other healthcare providers. This is particularly important in rural areas, where many providers are already operating under significant financial pressure.
So why is the future of ARHOME uncertain?
ARHOME operates through what is called a Section 1115 demonstration waiver. These waivers allow states to test approaches that differ from the standard Medicaid program, but they require federal approval and must be renewed every five years.
Arkansas’s current ARHOME waiver expires on December 31, 2026. The state requested a five-year renewal, but federal officials verbally informed the Arkansas Department of Human Services (DHS) that the request would not be approved as submitted.
The decision has been attributed to new federal budget-neutrality requirements included in H.R. 1, the major federal budget law enacted in 2025. Budget neutrality generally requires a state’s demonstration program to avoid costing the federal government more than coverage would have cost without the waiver. The new federal standards change how that calculation is made and have created problems for Arkansas’s current model.
In response, Arkansas DHS requested permission to continue ARHOME for two additional years, through the end of 2028. State officials have said this additional time is needed to work with policymakers, design a replacement structure, update state systems, and transition more than 200,000 people without suddenly disrupting their healthcare coverage.
As of now, that extension request remains unanswered. Arkansas leaders will need to make important decisions about what the state’s Medicaid expansion program will look like after the current waiver ends.
Other major changes are coming in January
The uncertainty surrounding ARHOME is happening at the same time Arkansas must implement major new federal Medicaid requirements created by H.R. 1. Beginning January 1, 2027, many adults in the Medicaid expansion population will be required to document at least 80 hours per month of work, education, job training, or volunteer activities unless they qualify for an exemption.
Many Medicaid beneficiaries already work. The challenge will often be proving that they meet the requirement or that they qualify for an exemption. People with irregular work schedules, seasonal jobs, caregiving responsibilities, health conditions, limited internet access, or difficulty obtaining documentation may be especially vulnerable to losing coverage because of paperwork.
Arkansas has experience with this problem. When the state previously implemented Medicaid work reporting requirements in 2018, more than 18,000 Arkansans lost coverage within just a few months. Research found that the policy did not increase employment, while people who lost coverage were more likely to delay care and experience problems with medical debt.
Another federal change will require most adults covered through Medicaid expansion to have their eligibility reviewed every six months instead of once a year. Federal guidance says this change will begin with renewals scheduled on or after January 1, 2027.
More frequent renewals mean more paperwork for families and for the state. They also create more opportunities for eligible people to lose coverage because of a missed notice, an outdated address, a processing delay, or documents that were not received.
What is at stake?
The immediate question is not whether Medicaid expansion matters to Arkansas. It clearly does.
More than 200,000 adults rely on it for health coverage. Healthcare providers rely on the funding it brings into the state. Children benefit when their parents can get covered. Arkansas’s broader healthcare system, particularly in rural communities, has come to depend on the coverage and financial stability that expansion provides. Providers rely on their patients to have insurance covered to make payroll and keep their doors open.
DHS officials have indicated that ending Medicaid expansion is not under consideration. However, many important questions remain about how Arkansas will structure and finance the program, whether the federal government will grant the requested extension, and how the state will implement new work reporting and renewal requirements without causing eligible Arkansans to lose coverage. These decisions will affect families, providers, and communities across the state.
For now, Arkansas Advocates for Children and Families will continue monitoring these developments and explaining what they mean for Arkansans. Stay connected with us for updates and for opportunities to speak up in support of protecting Medicaid coverage for Arkansas families.