The American Health Care Act Would Effectively End ACA Medicaid Expansion

The American Health Care Act, the health care bill passed by the House of Representatives in May and currently under consideration by the Senate, would shift more than $350 million in yearly costs to Arkansas by 2023, according to a report by the non-partisan Center on Budget and Policy Priorities (CBPP). This would put the health insurance of the 300,000 Arkansans who currently receive coverage through Arkansas Works, the state’s Medicaid expansion program, at risk. Additionally, it would place a serious strain on our state budget.

The House health bill would reduce federal Medicaid payments to the states for expansion enrollees starting in 2020, shifting almost $200 million in yearly costs to Arkansas that year and growing to more than $350 million by 2023. The state would have to make up the difference if the federal government does not keep its commitment to provide the same level of funding that’s currently in the law.  This would more than double the cost of Arkansas Works to our state.

Arkansas would almost certainly be unable to absorb these additional costs; even if every tax cut that has been passed under Governor Hutchinson’s administration were reversed, we would be less than halfway toward filling the gap in revenue necessary to maintain Arkansas Works.

As the Senate considers changes to the House bill, some have claimed that phasing in this shift in costs to the states over a longer period of time could help avoid these harms. But state legislation that created the program known as Arkansas Works includes a provision that requires the program to end within 120 days from the date that federal Medicaid payments fall below the levels agreed to in the Affordable Care Act. The ultimate impact would therefore be the same for Arkansans, regardless of whether these cuts come in 2020 or 2023.

Arkansas Works has garnered bipartisan support because it has saved the state hundreds of millions of dollars while simultaneously cutting the uninsurance rate among adults. We urge our senators to reject any health bill that ends the Arkansas Works program, and instead work to strengthen and improve the Medicaid program that many children and their families rely on to get the care they need, but cannot afford otherwise.

Read the full report from CBPP here.