Arkansas Finds Collecting Medicaid Premiums + Copays from People in Poverty Not Cost Effective

Buried in the nearly enacted move in Arkansas right now to reauthorize the state’s unique “private option” Medicaid expansion while looking at broader Medicaid reforms was a welcome change to the current Medicaid program. You can read about it in detail thanks to Arkansas Times reporter David Ramsey here. The bottom line is it became clear to administrators of the Arkansas Private Option Medicaid program that they were spending far more than they were collecting when attempting to administer premiums and cost sharing for people below 100% of the federal poverty line. You can read the language in the Arkansas legislation here at Section 4(b) where the purpose of this change is to “limit the state’s exposure to additional costs.” This is a welcome change, especially as other states are proposing premiums and cost sharing for people in poverty. Cost sharing for people in poverty is seen as deterring enrollment and the administrative costs often outweigh any minimal amounts collected from people at these very low income levels.

Adam Searing is an Associate Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

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