By Marquita Little, Arkansas Advocates for Children and Families

Arkansas’s unique approach to Medicaid expansion, known as the Private Option, has been a success during its short lifespan. However, some state policy makers want to see the program end. Within just a couple weeks of being sworn in as the new Governor, Asa Hutchinson spoke about his plan for the future of the Private Option and legislation was filed to advance his ideas.
Governor Hutchinson asked the legislature to continue to fund the private option for two more years while setting up a legislative task force to make recommendations on broader changes to the state’s health care system starting in 2017.

Unlike other states, Arkansas’ constitution requires a ¾ vote every year on the appropriation to keep the Private Option going. Governor Hutchinson said the purpose of the task force was to develop “an alternative health coverage model” that includes a “compassionate and reasonable cost-effective response for care of those currently on the Private Option.” In his speech to announce the plan, Governor Hutchinson credited the Private Option for helping the state achieve a 10 percent drop in the uninsured rate and a 47 percent reduction in the number of hospital visits by uninsured patients. He stressed the important role the Private Option played in reducing the uncompensated care costs for hospitals and improving the economic viability of hospitals serving rural communities. In just the first six months, hospitals reduced the cost of treating uninsured patients by over $69 million.

The Governor’s proposal got off to a good start when the legislative session began and quickly cleared several hurdles in the legislature. Senator Jim Hendren, previously an opponent of the Private Option, got the Governor’s proposal off the ground by introducing SB 96 to set up the task force. The bill also reduces red-tape and cuts administrative costs by eliminating the imposition of cost-sharing and health savings account requirements on enrollees below the poverty line. Estimates show that the anticipated administrative costs will be cut in half by removing the health savings account requirement for folks from 50-99% of the poverty line. The Department of Human Services reported that the costs will be cut from $12 million to $6 million for managing the accounts and collecting monthly contributions.

In addition, the bill ends the plan to move very low-income parents and children from traditional Medicaid into the Private Option. We are glad this plan was taken off the table because ArKids First, Arkansas’s Medicaid and CHIP program, has worked so well for kids reducing the rate of uninsured to just under 6 percent. We don’t want to mess with success by not protecting the gains we’ve made so far.

Last week, the Senate approved Senate Bill 96 and a budget bill for the Department of Human Services’ Division of Medical Services, which enables Private Option funding to continue through FY 2016 (SB 101). Yesterday, the Governor’s proposal faced the final hurdle on the House floor. After much debate, the House approved both bills by wide margins

We applaud the legislature for backing Governor Hutchinson’s plan to continue funding for the Private Option. The Private Option provides affordable, quality health coverage to over 220,000 Arkansans, and it has also provided financial certainty for our hospitals and the state’s budget. This plan is not only a win for Arkansas families, it is a victory for all those who care about a financially stable health care system that serves communities throughout our state. A legislative task force will now determine what shape the Private Option and the broader Medicaid program will take in the future. We will continue to work to make sure our lawmakers know how important quality, affordable coverage is for Arkansas families.