Arkansas Will be Particularly Hard Hit by Repeal of ACA

As regular readers of Say Ahhh! know, Arkansas has a unique approach to Medicaid expansion, known as “Arkansas Works” or the “private option,” which relies on the federal marketplace to provide coverage to Medicaid expansion enrollees instead of using Medicaid plans and providers to deliver coverage. As a result, the current plan by Congressional leaders to repeal the Affordable Care Act without a clear replacement plan, poses particular challenges for Arkansas. Recent press accounts have also underscored the Trump Administration’s plans to begin dismantling key parts of the ACA through executive action.

This is especially troubling for Arkansas because it has seen its uninsured rate decline very sharply since the Affordable Care Act was implemented in 2014. Among non-elderly adults (ages 19 through 64), Arkansas’ rate of uninsurance declined over 10 percentage points – from 24% in 2013 to 14% in 2015, one of the top ten largest declines in uninsurance rates in the country. Latest enrollment figures show that over 300,000 people are enrolled in the private option in Arkansas. Private option enrollees account for 80% of the Arkansas marketplace.

I recently blogged about another state that begins with the letter “A” that faced some special challenges (Arizona) as Congress moves quickly to repeal the Affordable Care Act. Arkansas’ private option faces the risk of a more imminent collapse of its system of coverage — because even if a repeal bill delays implementation of the key changes (i.e., repeal of the Medicaid expansion, elimination of the premium tax credits for the marketplace) for, say two years, many experts believe that the marketplace will collapse more quickly. So that means that, in most states, the Medicaid expansion could continue along until the money actually goes away, but not in Arkansas.

Have you ever noticed that when ACA opponents trash talk “Obamacare”, you don’t hear much about the Medicaid expansion? That is because the Medicaid expansion component is working very well, and because states like Arkansas have taken advantage of existing Medicaid flexibility to create unique state approaches like the private option.

No matter the state approach, though, the Medicaid expansion has contributed to reductions in the uninsured rate, promoted delivery system reform, and provided affordable, comprehensive coverage. And Medicaid, to state the obvious, existed before the ACA and will remain in its current form until, of course, Congress moves on cuts and other damaging proposals. Congress could start tampering with the successful Medicaid program soon but so far they have set their sights on repealing the ACA first.

So my point here is that while it would be plausible to argue that under a repeal of the ACA, which delays the loss of enhanced federal Medicaid funding for the expansion until 2019, states could continue operating this piece of their program without much change in the interim. But Arkansas won’t be able to wait for the new Administration and Congress to come up with their replacement plan because of its reliance on the marketplace as its coverage vehicle for Medicaid expansion enrollees. If the marketplace starts to fall apart, coverage for 300,000 Arkansans is in imminent jeopardy.

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.