story by Steve Brawner, courtesy of Talk Business & Politics
brawnersteve@mac.com
The number of enrollees in the Medicaid private option reached 218,376 at the end of June, an increase of about 4,000 from May, when it totaled 214,461. The number of Arkansans deemed eligible reached 254,749 in May, an increase from 250,799 in April.
Total costs for the program were just under $105 million in June, or $480.67 per enrollee – a reduction of 94 cents from May, when the total average cost was $481.61.
The total cost represents a combination of premiums and cost sharing reduction payments, which is the money paid by the state to offset some of the co-pays that otherwise would be paid by consumers. Those co-pays vary according to a recipient’s income. In June, premiums represented $76.5 million, or $350.28 per person, while cost sharing reductions were $28.5 million, or $130.39 per person. Federal funds are used in both categories.
The number does not include so-called “wraparound” costs for transportation and other expenses. New numbers are not yet available for June but averaged $4.23 per person. That cost has decreased each month this year. If the wraparound cost were to stay constant for June, it would equal $484.90.
Created by the Legislature and Gov. Mike Beebe’s office in 2013, the private option uses federal Medicaid dollars to purchase private insurance for lower-income individuals. Arkansas received a federal waiver from the Obama administration to enact it. Under the terms of the waiver, total monthly costs, including the wraparound, must be no more than $500.08, or the state could be required to refund part of the difference.
The private option was passed and then reauthorized in 2014 by a coalition of Republicans and Democrats, many seeing it as a way to expand access to health care without increasing the Medicaid rolls. A Gallup poll released last summer found that Arkansas had the nation’s steepest drop in its uninsured rate – from 22.5% in 2013 to 12.4% in 2014. Some Republicans see it as a way for the state to reform health care entitlements.
But many Republican legislators oppose it as an expansion of government with unsustainable future costs. While federal funds currently pay for almost all the program’s costs, the state will begin paying 5% of the cost in 2017 and 10% by 2020.
Legislators this year voted to authorize the private option through 2016, when it is supposed to end. Meanwhile, they created a legislative task force to consider overall health care reform, including the private option.