LITTLE ROCK — Some Republican legislators aim to reframe the Medicaid-expansion debate by encouraging poor Arkansans to buy health coverage on the state’s insurance exchange, perhaps with the state picking up their modest premiums.
The idea, floated by Sen. Jonathan Dismang, RSearcy, would provide state aid for about 51,000 people if the state decides to expand Medicaid to just 100 percent of the established poverty level, or individuals making $11,170.
The success of such a strategy may hinge on whether the federal government allows “partial” expansion of Medicaid.
In December, the federal government said partial expansion wasn’t an option on the table. However, last week Gov. Mike Beebe said he would approach U.S. Health and Human Services Secretary Kathleen Sebelius about the idea in late February.
A full expansion to 138 percent of the poverty level would increase the Medicaid rolls by 250,000, covering individuals earning up to $15,415.
Arkansans making between $11,170 and $15,415 would be eligible to purchase coverage on the insurance exchange when it begins in January 2014, if Medicaid isn’t expanded. After federal subsidies, their monthly premiums would range between about $19 and $26.
Dismang said the state can save money by offering coverage to that group on the exchange, rather than through expanded Medicaid. He said he hasn’t vetted the idea with fellow Republicans, nor does he have an idea whether the federal government would allow such a plan, which would increase federal costs.
“The bottom line is that I don’t want to lose cost-shifting whatever we can to the federal government,” Dismang said. “If we can keep subsidies in place, I think we should do that.”
In recent weeks, Republicans have pushed for a “partial” expansion of Medicaid, perhaps only up to 100 percent of the poverty level.
If expansion moves forward, federal subsidies for those making between 100 percent and 138 percent of the poverty level would disappear on the insurance exchange, said Cynthia Crone, state exchange planning director. As Medicaid-eligible, they wouldn’t qualify for federal subsidies.
At the Senate Public Health, Welfare and Labor Committee meeting Wednesday, Dismang questioned state Surgeon General Joe Thompson about whether Arkansans making between 100 percent and 138 percent of the poverty level should be allowed to use exchange subsidies for coverage.
“Just yes or no,” Dismang said. “Yes or no.”
“It’s not that simple,” responded Thompson.
Without any Medicaid expansion, Thompson said, a poorer, larger group of about 160,000 Arkansans making between 17 percent and 100 percent of the poverty level ($4,244 to $11,170 a year) would miss out on coverage under Medicaid or the exchange, leaving them without health coverage.
“That’s upside-down policy, offering financial support for people making more money than poorer people,” Thompson said.
The same issue surfaced Tuesday at the House Public Health, Welfare and Labor Committee. Rep. John Burris, R-Harrison, questioned why state officials haven’t given lawmakers data on how much of an economic boom will come to Arkansas through the purchase of exchange policies.
The new health-care law requires most uninsured people not covered by Medicaid to buy insurance or face fines.
Sen. Missy Irvin, R-Mountain View, said at the Senate panel that whether expansion occurs or not, more people will buy insurance from private companies, which typically pay more than Medicaid does.
“Are we even looking at what kind of economic boost that will be? I really don’t ever hear that part of it. I just hear, ‘There’s going to be an economic boost if we expand Medicaid.’ But the reality is there is going to be an economic boost because people are going to be purchasing more insurance, and that will be a higher reimbursement,” she said.
State officials haven’t provided precise estimates about the economic boost that would happen if partial expansion or none at all occurs. In November, the Department of Human Services estimated that the state would save about $630 million through 2021 under a full Medicaid expansion of up to 138 percent of the poverty level, which is $15,415 for an individual or $31,809 for a family of four.
Dismang’s idea, first reported by the Arkansas Times, would involve picking up an average yearly premium cost ranging roughly between $228 and $312 for the 51,000 or so Arkansans for a price tag of about $16 million a year. He said that would be cheaper than the state’s share of covering that same group if they were enrolled in Medicaid.
Department of Human Services data released in November have estimated that new Medicaid enrollees would cost an average of $325 each a month. But the agency hasn’t broken down costs for the group between 100 percent and 138 percent of the poverty level, said Amy Webb, Department of Human Services spokesman.
State hospitals and providers would see more money in their pockets because private insurance will pay higher reimbursements than Medicaid, Dismang said, bringing in millions more dollars.
Still unknown is how many people would pay the fine - $95 in 2014 - rather than buy insurance. Also unknown is how the state would deal with certain groups of current Medicaid recipients - for example, pregnant women and children from low-income families - whose incomes exceed 100 percent of the poverty level.
Under the current expansion plan promoted by Beebe and most Democrats, those groups would be shifted to the more generous 90 percent federal match under expansion.
Under the law, the federal government will pay the full tab for Medicaid expansion until 2017. The state’s share gradually would rise to 10 percent by 2020.
Beebe still supports full expansion, said his spokesman Matt DeCample.
“But he’s also said he’ll take any input and suggestions that the House and Senate leadership have,” DeCample said.
A 2012 U.S. Supreme Court decision gives states the option of expanding Medicaid. So far, 17 states and the District of Columbia have agreed, and 11 states have said they won’t participate, according to The Associated Press. The rest are still in flux.
Regionally, Louisiana, Mississippi, Oklahoma and Texas have said they won’t participate. Tennessee and Missouri are still on the fence.
Dismang and other Republicans have emphasized in recent days that they think Arkansans prefer private coverage to Medicaid.
“As a whole, Arkansans want to take care of their families with private coverage at a rate they can afford,” he said.
Front Section, Pages 1 on 01/24/2013