Expanded-Medicaid rolls shrink in June

State cites error canceling coverage for 4,798; payments to insurers still falling

Correction: The Arkansas Medicaid program made payments to insurance companies in June on behalf of 137,925 Arkansans who were receiving coverage through plans on the state’s health insurance exchange under the-so called private option. A graphic accompanying this story listed an incorrect enrollee total for June.

The number of Arkansans approved for coverage under the state's expanded Medicaid program fell slightly in June, largely as a result of the state canceling coverage for almost 4,800 people after officials learned the enrollees' eligibility had not been verified, a spokesman for the state Department of Human Services said Thursday.

photo

A listing of Private Option costs.

Meanwhile, the per-person payments to insurance companies providing coverage under the so-called private option continued to fall.

The Medicaid program's payments to the companies for coverage this month averaged $486.55 per enrollee, compared with $487.16 last month.

The terms of a federal waiver authorizing the private option limit the monthly per-enrollee cost for 2014 to $477.63.

Human Services Department spokesman Amy Webb said the average age of enrollees in the private option has fallen in recent months, resulting in lower average premiums.

But she said state officials still plan to ask that the cap be increased because the average age remains above what was projected.

Approved by the Legislature last year, the expansion of Arkansas' Medicaid program extended eligibility to adults with incomes of up to 138 percent of the poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.

As of June 30, 184,244 Arkansans had been approved for coverage, a decrease of 2,879 from the total on May 31, Webb said.

Despite that drop, the number of Arkansans who had completed enrollment continued to increase. As of June 30, that number stood at 176,691, an increase of 4,374 from the total on May 31.

The private option allows most newly eligible adults to sign up for a plan on the state's health insurance exchange, with the premium paid by Medicaid. Those with exceptional health needs are assigned to the traditional Medicaid program.

Enrollment in the private option increased by more than 5,000 people in June, reaching 157,183, while the number considered medically frail fell by almost 700 people, to 19,508.

Thousands of others had been approved for coverage but had not yet completed enrollment.

Those who don't qualify for Medicaid, but have incomes of less than 400 percent of the poverty level, may qualify for federal tax-credit subsidies to help pay the premiums for plans on the exchange.

As of Sunday, 38,126 people were enrolled in non-Medicaid plans on the exchange, a drop of 2,117 people from the total on June 1, the state Insurance Department reported Thursday.

Meanwhile, the number of people in those plans who had made at least one premium payment increased by 322, reaching 37,270.

Webb said the drop in those considered eligible for coverage under the expanded Medicaid program was largely the result of the discovery in May that 4,798 people had been allowed to enroll even though their eligibility had not been verified.

The federal Centers for Medicare and Medicaid Services sent Arkansas information on the applicants in a data file with a code indicating that their eligibility had not yet been verified, but Human Services Department employees didn't know about the code and thought the applications had been approved, Arkansas officials have said.

Those enrollees were notified that their coverage would end on May 31.

Since then, Webb said, about 200 of the enrollees have re-enrolled in the expanded Medicaid program after their eligibility was verified.

An additional 600 enrollees reported that their income had increased, making them ineligible for Medicaid, and they signed up for non-Medicaid plans on the health insurance exchange.

Webb said the department plans to contact 700 other enrollees who appeared to be eligible for the traditional Medicaid program, as well as 1,000 to 2,000 enrollees whose eligibility for Medicaid or other coverage had been verified, but who indicated on their federal applications that they wanted Arkansas officials to "do a full determination to see if there's any state coverage they could be eligible for."

The department also plans to contact other enrollees who need to submit additional information before their eligibility can be verified, Webb said.

For most people who do not qualify for Medicaid, enrollment on the state's insurance exchange ended for the year on March 31.

Those whose Medicaid coverage was canceled however, have been granted a special enrollment period giving them until Aug. 11 to sign up for plans on the exchange, Insurance Department spokesman Heather Haywood said.

The enrollees can pay past premiums to have their coverage start retroactive to June 1. To apply for the special enrollment period, the enrollees must call the federal call center at (800) 318-2596.

In addition to the payments to insurance companies, the cost of the private option includes payments for "wraparound" benefits that are required by Medicaid rules but not provided by the private insurance plans.

Those benefits include nonemergency medical transportation and vision and dental benefits for 19- and 20-year-olds.

So far this year, spending for those benefits has been below the $8.58 that Medicaid officials projected. According to information provided by the department Thursday, the monthly cost of those wraparound benefits has averaged $4.49 per enrollee through June.

How much the insurance companies spend on medical care for private-option enrollees also will affect the program's cost.

For instance, in addition to the premium payments, the department makes upfront payments to the companies to reduce enrollees' required out-of-pocket spending for medical care.

If the enrollees' medical costs are higher than expected at the end of each year, the Medicaid program will owe the insurance companies additional money. If the costs are lower than expected, the insurance companies will owe money to the Medicaid program.

Also, under the federal health care law, insurance companies that spend less than 80 percent of the collected premiums on medical care must refund the difference to the policyholder.

In the case of the private option, the money refunded would go to the state's Medicaid program.

Under the terms of the wavier from the Centers for Medicare and Medicaid Services, the federal government will pay the full cost of the private option during a three-year demonstration period as long as the cost of the program, including the wraparound benefits, stays below set limits.

The monthly per-person cap rises to $500.08 in 2015 and $523.58 in 2016.

If the state's spending for the private option exceeds the caps, the state would owe the difference to the federal government at the end of the demonstration period.

However, the terms of the waiver allow the state to ask that the caps be adjusted if the state has information that the limits "may underestimate the actual costs of medical assistance for the new adult group."

Sen. David Sanders, R-Little Rock and a sponsor of the law creating the private option, said he doesn't expect an adjustment in the cap for 2014 to be necessary.

"Generally, I'm pleased with the way it has gone, and I think we'll be pleased with the overall number in year one," he said.

A Section on 07/11/2014

Upcoming Events