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Arkansas private-option per-person costs up 7.5%

’17 insurance rates drive rise; state trims 21,280 from expanded-Medicaid rolls by Andy Davis | March 4, 2017 at 3:25 a.m.

The average per-person cost of Arkansas' private-option Medicaid program has increased about 7.5 percent from last year, reflecting insurance rate increases that took effect Jan. 1, according to state Department of Human Services figures released Friday.

In January and February, the per-person cost averaged $534.41 per month, compared with full-year monthly averages of $496.91 in 2016, $486.98 in 2015 and $485.50 in 2014.

Department spokesman Amy Webb also said Friday that coverage was terminated Wednesday for 21,280 Arkansans covered by the expanded part of the state's Medicaid program, including the private option, as a result of efforts to remove enrollees who are no longer eligible.

The terminations reduced enrollment in the program, which became known as Arkansas Works on Jan. 1, to 310,951, she said.

A spokesman for Gov. Asa Hutchinson called the reduction in enrollment "good news and a result of new efficiencies and operations" under the leadership of Cindy Gillespie, who took over as director of the Department of Human Services just over a year ago.

"Director Gillespie and their crew have just done an outstanding job of getting things in shape, and that's really resulted in the numbers we see this week," the spokesman, J.R. Davis, said.

State officials initially estimated that 250,000 Arkansans would become eligible for Medicaid in 2014, when the state expanded it to cover adults with incomes of up to 138 percent of the poverty level.

The income cutoff this year is, for example, $16,643 for an individual or $33,948 for a family of four.

A bill sponsored by Rep. Josh Miller, R-Heber Springs, and passed by the House on Wednesday seeks to freeze enrollment on July 1.

Hutchinson opposes the bill. Instead of freezing enrollment, he wants to control costs by restricting eligibility and other changes, which will require approval from President Donald Trump's administration.

Webb said the enrollees whose coverage was terminated included about 9,000 who failed to respond to notices requesting information needed to verify their eligibility.

The coverage for most of the others should have ended at some point in the past but didn't because of problems with the state's computerized enrollment and eligibility verification system.

The department has focused on improving the accuracy of the state's Medicaid rolls since clearing out a backlog of applications and other paperwork tasks with the help of a surge of temporary caseworkers last year, she said.

Before the terminations, enrollment in the expanded part of the state's Medicaid program stood at 332,231 on Tuesday, down slightly from 334,113 on Jan. 31, according to department figures.

The total as of Tuesdaycomprised 308,598 enrolled in the private option and 23,633 who were being covered under the traditional, fee-for-service Medicaid program because they needed health services that private plans don't typically cover.

Under the private option, the Medicaid program pays the premiums for enrollees in insurance plans offered on the state's health insurance exchange.

The program also provides additional subsidies, known as cost-sharing reduction payments, to cover the plans' deductibles as well as most or all of the enrollees' other required out-of-pocket spending for medical care.

The Medicaid program also pays directly for nonemergency medical transportation and other so-called wraparound benefits that are required under Medicaid rules but aren't covered by the insurance companies' plans.

In January and February, the monthly private option premiums averaged $385.26, compared with an average of $358.40 during all of 2016. The monthly cost-sharing reduction payment averaged $145.02 per enrollee, compared with $134.38 in 2016.

Wraparound expenses during the first two months of 2017 averaged $4.14 per enrollee, compared with $4.13 in 2016.

The premiums for private option plans and other types of plans sold on the exchange increased this year an average of 9.7 percent for plans sold by Arkansas Blue Cross and Blue Shield, 4 percent for those sold by St. Louis-based Centene Corp., and about 11 percent for those sold by QualChoice Health Insurance.

Minnetonka, Minn.-based UnitedHealth Group stopped offering plans on the exchange this year. The insurer had offered plans to private option recipients in 13 counties last year.

As specified in 2010 Patient Protection and Affordable Care Act, the federal government paid the full cost of coverage for the expanded part of the state's Medicaid program through the end of last year.

This year, Arkansas will be responsible for at least 5 percent of the cost. The state's share will then rise every year until it reaches 10 percent in 2020.

Arkansas could owe additional money if the cost of the private option over the next five years exceeds a cap that will be calculated based on monthly per-enrollee cost limits listed in the federal waiver renewing the program's authorization.

The monthly per-enrollee cost limit this year is $570.50.

Under Arkansas Works, private option enrollees with incomes above the poverty level in January began paying premiums of $13 a month, which is deducted from what the Medicaid program pays.

The changes under Arkansas Works also include providing coverage through employer-sponsored plans instead of through the private option to workers at participating small businesses, and sending enrollees information about job training programs.

Hutchinson has said he also hopes to gain approval from federal officials for changes that weren't allowed under former President Barrack Obama's administration.

Those include restricting eligibility to people with incomes below the poverty level instead of 138 percent of the poverty level, imposing a work requirement and expanding subsidies for employer-sponsored coverage.

Hutchinson will announce details of his proposals next week, Davis said.

A Section on 03/04/2017

Print Headline: Private-option per-person costs up 7.5%


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