Private option OK for 250,799

State’s eligible top forecast

LITTLE ROCK -- The number of people approved for coverage under Arkansas' expanded Medicaid program last month reached 250,799, surpassing the number state officials estimated to be eligible, according to figures released Friday.

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Arkansas Democrat-Gazette

Information and graph about Arkansas' private option.

The numbers released by the state Department of Human Services also show the average per person payment to insurance companies offering private-option plans, which cover most of the newly eligible Medicaid enrollees, rose this month by 8 cents, to $481.61.

State officials had estimated that 250,000 Arkansans became eligible for Medicaid-funded coverage on Jan. 1, 2014, after the Arkansas Legislature extended eligibility as authorized under the federal health care overhaul law to adults with incomes of up to 138 percent of the federal poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.

Those who had been approved as of April 30 include 209,998 who were enrolled in the private option and 24,793 who were assigned to the traditional Medicaid program because they were considered to have exceptional health needs.

An additional 16,008 applicants had been approved for coverage but had not yet completed enrollment.

The higher-than-expected approval total reflects the Human Services Department's delay in verifying the eligibility of those who have been on the program for at least a year, said state Sen. David Sanders, a sponsor of the law creating the private option.

He said 20,000 to 40,000 enrollees are expected to be removed from the private option as a result of the eligibility checks, which began earlier this month.

"I've been very frustrated with [the Human Services Department] in the past year in their inability to get their eligibility determination system up and online," Sanders, R-Little Rock, said.

Human Services Department spokesman Amy Webb has said the first round of eligibility checks has been delayed by an ongoing overhaul to the 25-year-old electronic eligibility verification system.

The Legislature's Joint Budget Committee in March approved a $15.1 million increase in the department's contract with Princeton, N.J.,-based eSystems Inc., the department's main vendor on the project, bringing the total amount of the contract to $31.3 million.

The total cost of the project has been estimated at $130 million, Webb said in an email last month.

Webb said Friday that she didn't know how many enrollees have been checked so far nor when the effort is expected to be complete.

"It's clear that we do not have a handle on verifying eligibility," Sen. Jim Hendren, chairman of a task force researching alternatives to the private option, said.

He added that a higher-than-expected enrollment raises the question of whether the cost of insuring the expanded Medicaid population also will exceed expectations.

As long as Arkansas' per-enrollee cost stays below a limit set in a waiver authorizing the private option, the federal government will pay the full cost of covering the newly eligible enrollees until 2017, when Arkansas will be responsible for 5 percent of the cost.

The state's share will then increase every year until it reaches 10 percent in 2010.

"It's certainly a cause for concern," Hendren, R-Sulphur Springs, said.

Citing a concern about the eventual cost to the state, Gov. Asa Hutchinson earlier this year called on the Legislature to create the task force, which is expected to recommend a program that would replace the private option starting in 2017.

Webb said the original estimate of the number of people eligible for coverage was "based on the data we had at the time."

"We have no data to indicate that it is significantly off," she said, adding that the number eligible will fluctuate along with changes in the state's demographics and economy.

Private-option participants receive coverage through plans on the state's Medicaid exchange, with the Medicaid program paying the premium and providing additional subsidies, known as cost-sharing reduction payments, to reduce or eliminate enrollees' out-of-pocket expenses for medical care.

The payment for coverage this month included an average premium of $350.96, an increase of 6 cents from the average premium for April.

The average cost-sharing reduction subsidy was $130.64, an increase of 1 cent compared with the average subsidy for April.

The premiums vary according to the plan selected by the enrollee and the enrollee's age, with higher premiums charged to insure older participants.

Cost-sharing reduction payments are lower for enrollees with incomes above the poverty level because they are required to make some co-payments -- $8 for a doctor's office visit, for instance -- or contribute up to $15 per month to help pay the cost of their medical care.

The Medicaid program pays directly for nonemergency medical transportation and other benefits that are required to be provided under Medicaid rules but aren't covered by the insurance companies' plans.

The cost of those so-called wraparound benefits averaged $4.34 per enrollee in April, down from $5.04 in March.

The cost limit for the private option over a three-year demonstration period will be calculated using monthly per-enrollee targets.

Last year the state's monthly per enrollee cost averaged $489.70, or $12.07 above the limit of $477.63. This year, however, the state's cost has been below the monthly limit in the waiver of $500.08 per enrollee. The monthly per enrollee cost limit will increase to $523.58 next year.

Sanders and Human Services Department officials have said they expect the costs this year to be low enough to make up for the cost last year.

"We continue to be under the budget cap, which is phenomenal," Sanders said Friday. "We would certainly be having a different conversation now if the costs were at the cap or above the cap."

NW News on 05/23/2015

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