LITTLE ROCK — Gov. Asa Hutchinson on Thursday received a letter from U.S. Health and Human Services Secretary Sylvia Burwell notifying him that the agency has approved his proposed changes to the state’s Medicaid expansion program, with some changes.
“I am pleased to notify you that today, the Centers for Medicare and Medicaid Services is approving a five-year extension of Arkansas Medicaid section 1115 demonstration project entitled ‘Arkansas Works,’” Burwell said in the letter.
Burwell wrote that Arkansas’ program, which launched in 2013 under then-Gov. Mike Beebe and has been commonly known as the private option, “has made great progress towards improving health care coverage for Arkansans. Today’s approval of the Arkansas Works model will allow the state to build on this success, while introducing new innovations in how you deliver coverage.”
Arkansas Works is the new name Hutchinson has proposed for the program, which subsidizes private health insurance for about 300,000 low-income Arkansans. Arkansas is paying 5 percent of the cost of the mostly federally funded program this year; if the programs continues, Arkansas’ share of the cost will reach a maximum 10 percent in 2020.
Hutchinson has said the four main changes he wanted were referral of unemployed recipients to voluntary worker training, a requirement that some recipients pay small co-payments, an end to coverage being retroactive for 90 days and incentives for employers to offer employer-based insurance to employees who agree to leave the Medicaid expansion program.
The governor has said the biggest change between what he asked for and what the federal government approved is in the area of incentives for employers, where the government agreed to a more limited proposal than Hutchinson’s.
President Barack Obama’s administration said it will allow expenditures for the employer share of cost-effective, small group employer-sponsored insurance to cover employees who have been on the private option, to the extent that the remaining employer contribution is no less than 25 percent of the overall cost of the coverage.
The incentives will be limited to a three-year period per employer and can only be provided to employers who either offer coverage effective on or after Jan. 1 and did not offer coverage in calendar year 2016 or offer non-grandfathered small group coverage effective on or after Jan. 1 and previously offered only grandfathered coverage.