Don’t miss Benji’s article for the Arkansas Nonprofit News Network —featured in the Arkansas Times as this week’s Reporter — on yesterday’s announcement by Governor Hutchinson that the state’s Medicaid rolls have been reduced by 10 percent.
The number of beneficiaries covered by the program fell from 1,048,000 on Jan. 1, 2017, to 931,000 on Jan. 1, 2018. That includes both the Medicaid expansion program known as Arkansas Works that covers low-income adults and the traditional Medicaid program, which covers the disabled, lower-income kids in ARKids, the elderly, and many other vulnerable populations.
Hutchinson credited a strong economy and low unemployment rate, as well as an effort by the state’s Department of Human Services to review eligibility, for the reduction in the rolls. The Medicaid program will now require $47 million less in state general revenue for the next fiscal year, according to Hutchinson (ongoing cost-saving measures in the traditional Medicaid program also contributed to the budget reduction).
The governor called this “bending the cost curve,” but that’s really a misnomer. The news about the reduction in the rolls has nothing to do with the per-person costs of health care coverage, it’s just that less people are covered by the Medicaid program (it’s no secret that the program itself will lower costs if it covers less people). If these folks are finding coverage elsewhere, that’s a good thing, but if more people wind up uninsured, let’s hold off on the parade.
The state’s efforts to review the rolls, for example, included identifications of people who were clearly ineligible — for example because they had turned 65 and needed to transition to Medicare — but it also removed more than 26,000 beneficiaries with out-of-date addresses on file, many of whom might in fact be eligible for the program. Meanwhile, it is clearly good news if people transition out of Medicaid eligibility because their incomes go up — the question then becomes whether they know their options for new health coverage when their Medicaid coverage ends. This is where the state’s insistence on underinvestment in outreach could become a problem.
The governor has every reason to cheer a robust economy and significant help for the state budget (as well as more than $400 million less in federal spending) — and precisely because the Medicaid program is so important, it is vital for the state to ensure it is delivering coverage to eligible beneficiaries as efficiently as possible. But I’ll hold some of the applause until we get updated figures on the uninsured rate in Arkansas, which has been cut by more than half since the enactment of Obamacare.
That big caveat aside, this almost certainly represents a powerful argument for the governor in attempting to secure legislative approval for Medicaid expansion, both in this year’s fiscal session and next year in the regular session. Hutchinson promised to keep costs in check even as the state has to begin chipping in for the gross costs of Medicaid expansion, and I expect these numbers to help grease the wheels for re-authorization.
Meanwhile, still no word from the federal government on a waiver requested by Hutchinson to enact his proposed changes to Arkansas Works, which include work requirements and a reduction in eligibility that would boot more than 60,000 working poor Arkansans off the rolls. Hutchinson and DHS Director Cindy Gillespie both expressed confidence, as they have all along. No one doubts that the Trump administration will approve work requirements, but the reduction in eligibility is considered a tougher ask. Hutchinson said that approval would “be granted in Washington’s time frame, but not necessarily my time frame.” The plan is already at least two months behind schedule; it was slated to begin Jan. 1 and DHS officials say they need 60 days to implement it once approval is received.
Benji has more details on all of this, check it out.