Arkansas Medicaid Expansion Law Faces Funding Hurdles

Published May 19, 2016

After initially falling short of the required votes, the Arkansas Senate approved funding for Arkansas Works, which Governor Asa Hutchinson (R) signed into law in 2013 as a hybrid “private option” Medicaid expansion program.

The funding measure, Senate Bill 121, passed 27–2 on April 20 after proponents added a provision sunsetting the Medicaid expansion on December 31, 2016, with the expectation Hutchinson will line-item veto the sunset clause after the House approves the bill, the Arkansas News reported.

Arkansas law requires a three-fourths supermajority from both houses in order to approve bills dealing with funding. The Senate initially voted 25–10 to fund Arkansas Works, two votes short of the funding threshold.

Lack of funding would have essentially ended the country’s first hybrid Medicaid expansion program, termed the “private option,” established in 2013 under the Affordable Care Act. The program uses federal money to purchase private health insurance plans for approximately 268,000 recipients—a combination of newly eligible able-bodied Medicaid enrollees with incomes below 138 percent of the federal poverty level and previously eligible individuals who enrolled after Arkansas expanded Medicaid.

Arkansas Works, which includes cost-sharing requirements for program participants with incomes above 100 percent of the federal poverty level, will replace the state’s Medicaid expansion program, pending approval from the federal Centers for Medicare and Medicaid Services.

‘Work Suggestions’

Dan Greenberg, president of the Advance Arkansas Institute, says the requirement for federal approval of the state’s Medicaid expansion program limits the possibility of true reform.

“Gov. [Asa] Hutchinson has proposed Arkansas Works to reform the Medicaid expansion program, but conservatives are skeptical, as work requirements usually get shot down from the feds and become more of work suggestions,” Greenberg said. “It’s been very hard to get any approval from the feds in the past.”

Unenforceable Copayments

Greenberg says Arkansas Works will do little to enforce copayments or reduce the national debt.

“Copay problems include no penalties if a beneficiary refuses to pay the fees, as care has already been provided, and there are almost no incentives to collect payment,” Greenberg said. “The program is being sold as a way to save taxpayers a little bit in the short term as the feds absorb costs. The neediest people are put on the private option, but the debt will just be added on at the federal level.”

The federal share of Medicaid expansion in Arkansas will cost $9 billion, stated the Stephen Group, the legislature’s research consultant, in an October 2015 report to the Arkansas Health Reform Task Force.

Marcus Rech ([email protected]) writes from Centerville, Ohio.

Internet Info:

Matthew Glans, “Arkansas Private Option Should Serve as Warning to Other States,” Research & Commentary, The Heartland Institute, November 11, 2015:

Volume 1, Findings Report, Stephen Group, October 1, 2015: 

Image via Thinkstock