Officials tout ‘Medicaid contraction’


LITTLE ROCK — An alternative version of Medicaid expansion that the Obama administration has offered to Arkansas would actually allow the state to move some recipients off of the government program, officials said Thursday.

Legislators and state officials said it appears possible that under the new option announced this week Arkansas could reduce its Medicaid costs because some people now on Medicaid would become eligible for federal subsidies to purchase private health insurance plans through the state’s insurance exchange, at no cost to the state.

Officials are referring to the alternative as Medicaid “contraction.”

“Draw the line, close the door, turn the page: We are moved past Medicaid expansion,” said Rep. John Burris, R-Harrison. “We will not add a single person to the rolls of Medicaid in this session. If anything, we are going in the other direction.”

Amy Webb, spokeswoman for the state Department of Human Services, said Burris was correct.

“It does have the potential to decrease the number of people that we actually serve in the Medicaid program,” she said.

Gov. Mike Beebe announced Tuesday that the Obama administration is open to an alternative to Medicaid expansion, suggested by Republican legislators, in which the federal government would pay the premiums for Arkansans earning up to 138 percent of the federal poverty level to buy private insurance through Arkansas’ health insurance exchange.

The federal government would pay the premiums entirely for three years, after which the state’s share of the cost would increase gradually to 1o percent. The state could opt out at any time.

The federal Affordable Care Act originally proposed that states add people earning up to 138 percent of the federal poverty level to the Medicaid rolls, a proposition that was generally opposed by the Republican majority in the Arkansas Legislature.

Webb said that under the new deal offered to Arkansas, many who now receive Medicaid benefits would no longer need them.

“A good example is, we serve the pregnant women population, and if this particular population, the expansion population, is on private insurance, then there would be no need for them to (rely on) Medicaid,” she said.

Arkansas’ Medicaid program paid for nearly 25,000 births in fiscal year 2011, according to DHS.

Webb also said the “medically needy,” or people who become eligible for Medicaid because of medical expenses, would no longer need Medicaid. She did not immediately know how many Arkansans fall into this category each year, but she said the monthly average is 2,787.

DHS officials also believe that people now participating in the ARKids B children’s health insurance program and the ARHealth Networks for small businesses could be moved to private insurance plans, Webb said, although she said people enrolled in ARKids B probably could not be moved immediately.

“It’s an eligibility issue. We’re required for a certain time to continue to offer what we currently offer for that population,” she said.

Webb did immediately not know how many people are served each year by ARKids B or the ARHealth Networks.

Sen. Jonathan Dismang, R-Searcy, said the prospect of lessening the burden on the state Medicaid program is “absolutely” more appealing to GOP lawmakers than the original proposal.

“Our goal is to develop a conservative, long-term health care plan for the state of Arkansas. That was the reasoning behind the request that we’d made, and now that we have a set of parameters, we can start trying to create that plan,” he said.