LITTLE ROCK — The debate over expanding the state Medicaid program centers on providing free basic health care for up to 250,000 Arkansans between 19 to 64, most of whom work but can’t get or can’t afford health insurance through their employers.
For the most part, “it’s people who simply don’t have access to insurance, because a lot of employers in Arkansas can’t afford to offer it, or have access but they simply don’t make enough money to be able to afford it,” said John Selig, director of the state Department of Human Services.
The expansion, a provision of the federal Affordable Care Act that the U.S. Supreme Court has said must be optional for states rather than mandatory, would make Medicaid available to people who earn up to 138 percent of the federal poverty level. The federal poverty level is $23,050 for a family of four.
“There are a lot of people working full-time jobs at minimum wage who would fit into that category,” Selig said.
Officials with DHS and the Arkansas Center for Health Improvement did not have an estimate of the percentage of people who would become eligible for Medicaid who have full-time jobs.
Gov. Mike Beebe has said he is inclined to support the expansion but has acknowledged that appropriating the money would require legislative approval. Republican legislators have expressed reservations about the expansion.
“You cannot ignore the key philosophical premises of this whole debate,” said Rep. John Burris, R-Harrison. “Do we subsidize and expand, or do we solve root problems?”
The expansion would be a huge change for Arkansas, which currently offers Medicaid to a very limited group.
“Our Medicaid program is the most restrictive for coverage of any other state in the nation except Alabama,” said state Surgeon General Joe Thompson. “To be on Medicaid in our state as an adult, if you’re not pregnant, you have to make as an individual less than $3,000 a year, have less than $2,000 in assets and have a chronic condition that lasts at least 12 months.
“The expansion of Medicaid goes up to 138 percent of the poverty level with no asset limits and no disability requirements, so it is a huge number of individuals that are potentially going to have a mechanism to have their care paid for and for us to be able to manage their chronic conditions in a better way,” Thompson said.
Selig said that up to now Arkansas has not offered Medicaid to people solely on the basis of economic need, because “we couldn’t afford it.”
“Right now if you are an adult in Arkansas for the most part you can’t get on Medicaid unless you are disabled and impoverished,” he said, noting that for Medicaid eligibility purposes “impoverished” means earning up to 17 percent of the federal poverty level, or about $1,900 annually for an individual.
A number of states offer Medicaid to people earning up to 100 percent of the federal poverty level.
Arkansas’ ranking near the bottom among states in Medicaid availability is related to its ranking near the bottom in income. With a median family income of $38,413, Arkansas is the third poorest state in the nation.
Arkansas also has one of the highest uninsured rates in the nation, with 25 percent of working-age Arkansans uninsured.
The average annual cost of a health insurance policy in Arkansas in 2010 was $11,816, with $7,849 paid by the insured person’s employer and $3,967 paid by the insured person, according to the Arkansas Center for Health Improvement.
Under the ACA, the federal government would pay all of the cost of the Medicaid expansion for the first three years, after which Arkansas’ share would gradually increase to 10 percent. State officials say that makes extending Medicaid to the working poor more feasible than it has ever been.
“It would be very difficult to turn down that kind of money to accomplish that much good,” state Medicaid Director Andy Allison told a legislative panel last week.
And what happens to the 250,000 when the Affordable Care Act’s universal mandate to buy health insurance takes effect in 2014, if Arkansas decides not to expand Medicaid?
The act provides subsidies to help people buy private insurance if they earn between 100 and 400 percent of the federal poverty level, and it calls for the creation of exchanges in every state through which people can shop for insurance plans.
But Selig said people below 100 percent of the poverty line are not eligible to receive the subsidies or use the exchanges, because it was written with the assumption that all states would expand their Medicaid programs.
“For people under 100 percent there is nothing available. The only option is Medicaid expansion,” Selig said.
The federal law includes a penalty for failing to buy health insurance. Selig said he did not believe that would apply to people who fall through the cracks.
“There is a clause that says it has to be affordable,” he said. “So if it’s too big a burden on you, you don’t have to, and almost by definition for those people buying insurance would be too big a burden.”
But Selig added, “I would hope we could find a way to serve the poorest people also.”
During a hearing on the issue last week, several Republican legislators said they were concerned about the relying on the federal government to expand Medicaid.
“Eventually, China is going to stop loaning us money and we’re not going to have the money from the federal government to fund some of our programs,” said Rep. David Meeks, R-Conway.
CORRECTION: An earlier version of this report incorrectly quoted Thompson as saying that an individual must earn less than $30,000 a year to qualify for Medicaid in Arkansas. The amount he named was $3,000.