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Arkansas Medicaid compromise in peril as state leadership changes

Reports show the "private option" policy pioneered in the state has benefited low-income patients and hospitals.

Arkansas has seen the sharpest reduction of any state in its uninsured rate — from 22 percent at the end of 2013 to 12.4 percent in June of this year.Arkansas has seen the sharpest reduction of any state in its uninsured rate — from 22 percent at the end of 2013 to 12.4 percent in June of this year.

An Arkansas Medicaid expansion policy may be threatened as new leadership heads to the state capital, despite early reports that show the program is benefiting low-income patients and hospitals alike.
 
“I think the private option is going to cost Arkansas taxpayers too much money and it is not going to be a viable long-term program," incoming state Sen. Scott Flippo, one of the new crop of conservative state lawmakers elected in the November midterms, told The Baxter Bulletin.
 
Flippo defeated former state Sen. John Burris, one of the key architects of a state policy that expanded Medicaid eligibility by setting up a market-based system leveraging individual insurance carriers, in a Republican primary. Under the state’s Medicaid Private Option, low-income residents earning up to 138 percent of the federal poverty level have been able enroll in subsidized private health plans selected through the state insurance exchange.

Arkansas has seen the sharpest reduction of any state in its uninsured rate — from 22 percent at the end of 2013 to 12.4 percent in June of this year.

Arkansas is one of the poorest states in country, where many hospitals have long suffered financial losses from uncompensated care.
 
"I don't think our state can sustain it, and I don't think our citizens, the hardworking citizens, can sustain it,” incoming Republican state Rep. Nelda Speaks told the newspaper.
 
But almost a year after those patients enrolled and started using their plans, early data suggests hospitals are faring pretty well. In a joint survey by the Arkansas Hospital Association and Arkansas Chapter of the Healthcare Financial Management Association, hospitals reported significant reductions in uninsured patients across all service settings.
 
For the first half of 2014, overall inpatient hospital admissions have increased less than 1 percent, while the number of uninsured hospitalized patients with no source of payment fell by 46 percent.
 
The survey, representing 80 percent of hospitals in the state, also found that uninsured emergency department visits have declined 35 percent and uninsured outpatient clinic visits fell by 36 percent.
 
“The survey completes a picture showing that the (Arkansas Private Option) is successfully doing what it was intended to do,” said the Arkansas Hospital Association. Arkansas, the group noted, has seen the sharpest reduction of any state in its uninsured rate — from 22 percent at the end of 2013 to 12.4 percent in June of this year.
 
The increase in insured patients did contribute to a 5.8 percent increase in non-urgent hospital outpatient visits, the survey found, but that suggests “more patients are beginning to avoid emergency rooms as a point of entry into the healthcare system and instead are seeking care in more appropriate settings,” the analysts said. Total visits to emergency rooms only increased by about 2 percent in the first half of the year.
 
Overall, the combination of more insured patients and fewer uninsured patients brought uncompensated care at Arkansas hospitals down by 56 percent.
 
Even though he policy was designed and supported by Republican legislators in a compromise with outgoing Democratic Governor Mike Beebe, incoming Republican Governor Asa Hutchinson has said he wants to review the policy before making a decision, and will start the process in January. Continuing the program will require a three-fourths vote by both the state house and senate.
 
The Arkansas Hospital Association is hoping to convince lawmakers that the program is working.
 
The Private Option is making healthcare more accessible in the state, analysts from the association said in a recent newsletter. “Knowing that the APO is reducing uncompensated care significantly and saving many rural Arkansas hospitals from the threats posed by growing uncompensated care burdens validates that legislators’ support of the APO is equivalent to support not only of their communities and patients in those areas, but also of their local hospitals.”