June/July 2016 Issue
Now that Arkansas Works, the state’s Medicaid expansion plan,
has been passed and funded,
we asked five health care industry leaders
in the state how their specific
segment of the industry will be impacted.
The passage of Arkansas Works gets us back to where we are right now,” said Dan Rahn, chancellor of the University of Arkansas for Medical Sciences.
Though UAMS supported the law’s passage, he said the fact that funding the provision is tackled annually keeps the state from moving forward on addressing many important health care issues, especially those affecting special populations — people with developmental disabilities, behavioral health and drug addiction.
“We keep coming back to this same struggle,” Rahn said. “My hope is policy decisions and funding will follow a couple of years of stability. Despite the struggle, I’m proud of the state of Arkansas. We’ve found a path forward for the benefit of everyone in society. There’s a lot to be proud of, but it’s not a pretty process.”
Arkansas Works effectively maintains health insurance for more than 260,000 Arkansans. Last year, caring for the newly insured population cost UAMS $65 million. Rahn said patient-care revenue cross subsidizes academic and research projects, and if the program had not been funded, UAMS would have taken a big hit.
If thousands of people had become uninsured, few would have the ability to pay for the same level of care themselves, he said. While this is a statewide issue, it particularly affects rural areas, which have some of the highest rates of uninsured.
The benefits of health care expansion to rural communities are numerous, Rahn said. The benefits include improved overall health status and work productivity, and maintaining health care infrastructure in rural areas.
“It makes Arkansas more attractive,” he said. “It’s incredibly important to the future of our state.”
CareLink, which serves Pulaski, Faulkner, Lonoke, Monroe, Prairie and Saline counties, is one of Arkansas’ eight Area Agencies on Aging, organizations mandated by the Older Americans Act of 1965 to provide services for older people, such as meals, information and assistance, wellness programs and advocacy.
Of the 260,000 Arkansans that will receive continued coverage through Arkansas Works, 93,000 are age 45-64, according to AARP Arkansas. Mattingly said people in this age group, who are not yet eligible for Medicare often find themselves without health insurance. Medicare eligibility starts at age 65.
“Previous to [Medicaid expansion], there was nothing to cover these people,” he said, explaining that the lack of coverage may be because of lost jobs or other circumstances.
“Now, we have resources to help them out.”
Arkansas Works’ passage also allows CareLink, which serves about 15,000 people over 50 each year, to continue providing services, including home and community-based services, often paid for by Medicaid, that allow people to stay in their homes and avoid institutional care.
“Nursing home care is a mandated service under Medicaid,” Mattingly said. “Home and community-based services do not have protections, even though that saves more money and are where people want to be.”
In an election year like 2016, Mattingly said politicians often visit senior centers, because older people vote at a higher rate than other age groups. He said each AAA has encouraged their populations to tout the importance of Medicaid expansion to lawmakers.
“This impacts all the seniors out there in some fashion,” he said.
QualChoice is one of two insurers participating on the federal health care exchange in Arkansas, he explained. The other is Arkansas Blue Cross Blue Shield.
“We participate on the federal exchange as a Qualified Health Plan and accept enrollment of individuals in the current private option program,” Stock said. “This involves administration of the health benefit policies and the payment of medical claims for the enrolled individuals.”
This includes the receipt of more than $200 million in funds associated with the membership, as well as payment of much of these funds to medical providers in Arkansas for health care services, he said.
The passage of Arkansas Works means that QualChoice and its nearly 100 employees who work in this area of the company will continue with little change.
Stock said the company did not take an official position on Arkansas Works, but paid close attention to the financing authorization for the program. If it had not passed, he said it would have resulted in “adjustment in current workforce levels.”
“Individuals receiving health benefits as part of this program are a major component of the individual insurance market in Arkansas today,” Stock said. “Individual premiums under the Affordable Care Act must follow community rating standards as required in the law. The overall costs of the program significantly affect the cost of all individual health insurance policies in the state because of these requirements.”
Overall, QualChoice insures a total of about 150,000 Arkansans.
Conway Regional Health System
“This will, in turn, also reduce the number of patients who arrive at our hospital without coverage, thereby reducing the overall uncompensated care for all Arkansans.”
Since the private option was enacted, Conway Regional Medical Center has received about $19 million for services provided to health care exchange patients — either through Medicaid expansion or the insurance exchange, Troup said. This amounted to about 14,000 visits, via the emergency room, inpatient, outpatient, surgery or other areas of the hospital.
Troup said CRHS, which entered into a five-year management agreement with CHI St. Vincent in August 2015, supported the passage of Arkansas Works.
“These are people who may not have otherwise had an ability to pay for their needed care,” he said. “These patients and their covered family members have one less burden to worry about, which for most of us is the most important — our health.”
He said many members of the general public do not realize how much the cost of care impacts Arkansans, specifically small businesses. Without insurance programs, like Arkansas Works, people may not seek treatment until it becomes an emergency, which, he explained, can impact an entire population.
Also, he said, any cuts to Medicaid and its expansion would be funded through other sources, most likely through an increased cost burden borne by employers.
“The overall minimization of premium cost increases can be tied directly to increased access through these programs,” he said. “[Arkansas Works] is foundational to supporting the overall payment system.”
Executive Vice President/CEO
Arkansas Pharmacists Association
The Medicaid private option plan has enabled more than 260,000 Arkansans to access the medications that they need in conjunction with other health care.
“A quarter of a million people have had access to the medication experts in the health care system,” Pace said, explaining that without such coverage, these individuals would have had to pay for the medications themselves or do without them, making the individuals “less healthy than when they entered the health care system.”
The program also impacts the cost of doing business for pharmacies, both large and small. When pharmacists purchase larger quantities of drugs, they often get them at a lower cost. With the expanded insured population, many pharmacists have taken this approach in their business model, Pace said.
The program also helps ensure that health care infrastructure is maintained in rural areas, which keeps the door open to future economic development, he explained.
What’s most important about continuing Medicaid expansion through Arkansas Works, Pace said is that it impacts other industries that, in many ways, are linked together. Budget cuts to higher education impact the education of future pharmacists, and highway funding is also affected.
During the Arkansas Works debate, Gov. Asa Hutchinson said not passing it would have left a more than $100 million hole in the state’s budget. So, taking advantage of the federal funds associated with expansion was essential.
“We’re taking an opportunity that the federal government gave us and putting an Arkansas spin on it,” Pace said. “That’s what we do in Arkansas. We make our own solutions.”