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Arkansas Calculates the Cost of Undoing Medicaid Expansion

Ending Medicaid expansion in Arkansas could have a “substantial cost” for the state, according to a consultant’s report.

Ending Medicaid expansion in Arkansas could have a “substantial cost” for the state, according to a consultant’s report.

 

Representatives of The Stephen Group appeared Wednesday before the state Health Reform Legislative Task Force to discuss a report the panel hired them to produce containing recommendations on reforming health care.

 

The task force is charged with recommending a model that could replace Arkansas’ Medicaid expansion program, known as the private option, which uses federal Medicaid money to subsidize private health insurance for Arkansans earning up to 138 percent of the federal poverty level and is slated to end on Dec. 31, 2016. If Arkansas continues with some form of Medicaid expansion in 2017, it will begin paying a share of the cost that will increase gradually to 10 percent by 2021.

 

As The Stephen Group first said in a preliminary report in August, ending Medicaid expansion and reverting to traditional Medicaid programs could cost the state $438 million between 2017 and 2021, the New Hampshire-based consulting group’s final report states.

 

That estimate assumes the shifting of costs to traditional Medicaid and the restoration of funding to hospitals for uncompensated care. The impact on the state budget might be less if the state did not renew some optional programs or fund uncompensated care, the report notes.

 

The report offers numerous recommendations for modifying Medicaid expansion, including three “fundamental recommendations”: shifting the focus of the program to being transitional, with the goal of moving people into jobs and off of public assistance; shifting toward managed care; and enhancing eligibility verification and fraud detection to ensure services are not being accessed by people who do not deserve them.

 

Caroline Cournoyer is GOVERNING's senior web editor.
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