New Arkansas governor: I'll continue Medicaid expansion—for now.

Hutchison urges consideration of other options in the coming years

In a much-anticipated announcement on Thursday, Gov. Asa Hutchinson (R) said Arkansas will keep its "private option" Medicaid expansion through the end of 2016—and then reconsider it.

Background on Arkansas' private option

Former Gov. Mike Beebe (D) signed the state's expansion plan into law on April 23, 2013. Under the plan, Arkansas would accept federal money for Medicaid expansion provided through the Affordable Care Act (ACA) but would use it to buy private insurance for about 250,000 eligible low-income residents. The federal government approved the plan in September 2013.

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Since Arkansas implemented its private plan option in 2013, the state’s uninsured rate has declined from 22.5% to 12.4%, according to Gallup data. Meanwhile, the number of uninsured patients admitted to hospitals has been nearly cut in half. Currently, 213,000 Arkansas residents are enrolled in the program.

However, the future of Arkansas Medicaid expansion came into question after the 2014 midterm elections, when many Democratic governors were ousted by their Republican competitors and state legislatures became more Republican.

Details of Hutchison's announcement

Although Hutchison expressed support for keeping the current plan through the end of 2016, he also discussed plans to create a legislative task force to research other options for providing low-income individuals coverage after 2016.

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He said, "With regard to the private option, it is time to close this chapter and start a new one," adding, "We are turning the page and starting a new effort, our innovative efforts in Medicaid reform will continue." By 2021, Arkansas would have to pay $200 million annually to keep the current program alive. Given those costs, he says the state should create a "health reform task force" to look for a "compassionate and reasonable cost-effective response for care of those currently on the private option."

According to Politico, Hutchison's decision could "dampen" momentum in other states to pursue a private option for Medicaid expansion, like Tennessee, Utah, and Wyoming (Wayne, Bloomberg, 1/22; Demko, Modern Healthcare, 1/22 [subscription required]; Wheaton, Politico, 1/22).

The takeaway: Arkansas will move forward with its private option for Medicaid expansion for now, but it will consider other options for low-income residents after 2016. Observers say Hutchison's decision could "dampen" momentum in other states considering a private option.

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