HHS Likely To Approve Arkansas Medicaid Waiver

HHS officials on Monday said they likely will approve a waiver to allow Arkansas to receive federal Medicaid funds for an "innovative" employer-based health insurance program that "does not meet the usual Medicaid standards for eligibility and benefits," the New York Times reports. The program, designed to provide health insurance for 80,000 low-income state residents, would require that employers who participate guarantee that all employees would receive coverage, regardless of income or other factors.

The program each year would cover six physician visits, seven days of inpatient hospital care and two outpatient hospital procedures or emergency department visits, as well as two prescriptions monthly.

Arkansas Gov. Mike Huckabee (R) said employers would have to pay $15 monthly for employees with annual incomes less than 200% of the poverty level and $100 monthly for higher-income employees under the program.

Employees who participate in the program would pay annual deductibles of $100 and 15% of the cost of services, with maximum out-of-pocket costs of $1,000 annually, according to Arkansas officials.

State officials expect 50,000 employees with annual incomes less than 200% of the federal poverty level and 30,000 workers with higher incomes to enroll in the program.

State Rep. David Johnson (D) said that Arkansas will help fund the program with proceeds from the 1998 national tobacco settlement.

According to Huckabee, the program would allow small businesses that do not provide employees with health insurance to compete with larger companies that provide coverage. He said, "Forty-six percent of all workers in our state are in companies that have fewer than 100 employees. Only 26 percent of companies with fewer than 50 workers offer any health benefit."

Julie Munsell, a spokesperson for the Arkansas Department of Health and Human Services, said that employers could require employees to pay to the employer fees for the program.

Joseph Thompson, director of the Arkansas Center for Health Improvement, said, "In reality, employers will have to pay most or all of the premiums for their employees. If a single employee says, 'I don't want to participate,' the employer becomes ineligible for the program. The employer could not get the benefit for any of its employees."

Huckabee added, "Everyone in the employment pool has to have coverage. Employers cannot cherry-pick the employees who get coverage."

According to the Times, HHS officials said that the program "could be a model for other states that want to expand coverage without substantially increasing costs" (Pear, New York Times, 3/7).