Arkansas requests health savings accounts, transportation restrictions for 'private option'



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LITTLE ROCK, Arkansas — Arkansas asked the federal government Monday to allow changes to the state's compromise Medicaid expansion that would require some participants to contribute monthly to health savings accounts and would impose new limits on transportation for non-emergency services.

The state Department of Human Services submitted its proposal to change the "private option" program, which uses federal Medicaid funds to purchase private insurance for low-income residents. It was created last year as an alternative to the Medicaid expansion envisioned under the federal health law.

More than 194,000 people are enrolled in the private option. Lawmakers earlier this year required the state to win approval for the changes by Feb. 1 in order to keep the program alive.

The biggest change proposed is the creation of "independence accounts," a form of health savings accounts, for some participants to help cover copayments, coinsurance and deductibles. The state would contribute money it's receiving through the private option into the accounts as well.

Supporters of the move say it will help promote financial responsibility among private option participants.

"The independence accounts are a starting point, not a destination for us, with regards to the policy," said Sen. David Sanders, R-Little Rock, an architect of the private option program.

But some advocacy groups have raised concerns about the accounts, saying they could pose a new burden for low-income residents.

"Quite frankly, it could be a major barrier to coverage," said Rich Huddleston, director of Arkansas Advocates for Children and Families.

State Medicaid Director Dawn Stehle said the state plans to contract with an outside firm to help administer the savings accounts. Stehle said the program will help educate private option participants, many of whom have never had coverage before, about the health care system.

The required monthly contributions will depend on income level, with those above 100 percent of the poverty level putting in between $10 and $25 a month. Those with incomes between 50 percent and 100 percent of the poverty level would contribute $5 a month.

Participants would accrue $15 in rollover funds for each month they contribute to their accounts on time, capped at $200, which they can use to offset future premium payments or contributions to employer-sponsored insurance if their income rises and they're no longer eligible for the private option.

The accounts expand the cost-sharing that the private option requires of some participants. Currently, only participants above 100 percent of the poverty level face some copayments and coinsurance. Those payments will now be tied to the savings accounts, including for participants who make at least 50 percent.

The plan also calls for limiting participants to eight trips per year for non-emergency transportation, with exceptions allowed on a case-by-case basis. The private option doesn't currently have such a limit.


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