HJAR Mar/Apr 2024

44 MAR / APR 2024 I  HEALTHCARE JOURNAL OF ARKANSAS POLICY COLUMN POLICY IT has now been 10 years since coverage began under Arkansas’ innovative Medic- aid expansion program, known in its early years as the “Private Option” and now as Arkansas Health and Opportunity for Me, orARHOME. Over the past decade, the pro- gram has at one time or another provided healthcare coverage to more than 718,000 Arkansans — nearly a fourth of the state’s population. 1 Arkansas has occasionally been in the news lately because lawmakers in other Southern states that have not expanded Medicaid have looked to us as a possible model to emulate. In Georgia, lawmakers even brought in a delegation fromArkansas, including state Sen. Missy Irvin and former Arkansas Department of Human Services Director Cindy Gillespie, to discuss howAr- kansas expanded Medicaid and what the program has accomplished. Arkansas was the first Southern state to expand Medicaid under the Affordable Care Act. As of this writing, there are only 10 states, most of them in the South, that have not yet adopted full Medicaid expan- sion, and that number is likely to continue shrinking as political opposition dwindles. As Republican Georgia state Rep. Donny Lambeth said, “When we looked across the country, and in [neighboring] North Caro- lina, we did not find anywhere that [voting for Medicaid expansion] caused an incum- bent to lose their seat. This just isn’t an issue politically.” 2 Ten Years of Medicaid Expansion in Arkansas: Reflections on a Program That Has Served Nearly 1 in 4 Arkansans Arkansas is receiving attention in the holdout states because of its novel approach to Medicaid expansion, which uses federal funds to provide private health insurance to Arkansans earning up to 138% of the federal poverty level. The Republican-controlledAr- kansas General Assembly not only approved this experiment but has reauthorized the program with a supermajority vote every year. The programhas gone through chang- es and been known by different names, but its basic structure has remained the same to the benefit of patients and the state’s health- care system. For starters, the state’s adult uninsured rate decreased by more than half because of Medicaid expansion. 3 With financial bar- riers to access removed, these newly insured individuals not only got needed preventive services but also specialty referrals to ad- dress existing chronic conditions that had gone untreated for years. Prescriptions were filled and ailments were addressed to avoid preventable illnesses and their associated costs. It was not only the coverage but also the mechanism of insuring individuals that was important. The network available through private insurers to serve the Medicaid ex- pansion population was much broader and more receptive than participating Medicaid providers. This was because providers were paid at commercial rates approximately double the Medicaid payment rates for the same services. These commercial rates not only im- proved access to care for previously unin- sured Arkansans but also greatly reduced uncompensated care costs at hospitals. 4 This cost reduction, combined with revenue from services provided to newly insured adults, served as a lifeline for struggling rural hos- pitals and helped Arkansas avoid the hos- pital closures seen in other states. Between 2012 and 2023, no rural hospital inArkansas closed without being reopened or replaced, whereas 58 rural hospitals closed in the six states surrounding Arkansas during that time. 5 Unfortunately, many of our rural hospi- tals are in jeopardy now because of multiple issues occurring at once — labor shortages, rising labor costs, inflation, and the end of federal pandemic relief funds. Rural hos- pitals also continue to face long-standing challenges, including older and sicker popu- lations compared to those served by hospi- tals in urban areas, as well as fewer patients relative to the fixed costs of services hos- pitals must provide, such as 24/7 staffing of emergency departments. The Center for Healthcare Quality and Payment Reform estimated in January that 20 rural Arkansas hospitals were at risk of closing. 6 If Arkan- sas had not expanded Medicaid, however, the situation would be even more dire, and many hospitals that are open today likely would have closed years ago. Arkansas’ approach to Medicaid ex- pansion has also helped to stabilize our