As leaders from the House and Senate will soon begin meeting to find common ground on their dueling Medicaid expansion proposals, some people have pointed to Arkansas as a model that could prove successful in Mississippi.
Arkansas, a red state that shares many demographic similarities with Mississippi, implemented its expansion plan, now called Arkansas Health and Opportunity for Me (ARHOME), in 2014. The program provides health coverage to about 250,000 Arkansans. It has cut the state’s uninsured rate in half, and it has helped struggling hospitals stay open.
The expansion program in Arkansas has been so successful that it’s been renewed each year since 2014 by a supermajority of the state’s Republican-controlled legislature.
READ MORE: ‘A no-brainer’: Why former Arkansas Gov. Mike Beebe successfully pushed Medicaid expansion
Mississippi Today invited Dr. Joe Thompson, who was Arkansas’ surgeon general under Republican Gov. Mike Huckabee and Democratic Gov. Mike Beebe, to explain how Arkansas’ expansion program has worked. Thompson now serves as president and CEO of the Arkansas Center for Health Improvement.
Mississippi Today: Arkansas implemented a pretty unique Medicaid expansion model. How does your state’s program work?
Dr. Joe Thompson: Instead of enrolling uninsured people in the state-run Medicaid program, Arkansas obtained permission from the federal government to use federal Medicaid funds for “premium assistance” — an historically available but rarely used strategy by states. Arkansas purchases private health insurance plans offered on the health insurance marketplace to provide adult Arkansans earning up to 138% of the federal poverty level insurance coverage — with 90% of the costs coming from the federal government.
Newly covered individuals effectively get private coverage and the healthcare access they need; providers get paid commercial insurance rates far higher than Medicaid rates; and insurers benefit because the state is a large, guaranteed purchaser in an otherwise risky individual insurance market.
Governors and legislators have made changes to the program over the years, including a work requirement that was implemented in 2018 and blocked by a federal judge the following year, but the basic structure has remained the same.
MT: How has the program impacted Arkansas?
Thompson: For starters, it cut our adult uninsured rate, which had been among the highest in the nation, by half. Newly insured Arkansans gained access to treatment for chronic conditions that had gone untreated for years, as well as preventive care that allowed them to avoid other health problems and associated costs.
The newly insured also became able to pay for hospital visits, reducing uncompensated care costs at Arkansas hospitals by more than half. Since 2012, no rural Arkansas hospital has closed without being reopened or replaced, while 59 rural hospitals have closed in the six states surrounding Arkansas, including five hospitals in Mississippi.
MT: Some Mississippians are concerned about being able to afford the state match to draw down federal dollars. How has that gone in Arkansas?
Thompson: The federal government pays 90% of expansion costs, but even so, opponents of Medicaid expansion warned that Arkansas’ obligation to pay the remaining 10% would break the budget. In 2016, however, a consultant hired by the Republican legislative leadership analyzed the economic impact of Medicaid expansion and found it would have a net positive impact of $757 million on the state budget between 2017 and 2021 through reduced state expenditures and increased tax revenues.
It’s important to note that the residents of Mississippi and the other holdout states have not been spared from paying for Medicaid expansion. They have been helping to fund it for over a decade through their federal tax dollars, but the money has been flowing into states like Arkansas and Louisiana instead of benefiting the working poor, hospitals, and economies of their home states.
MT: There’s been some concern expressed about how expansion would affect insurers in Mississippi. How has the Arkansas model addressed similar concerns there?
Thompson: Some benefits Arkansas has received from Medicaid expansion are tied to unique aspects of the state’s program. Medicaid expansion is a huge decision for states — they can focus on the expansion decision alone or, as Arkansas did, use expansion to shape both the private and public health insurance systems.
Prior to our expansion, insurance carriers could cherry-pick the counties in which they would offer coverage. Arkansas now requires insurers participating in the exchange to offer coverage statewide, creating competition and consumer choice in all areas of the state. Arkansas also enrolled people deemed “medically frail” in traditional Medicaid, creating an expansion population that was relatively young, healthy and low-risk for insurers to cover. In 2014, average marketplace premiums in Arkansas were among the highest in the region, but since 2017 they have been lower than in any of the surrounding states, including Mississippi.
Arkansas’ decision to provide private health coverage has also been advantageous for enrollees. Private coverage does not carry the stigma of Medicaid, and because payment rates are higher for commercially insured patients than for Medicaid patients, Medicaid expansion enrollees in Arkansas have been less likely to encounter barriers to care than traditional Medicaid enrollees.
MT: How many people are actually enrolled in Arkansas, and should Mississippians worry about costs if more people enroll as time goes on?
Thompson: Some opponents of Medicaid expansion have accused Arkansas’ program of out-of-control growth, pointing out that enrollment was projected at the program’s inception to be about 250,000 but grew to more than 340,000 in 2022. In fact, enrollment only reached that level because of a now-defunct rule that required states to keep people continuously enrolled in Medicaid programs during the COVID-19 public health emergency. Arkansas resumed eligibility checks for Medicaid programs last April, and by the end of 2023, total enrollment in ARHOME was just under 252,000 — very close to original projections.
Medicaid expansion’s slow journey toward nationwide adoption is reminiscent of the original federal-state Medicaid partnership, which was enacted by Congress in 1965 but not adopted by every state until 1982, when the last holdout, Arizona, came on board. Change can be hard, but polls show that voters, including Mississippi voters, favor Medicaid expansion. It’s no wonder that the number of holdout states keeps dwindling.
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