LITTLE ROCK, Ark. (AP) -- With Arkansas' model plan to use Medicaid funds to purchase private insurance for the poor spared for another year, backers of the nationally watched program are now focusing on changes that will be needed to keep it alive in the future.
State officials and architects of the "private option" said Wednesday they'll spend the coming weeks focusing on proposals Arkansas must submit to the federal government to alter a program that was approved last year as an alternative to expanding Medicaid under the federal health care law. The program survived a defunding attempt on Tuesday, with the House voting to reauthorize the program for another year.
"A lot of people were breathing a sigh of relief yesterday in terms of getting it passed. ... I don't breathe a sigh of relief because I see all the work that has to be done," said Sen. David Sanders, R-Little Rock, one of the lawmakers who helped craft the private option.
Under the private option, Arkansas is using federal Medicaid funds to purchase private insurance for low-income residents. Nearly 94,000 people are receiving subsidized coverage through the first-in-the-nation program, which is being explored by several other Republican-leaning states as a way to implement a key part of the federal health overhaul.
Once Democratic Gov. Mike Beebe signs the private option budget bill into law, the clock will be ticking for the state to begin work on three changes to the program. The state faces a Sept. 15 deadline to request federal approval to set up health savings accounts for participants in the program, expand the use of co-pays and scale back the use of Medicaid-funded nonemergency transportation for private option recipients.
Under the legislation approved this week, the private option ends if the federal government doesn't give Arkansas the OK for these changes by Feb. 1, 2015. That language was included to put pressure on the state to seek the waivers and the federal government to approve them, private option supporters say.
"Those things are important," said Rep. John Burris, R-Harrison. "They're the conservative components of the plan and they need to be implemented by year two."
State Medicaid Director Andy Allison said his department is spending the coming weeks trying to craft the waivers that will have to be submitted for the changes. That will require hashing out details, such as who would be eligible to use the health savings accounts, the amount of money that would be contributed into them and how they would be structured, he said.
Officials also are trying to figure out how to set up the expanded "cost sharing," or use of co-pays, in the private option. Right now, participants in the private option making between 100 percent and 138 percent of the poverty level are subject to co-pays or co-insurance. The legislation requires the state to seek federal approval to expand the co-pays to participants making 50 percent of the poverty level and up.
"What is a reasonable level of cost sharing for an individual or family living below the poverty level? That's a conversation we really haven't had in this state prior to the private option," Allison said.
Private option supporters pushed for scaling back nonemergency transportation after Iowa, which is setting up a compromise Medicaid expansion similar to Arkansas', received federal approval for such a waiver. Allison noted that the legislation doesn't call for the elimination of that transportation, and said officials are looking at what kinds of limits will be needed.
"The question will be and the conversation will come to which transportation services do we really need to provide to this population?" he said.
These changes could help private option supporters, who will face another vote on the program's future when the Legislature convenes for next year's session in January. Backers of the private option say the annual vote on the program gives the state the opportunity to continue tweaking the program and also see how other states are implementing similar models.
"This is the heart and soul of the private option," Sanders said. "It is incomplete today, and it is only through this drive to innovation and the push for consumerism that I think will get us where we need to be and quite frankly give us the opportunity and the chance to get this reauthorized in the future."
Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo .
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.