Arkansas Safety Net Benefit Program
March 2006
In March, 2006, the Centers for Medicare and Medicaid Services approved of Arkansas’ plan to expand coverage to up to 50,000 uninsured adults over five years. The groundbreaking plan targets small to medium-sized employers that have not been able to offer health insurance coverage to their employees. The Arkansas Safety Net Benefit Program, a HIFA 1115 waiver, enables participating employers—only those with fewer than 500 employees that have not provided group health insurance coverage to employees in the last year are eligible—an opportunity to participate in the program. The program will provide limited coverage to adults who work for a participating employer. The state will use Title XXI and Title XIX funds, as well as funds from the state tobacco settlement and fees from participating employers, to finance the program. Federal matching funds will be used in the following ways:
Arkansas will use Title XXI funds to cover approximately 30,000 parents and spouses of Medicaid and SCHIP children;
The state will use Title XIX funds to cover 20,000 childless adults and spouses between 19 and 64 years of age with incomes up to 200 percent of the FPL.
Adults covered through the program will receive a limited benefit package, which the state expects to cover most basic health care needs of the target population. The benefit package includes six outpatient visits per year, seven inpatient acute care hospital days per year, two outpatient hospital services per year, and two prescription drugs per month. In addition, the program will extend certain services—including smoking cessation and other preventive services—to demonstration enrollees. Enrollees in the state’s ConnectCare 1915(b) program, will transition to the new HIFA demonstration, but their benefits and service delivery will not change.
Enrollees will be required to pay a portion of their health care costs, including a monthly premium of up to $15, a $100 deductible, 15 percent coinsurance for all services except for pharmacy services, and a $1,000 out-of-pocket maximum per year.
The state will solicit competitive bids from private insurance companies to offer the safety net benefits to employers that elect to participate in the program. Employer participation is voluntary; however, the state will require participating employers to achieve coverage among 100 percent of employees.
The program will be rolled out in two phases. The first phase is expected to begin in early 2007 and enrollment will be limited to 15,000 enrollees. The state will modify the program based on experiences in Phase I, and in Phase II, enrollment levels will likely increase.
The state anticipates that this program will reduce the uninsured rate by four percent. CMS requires that the state address in its quarterly reports the state’s progress towards reducing the rate of uninsured. In addition, CMS requires the state to monitor any changes in employer-sponsored insurance that may result from the HIFA waiver.
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