Affordable Care Act in Arkansas: Policy Decisions & Coverage Impacts

The Affordable Care Act (ACA), the most sweeping overhaul of the American healthcare system since the creation of Medicaid and Medicare in the 1960s, was signed into law by President Barack Obama on March 23, 2010. This infographic presents a timeline of key events in the ACA’s 10-year history at the national level and in Arkansas, including healthcare policy changes that came into existence as a direct result of, or in response to, the law.

10 Years of the Affordable Care Act

ACA 10 Year Timeline

2010 – Dependent coverage up to age 26 becomes available

  • This provision allows adult dependent children to remain on or join their parent’s health insurance until the age of 26.
  • Between November 2010 and November 2011, an estimated 13.7 million young adults ages 19‒25 will stay on or join their parents’ health insurance; 6.6 million of them will be newly eligible to do so because of the passage of the ACA.1

2011 – State-based insurance marketplace rejected in Arkansas

  • The ACA requires each state to create its own marketplace or utilize the federal marketplace.
  • An attempt in the Arkansas General Assembly to pass legislation to establish a state-based marketplace is unsuccessful.2

2011 – Phased closure of Medicare Part D “donut hole” or coverage gap

  • Medicare beneficiaries experience a coverage gap — often referred to as the “donut hole” — after Medicare has paid a certain amount towards beneficiaries’ prescriptions drugs in one year, leaving beneficiaries to pay higher out-of-pocket expenses until reaching a yearly limit.
  • The ACA phases out this coverage gap by reducing the amount that Medicare Part D enrollees are required to pay for prescriptions once they reach the yearly limit by phasing in levels of subsidies for both brand-name and generic drugs.3
  • In 2016, 37,972 Part D beneficiaries in Arkansas will receive discounts, with an average discount of $965 per beneficiary.4

2012 – Medical loss ratio requirements begin

  • The ACA requires most insurance companies covering individuals and small businesses to spend at least 80% of every premium dollar on claims and activities to improve beneficiaries’ quality of care. The remaining amount could be used for administrative costs.5 For insurance companies covering large groups, at least 85% of every dollar must be spent on claims and quality improvement.
  • 147,415 Arkansans will benefit from rebates in 2018, with an average rebate of $110 per person.6

2012 – Federal government selects Arkansas for CPC initiative

  • The Comprehensive Primary Care (CPC) initiative is launched by the Centers for Medicare & Medicaid Services (CMS) with the goal of improving primary care delivery in participating states.
  • Seven regions across the country are selected for the first year of the program, including Arkansas, which will have 69 primary care practices participate by 2013.7
  • The CPC initiative is an early component of the multi-payer implementation of the Arkansas Health Care Payment Improvement Initiative (AHCPII).
  • The most recent Statewide Tracking Report highlights the (AHCPII), including CPC:
    • Through the Comprehensive Primary Care Plus Program, $90 million in CPC+ payments will be made to Arkansas providers from 2017–2018 for practice transformation, to enhance care coordination, and achieve milestones for quality.

2013 – Arkansas enacts “Private Option” Medicaid expansion

  • The Arkansas General Assembly passes legislation in 2013 to authorize Medicaid expansion.
  • The state utilizes a premium-assistance model to secure private health insurance, offered on the health insurance marketplace, for individuals ages 19‒64 with incomes at or below 138% of the federal poverty line.8 The program is officially named the Arkansas Health Care Independence Program and unofficially becomes known as the “Private Option.”
  • 250,476 Arkansans will be enrolled in the state’s expansion program as of February 2020.9

2013 – Healthcare.gov launches with technical challenges

  • The federally managed website, healthcare.gov, launches as a place where individuals seeking coverage through the marketplace can shop and compare available health plans.
  • The website experiences numerous technical challenges in its earliest days of deployment, as is documented in a report from the Government Accountability Office.10

2014 – The individual mandate and protections for pre-existing conditions begin

  • The ACA’s individual mandate provision goes into effect, requiring individuals to obtain health insurance coverage to avoid a tax penalty.
    • Subsidies are available on a sliding scale to purchase coverage.

    • 60,034 Arkansans will have coverage through the state’s health insurance marketplace as of March 2020.11

  • The ACA’s protections for pre-existing conditions go into effect, requiring that health plans allow individuals to enroll regardless of their health status, age, gender, and other factors.

2014 – The Private Option narrowly clears first renewal hurdle in Arkansas Legislature

  • The Arkansas General Assembly passes funding to continue the state’s Private Option Medicaid expansion program after fifth voting attempt.12
  • Supermajority of votes (75% of votes in each chamber) is required to pass the program funding.

2015 – Arkansas Healthcare Transparency Initiative enacted

  • The Arkansas Healthcare Transparency Initiative Act of 2015 is enacted, furthering the efforts of the Arkansas All-Payer Claims Database (APCD) project by establishing a mandate for certain entities to submit healthcare data.
  • The Arkansas APCD was initially developed through a federal grant opportunity available from the Center for Consumer Information and Insurance Oversight (CCIIO), established through the ACA.13
    • 2017 state legislation will add medical marijuana data, hospital discharge and emergency department data, vital records data, and disease registry data.

2015 – Large employer mandate to offer coverage begins

  • The ACA requires that employers with 50 or more full-time employees offer health insurance or face financial penalties.14

2016 – Coverage and competition increase in Arkansas; insurance costs stabilize

  • By 2016, Arkansas’s statewide uninsured rate is 9.4%, lower than any of the surrounding states.15
  • Arkansas has four insurers participating in the state’s health insurance marketplace, while surrounding states struggle to maintain a competitive market.16

2016 – Federal waiver for Private Option extended; program renamed Arkansas Works with new enrollee obligations

  • The Arkansas General Assembly votes to adopt a new program, named Arkansas Works.
  • Arkansas Works retains the foundation of the Health Care Independence Program — individual plan premium assistance — but adds new features intended to strengthen employer-sponsored coverage and promote wellness and personal responsibility.17

2017 – Legislators enact work and community engagement requirements to maintain Arkansas Works coverage

  • The Arkansas General Assembly enacts additional modifications to Arkansas Works, including incorporation of a work and community engagement requirement as a condition of eligibility and limitations on retroactive eligibility.18

2017 – Individual mandate penalty reduced to $0

  • Congress eliminates the financial penalties related to failure to comply with the mandate.

2018 – Private Option evaluation report issued

  • ACHI publishes the federally required demonstration waiver evaluation, “Arkansas Health Care Independence Program: Final Report.”19
  • Key findings from the report:
    • Geographic and network access was comparable for traditional Medicaid enrollees and qualified health plan (QHP) enrollees.

    • For QHP enrollees there was greater reported and observed access to primary care and subspecialty visits.

    • There were observed differences in emergency room utilization:

      • more appropriate emergency room use in QHPs

      • higher utilization rates in Medicaid

      • more non-emergent care delivered in emergency room for Medicaid

    • Clinical outcomes improved in QHPs, with the exception of pregnancy care and opioid utilization.

2018 – Arkansas joins 19 other states suing the federal government to strike down the ACA

  • Twenty states sue to strike down the ACA, asserting that the repeal of the individual mandate’s tax penalty rendered the entire law unconstitutional.

2019 – Flurry of peer-reviewed articles published assessing the impact of Medicaid expansion

2019 – Federal court halts work and community engagement requirement

  • U.S. District Judge James E. Boasberg blocks the work and community engagement requirement in Arkansas.
  1. Collins, S.R., et. al. “Young, Uninsured, and in Debt: Why Young Adults Lack Health Insurance and How the Affordable Care Act Is Helping—Findings from the Commonwealth Fund Health Insurance Tracking Survey of Young Adults, 2011.” The Commonwealth Fund. June 8, 2012. Retrieved from https://www.commonwealthfund.org/publications/issue-briefs/2012/jun/young-uninsured-and-debt-why-young-adults-lack-health-insurance []
  2. ACHI, “Future of Arkansas’s State-Based Health Insurance Marketplace.” June 2015. Retrieved from https://achi.net/wp-content/uploads/2018/01/Future-of-Arkansass-State-Based-Health-Insurance-Marketplace.pdf []
  3. Kaiser Family Foundation, “Explaining Health Care Reform: Key Changes to the Medicare Part D Drug Benefit Coverage Gap.” March 2010. Retrieved from https://www.kff.org/wp-content/uploads/2013/01/8059.pdf []
  4. Centers for Medicare & Medicaid Services, “State-by-State Information on Discounts in the Medicare Part D Donut Hole Through December 2016.” 2016. Retrieved from https://downloads.cms.gov/files/Part%20D%20Donut%20Hole%20Savings%20by%20State%20YTD%202016.pdf []
  5. Kaiser Family Foundation, “Explaining Health Care Reform: Medical Loss Ratio (MLR).” February 2012. Retrieved from https://www.kff.org/health-reform/fact-sheet/explaining-health-care-reform-medical-loss-ratio-mlr/ []
  6. Kaiser Family Foundation, “Total Medical Loss Ratio (MLR) Rebates in All Markets for Consumers and Families.” 2018. Retrieved from https://www.kff.org/health-reform/state-indicator/mlr-rebates-total/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D []
  7. Press Release, “Primary care practices in Arkansas chosen to test unique investment in coordinated medical care.” CMS Media Relations Group, Arkansas Medicaid, Arkansas Blue Cross Blue Shield, QualChoice, and Humana. August 2012. Retrieved from https://humanservices.arkansas.gov/images/uploads/newsroom/CPCI%20announce%20final.pdf []
  8. ACHI, “Arkansas Health Care Independence Program (“Private Option”) Section 1115 Demonstration Waiver Final Report.” June 2018. Retrieved from https://achi.net/wp-content/uploads/2017/05/Final-Report-no-appendices.pdf []
  9. Arkansas Department of Human Services, “Monthly Enrollment and Expenditures Report Calendar Year 2020.” February 19, 2020. Retrieved from https://humanservices.arkansas.gov/images/uploads/newsroom/Monthly_Enrollment_and_Expenditure_Report_JAN_2020.pdf []
  10. United States Government Accountability Office, “Healthcare.gov: CMS Has Taken Steps to Address Problems, but Needs to Further Implement Systems Development Best Practices.” March 2015. Retrieved from https://www.gao.gov/assets/670/668834.pdf []
  11. Arkansas Insurance Department, “Federally Facilitated Marketplace Enrollments [Plan Year 2019 consumers greater than 138% of the Federal Poverty Level.” March 1, 2020. Retrieved from http://rhld.insurance.arkansas.gov/Info/Public/Reports []
  12. Lesnick, G., “Private option passes Arkansas House after 5th vote.” March 2014. Retrieved from https://www.arkansasonline.com/news/2014/mar/04/private-option-passes-arkansas-house-after-5th-try/?latest []
  13. SHADAC, “State All-Payer Claims Database (APCD) Snapshots: CCIIO Cycle III Rate Review Grants Fund New APCDs.” March 2014. Retrieved from https://www.shadac.org/sites/default/files/Old_files/CCIIO%20Cycle%20III%20APCD%20Grants%203-10-2014_.pdf []
  14. Internal Revenue Service, “Affordable Care Act Tax Provisions for Large Employers.” Retrieved from https://www.irs.gov/affordable-care-act/employers/affordable-care-act-tax-provisions-for-large-employers []
  15. U.S. Census Bureau, Small Area Health Insurance Estimates—Arkansas and Surrounding States. 2016. Retrieved from https://www.census.gov/data-tools/demo/sahie/#/?map_yearSelector=2016&s_year=2017,2016&s_statefips=22,28,29,40,47,48&s_searchtype=s []
  16. Kaiser Family Foundation, “Insurer Participation on ACA Marketplaces, 2014-2010.” November 2019. Retrieved from https://www.kff.org/private-insurance/issue-brief/insurer-participation-on-aca-marketplaces-2014-2020/ []
  17. U.S. Department of Health & Human Services, CMS Extension Approval Letter. December 2016. Retrieved from https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/ar-works-amndmnt-appvl-12292017.pdf []
  18. AR Act 6, 2017, 91st General Assembly 1st Special []
  19. ACHI, Private Option Report. []