Mar. 31, 2006 – A new Arkansas small-business health-insurance plan has healthcare advocates concerned that its limited scale and scanty benefits are not worth its cost to the stateâ€™s low-income residents. The plan is the latest implementation of a federal initiative allowing states to shift Medicaid money into new, public insurance programs.
Arkansas Governor Mike Huckabee rolled out the program as an innovative way to help small businesses provide employee health insurance. Some healthcare advocates, on the other hand, wonder if the initiative is more about political bragging rights in Huckabeeâ€™s possible bid for president in 2008 than about providing meaningful coverage to the stateâ€™s working poor.
With enrollment expected to begin by January 2007, the Arkansas Safety Net Benefit Program will offer a barebones insurance package to businesses that have 50 or fewer workers and have not provided employee health insurance for one year.
Funding for the program will come from state and federal governments, as well as the small business owners and possibly the employees themselves. The money will be spent on a private insurance provider, and the plans will include six clinician visits, seven hospital days, two outpatient or ER visits per year, and two prescriptions per month, according to the Arkansas Department of Health and Human Services. Enrollees will be responsible for co-payments of 15 percent, with a maximum out-of-pocket cost of $1,000 per year.
Healthcare advocates believe that the potential expense to low-income Arkansans outweighs the scant health benefits provided by the plan.
Participating small business owners will pay up to $100 a month for each worker who earns more than twice the Federal Poverty Level. For each lower-paid employee, businesses will pay $15 a month, with federal and state governments subsidizing the remainder of the cost. Participating employers will be required to enroll all of their workers, regardless of how much they earn.
"It is still in some form of development, but the only exemptions at this point will be those who are on a spouseâ€™s insurance," said Julie Munsell, spokesperson for the Arkansas Department of Health and Human Services (DHHS).
"This will result in an expansion of coverage across all income levels," explained Kevin Ryan, associate director for policy and projects at the nonpartisan Arkansas Center for Health Improvement, which headed up the initiative that designed the plan.
But the flipside of the 100 percent enrollment rule is that if just one employee opts out, the entire company becomes ineligible. Thus, some small business owners may make enrollment in the program a mandatory condition of employment, according to Munsell.
And with poverty widespread in the state, some healthcare advocates wonder whether small business owners will participate in the Safety Net plan, even with the subsidies that it provides.
Neil Sealy, head organizer for the Arkansas Association of Community Organizations for Reform Now (ACORN), said he is unconvinced that enough employers will buy into the program. "I think the advantage to employers is it's good to cover your workers and this is a way to do it because health benefits will provide a more stable workforce," he said. "But I think there are a lot of employers who are very short-sighted who do not see it that way."
Due to the small scale of the program, some doubt it will even make much of a dent in the stateâ€™s high numbers of uninsured.
Others wonder if small businesses will be able to afford it. "I donâ€™t think this is going to hurt anything for them to try this, but when it gets out into the real world, can a small businessman who hasnâ€™t been able to participate on any level recently for health care for his employees â€“ is this going to appeal to him?" asked Orell Fitzsimmons, field director for the Service Employees International Union (SEIU) Local 100. Orellâ€™s union local was part of a 21-member roundtable that was instrumental in drafting the Arkansas Safety Net Benefit Program.
Munsell told The NewStandard that while the intent behind the program is to help low-income employees, "thereâ€™s nothing that would prohibit [companies] from either sharing that cost with their employees or passing that on in some way."
The concern among many healthcare advocates is that, without any restriction in place prohibiting employers from splitting the expense of the Safety Net Program with their employees, these costs will be passed down to workers of all income levels.
And while low-income participants may be forced to share in its cost, the programâ€™s expense may also affect government-insurance beneficiaries who do not even enroll in the plan. Federal money for the Safety Net Program will come out of the stateâ€™s existing allocations for Medicaid, as well as the State Childrenâ€™s Health Insurance Program.
Some wonder if the initiative is more about political bragging rights.
"Arkansas is going to have to come up with a plan to cut back on the coverage of the pre-existing Medicaid beneficiaries in the state: children, some parents, some people with disabilities and some elderly," said Cindy Mann, director of the Center for Children and Families at Georgetown Universityâ€™s Health Policy Institute.
But Munsell, speaking for the state DHHS, told TNS, "At this point we have no plans to reduce [or] alter any of our programs."
Nonetheless, Mann and other healthcare advocates believe that the potential expense to low-income Arkansans outweighs the scant health benefits provided by the plan, and they are concerned about what will happen to participants who require more than six doctor visits per year.
"The waiver that was approved provides very limited coverage at a considerable cost to the low-wage workers it seeks to cover," Mann noted.
"We are grateful that the uninsured who qualify for this insurance coverage will have access to health insurance and to health care," said Sip Mouden, executive director of Community Health Centers of Arkansas, a nonprofit healthcare-advocacy association. But, she said, "What happens if these participantsâ€™ health status requires additional or continuous and comprehensive health care?" Moudenâ€™s organization includes nonprofit health centers that serve immigrants and homeless people, and communities at large.
Mouden worries that after their six visits have been used up, participants will essentially go back to being uninsured again.
And due to the small scale of the program, some healthcare advocates doubt it will even make much of a dent in the stateâ€™s high numbers of uninsured.
"Even if it does get fully enrolled, it will cover just a few tens of thousands more than the increase in the number of uninsured," noted Dr. Ken Frisof, referring to the stateâ€™s ever-expanding list of people lacking health coverage. Frisof is a family physician who is national director of the advocacy group Universal Health Care Action Network.
According to statistics from the Arkansas Center for Health Improvement, the number of uninsured Arkansans rose from 391,594 in 2001 to 455,798 in 2004 â€“ an increase of 64,204 people. Meanwhile, Arkansas state government officials have said the new insurance program will allow for a maximum of 80,000 participants during the course of its initial five-year period.
"When you ask the question about what could be done better," Frisof said, "the key question is: Whoâ€™s really behind it? How strong are they behind it? Who is the driving force in state politics, and what do they really want?" Both Frisof and Fitzsimmons of SEIU Local 100 pointed out that Gov. Huckabee, who is the political force behind the Safety Net Benefit Program, has presidential aspirations.
"I guess Mr. Huckabee is going to use it to run for president," Fitzsimmons commented.
Arkansas is the thirteenth state to make use of a federal initiative that allows for Medicaid and State Childrenâ€™s Health Insurance Program dollars to be shifted into new programs that expand health insurance, especially to those people who earn 200 percent or less of the Federal Poverty Level. And as of autumn 2003, programs started under this initiative had resulted in a net gain in coverage of just 200,000 people, which is a fraction of overall recent Medicaid and SCHIP enrollment growth, according to a March 2005 report co-authored by Mann of GUâ€™s Health Policy Institute.
"What weâ€™ve seen over the years is that there just has not been a lot of expansion of coverage through [the initiative] â€“ particularly in tight fiscal times â€“ because states have not been in a position to put in significant new dollars," Mann said. In the case of the Arkansas Safety Net Benefit Program, the state is expected to invest a total of $18 million over the course of the programâ€™s initial five-year period, complementing $27,927,552 in federal funds.
Arkansas is the only state so far to use the federal initiative to focus on workers of all income levels.
"What we are requiring the business to do is cover their employees, regardless of their income," Munsell said. "So, for our purposes, it becomes not as much a low-income health insurance safety net program, but a safety net program for employees of small business, period."
But Fitzsimmons of the SEIU is much more skeptical. "This whole policy â€“ not to prejudge it â€“ but itâ€™s just a bunch [of] ado," said Fitzsimmons. "In Arkansas, we need to have health care for everybody, because when people get sick, they ought to get well. It shouldnâ€™t be a matter of what family you were born into or what neighborhood you live in."
"We need to learn that weâ€™ve got to take care of everyone," he added. "Weâ€™re all in this boat together."