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Over 80,000 Uninsured Arkansans To Get Benefits Under New HHS Plan

Over 80,000 uninsured, low-income workers in Arkansas will have new access to health coverage under a plan approved today by HHS Secretary Mike Leavitt.

The newly-approved Arkansas Safety Net Benefit Program is a public/private partnership that enlists small-to-midsize employers who will enroll up to 80,000 of their workers in a plan financed with a combination of employer, state and federal funds. The median household income in Arkansas is approximately $35,000 and currently only 26 percent of small businesses offer health insurance.

"I am pleased to have worked together with Governor Mike Huckabee in making possible this innovative approach to health coverage for thousands of hard working, yet uninsured Arkansas residents," Secretary Leavitt said. "Employers that have not been able to offer group health insurance in the past will play a critical role in making this partnership successful for them and their workers."

Employers with 500 or fewer workers that have not offered an employee health plan for at least one year will be eligible to participate in the program. Participation for employers is voluntary. Employers who choose to participate must provide the new coverage to all of their uninsured employees. The state, however, will require all uninsured employees of participating businesses to sign up for the new benefit.

Health care costs for workers with incomes of less than 200 percent of the federal poverty level will be paid with state funds and federal Medicaid funds for childless adults and State Children's Health Insurance Program dollars for parents. The federal poverty level for a family of four for 2006 is $20,000. Workers with higher incomes must also participate, without public funding, but they will benefit from the lower negotiated premiums in the health insurance pool. Workers must be uninsured and not have access to any other source of health care benefits to participate.

"We're pleased to work with Arkansas on this innovative program to leverage Medicaid and employer purchasing to provide the biggest expansion of affordable health insurance in Arkansas in many years - and it helps people afford coverage even if they earn more or get a new job," said Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services (CMS), the agency that oversees the Medicaid and SCHIP programs. "We are working closely with states to implement effective ways to expand access to coverage, and this partnership to make affordable private insurance more widely available could be a model for coverage expansions around the country."

The program will offer a basic benefit package designed to meet the needs of the target population. Enrollees will pay a $15 per month premium and 15 percent co-payments with a maximum out-of-pocket cost of $1,000 per year.

The state expects to enroll around 50,000 workers with incomes below 200 percent of poverty and another 30,000 whose salaries are higher. The five-year demonstration is authorized by the administration's Health Insurance Flexibility and Accountability (HIFA) Initiative. HIFA encourages states to coordinate the Medicaid and SCHIP programs to expand mainstream coverage to broader populations. It creates a streamlined demonstration process for states that commit to reducing the number of people without health insurance.

Arkansas is the 13th state to use the HIFA waiver initiative to expand access to health care coverage to the uninsured. More information about the HIFA initiative, including an online template that states can use to submit applications, is available at www.cms.hhs.gov/HIFA/.

Source: United States Department of Health and Human Services

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