Arkansas Program To Target Uninsured Workers
March 13, 2006--As part of a new public/private partnership, thousands of small businesses in Arkansas will soon be able to purchase low-cost health insurance for their employees.
Several years in the making and recently approved by Department of Health and Human Services Secretary Mike Leavitt, the Arkansas Safety Net Benefit Program will pair existing state and federal funds with employer and employee contributions to target the state's approximately 450,000 uninsured. State officials expect the five-year program to cover up to 80,000 participants at its peak.
Under the voluntary program, announced by Gov. Mike Huckabee on March 7, employers pay a $15 monthly fee for each employee with an income less than twice the federal poverty level, or $40,000. Business owners with higher-earning employees will be required contribute $100 per employee. Companies that choose to participate in the program must cover all employees.
Employees enrolled in the program will be charged a $15 monthly premium and 15% co-payments, with a maximum out-of-pocket cost of $1,000 per year. The plan will cover six clinician visits, seven hospital days, two outpatient/ER visits per year and two prescriptions per month, and is aimed at businesses with less than 50 employees.
"There is no doubt that one of the most serious problems facing our state is that most small businesses simply cannot afford health coverage for the workers who most need it, Huckabee said at the announcement.
Intended to be a budget-neutral public/private partnership, the program required the approval of a waiver from the Department of Health and Human Services to allow existing federal funds -- from Medicaid and other sources -- to be reallocated. For its part, the state's contribution will consist of an estimated $18 million drawn from its tobacco-settlement coffers.
Originally devised by the Arkansas Center for Health Improvement, the program takes advantage of the Bush administration's Health Insurance Flexibility and Affordability Initiative, which calls on states to use public/private initiatives to address their disparate health-insurance needs using existent federal funds.
Kevin Ryan, associate director for policy and projects for the Arkansas Center for Health Improvement, cited the state's dire small-business health insurance climate as the impetus for the initiative. Of Arkansas business with less than 50 employees, the center estimates that only 26% offer health insurance to their employees, a figure far below the national average of 43 percent.
Though 13 states have used waivers to address health care issues, Ryan emphasized that Arkansas's program is uniquely wide-ranging. In contrast to other state's waiver programs, which use federal funds to subsidize insurance premiums for those who already have insurance, the Arkansas program would significantly increase the number of insured workers in the state, Ryan said.
"We hope this will have a positive impact on the overall health insurance market stability in the state, Ryan said. "But we think it will also have a ripple effect on families and the entire community.