ARKANSAS MEDICAID’S UNFUNDED LIABILITIES

 

“The long-term liabilities of the ARKids First program should be identified." Policy Foundation memos, 2006

 

(May 5, 2012) Remarks by Arkansas officials this week have pushed Medicaid, a government medical insurance program, to the policy forefront.  State Human Services Department Director John Selig said Arkansas will have to either slash Medicaid or increase spending due to a projected shortfall.1 Gov. Beebe said Medicaid cuts or new taxes are coming in FY 2014.2 The fiscal impact will be significant. Medicaid was 18.1 percent of the state’s $24.8 billion 2011 budget,3 and Selig contends Arkansas could lose up to $900 million in federal funding without additional state funding.

 

ARKids First & Unfunded Liabilities

 

Gov. Beebe, Director Selig and Arkansas legislators face an obstacle: the unfunded liabilities of ARKids First have not been calculated and disclosed, leaving policymakers without key information to make an informed decision. ARKids First, established under ex-Gov. Mike Huckabee is a youth Medicaid program.  Records show 254,533 enrollees in ARKids ‘A’ (2011), the largest Medicaid enrollee group.  ARKids ‘B’ waivers total 75,027.4

 

Unfunded liabilities represent the fiscal cost of future commitments. They are routinely reported by Social Security and public retirement systems.

 

Policy Recommendation

 

The long-term, unfunded liabilities of ARKids First should be identified so Arkansas policymakers can make informed decisions about Medicaid.

 

--Greg Kaza



1  “As Medicaid shortfall looms, state’s jam laid out at Capitol,” Arkansas Democrat-Gazette, May 1

2  “Beebe echoes state director on Medicaid,” Arkansas Democrat-Gazette, May 2

3  “Arkansas Medicaid Program Overview, SFY 2011,” p. 23, Department of Human Services

https://www.medicaid.state.ar.us/Download/general/MOBSFY2011.pdf

4  Ibid. p. 18, two-thirds (66%) of Arkansas Medicaid beneficiaries (508,074) are ages 20 and under.