The state of Arkansas has requested a two-year extension from federal officials to maintain its hybrid Medicaid expansion program, known as Arkansas Health and Opportunity for Me (ARHOME), while developing a replacement. This comes after the program’s formal renewal was denied by federal authorities last week.
The federal Centers for Medicare and Medicaid Services (CMS) recently rejected a waiver request from the Arkansas Department of Human Services (DHS) that would have extended ARHOME through 2031. ARHOME’s current waiver is set to expire on December 31, 2028. According to DHS Secretary Janet Mann, more time is needed to create and implement a new Medicaid system that ensures continuity of care for the more than 200,000 Arkansans enrolled in the program.
“CMS has signaled it will support efforts to ensure a smooth transition, and DHS looks forward to productive discussions on the extension in the near future,” DHS spokesperson Gavin Lesnick said in a prepared statement.
The federal rejection follows the passage of the One Big Beautiful Bill Act of 2025, which introduced stricter budget neutrality rules requiring that programs like ARHOME not cost the federal government more than projected without the program in place. Medical providers have expressed concerns that losing ARHOME could strain the state’s healthcare system, which already faces significant challenges.
Mann’s letter advocated for the extension to allow DHS to responsibly manage the transition to a new system and highlighted the importance of minimizing disruptions to coverage. The state’s Medicaid program has faced previous challenges, including a controversial work requirement implemented in 2018, which a federal judge later struck down.
ARHOME operates as a hybrid model where Medicaid expansion funds are used to buy private insurance for eligible residents. Arkansas was the first Southern state to adopt such a model after the Affordable Care Act was enacted. However, the program’s future faces uncertainty. Republican legislative leaders, including Senate President Pro Tempore Bart Hester, have expressed skepticism about continuing Medicaid expansion entirely, signaling potential shifts toward alternative models like managed care or fee-for-service systems.
A further complication arose last month when Centene, one of ARHOME’s primary private insurers, announced it would withdraw from the program. DHS clarified that Centene’s departure was unrelated to CMS’s recent decision.
Health advocates, including Camille Richoux of Arkansas Advocates for Children and Families, have warned of significant consequences if Medicaid expansion ends. Richoux noted the program has contributed to a drop in the state’s uninsured rate and helped reduce hospitals’ costs for treating uninsured patients. “Taking the time to thoughtfully build and carefully transition to a new system is the best way to minimize disruptions in coverage, protect patients and Arkansas’s larger healthcare system, and give state officials the opportunity to get this transition right,” she said in a statement.
As Arkansas prepares to implement new requirements for Medicaid expansion recipients next year, thousands of residents could lose coverage under policies tied to the One Big Beautiful Bill. Mann emphasized the importance of balancing the new policies with the transition process. “Shifting to a new program on the same day we initiate the new work requirement policy could distract from those efforts,” she noted.
A spokesperson for CMS declined to comment on the pending waiver request. Discussions between state and federal officials are expected to continue in the coming months.