Arkansas healthcare providers are raising alarms following the announcement that the state’s hybrid Medicaid expansion, known as ARHOME, might not be renewed by the federal government at year’s end. The decision, disclosed Friday by Governor Sarah Huckabee Sanders’ office, could impact over 200,000 Arkansans currently enrolled in the program and intensify strains on the state’s healthcare system.
“Any threat to people not having a payment source is a threat to hospitals, especially in rural areas where margins are razor thin,” said Jodiane Tritt, executive vice president of the Arkansas Hospital Association. “Hospitals can’t absorb any more uncompensated care right now.”
Arkansas was the first southern state to adopt Medicaid expansion under the Affordable Care Act in 2013, operating under a unique model that uses Medicaid funds to purchase private insurance for eligible individuals. However, the federal waiver supporting this program is set to expire on December 31, and the federal Centers for Medicare and Medicaid Services (CMS) has yet to approve its renewal. Sanders’ office has stated that discussions are ongoing regarding a temporary extension of the program.
CMS has not publicly commented on the reasons for delaying the renewal but confirmed that Arkansas’ waiver is under review. According to Sam Dubke, a spokesperson for Sanders, CMS flagged concerns about budget neutrality, which requires the program not to cost more than traditional Medicaid would.
The uncertainty comes as financial pressures have already led hospitals across Arkansas to reduce services or partner with other providers. Additionally, Centene, one of the two insurance providers under the ARHOME program, recently announced its decision to exit the program by next year.
The situation is compounded by upcoming work requirements tied to the federal One Big Beautiful Bill Act, which state officials expect will result in thousands losing coverage. Allison Orris, senior fellow at the Center on Budget and Policy Priorities, noted that such changes could create confusion for program participants. “Anything that creates confusion and uncertainty will have an impact on how people interact with the program and coverage,” Orris said.
While the Arkansas Department of Human Services is pursuing options to preserve coverage, it remains unclear how a potential temporary extension would address service delivery or eligibility questions. Department spokesperson Gavin Lesnick stated that discussions with CMS are ongoing but did not specify details.
Medical groups and state officials, including former Medicaid Director Ray Hanley, have acknowledged potential challenges in finding a long-term solution. Options under consideration include transitioning ARHOME beneficiaries to fee-for-service Medicaid, which offers lower reimbursements, or moving them to a managed care system, which would require extended time for implementation. Hanley emphasized that failing to continue coverage is not a viable option. “I think there is a bipartisan interest in not letting that happen,” he said.
The matter has sparked renewed debates in the Legislature. Although the ARHOME program was reauthorized by Arkansas lawmakers earlier this year, its long-term future remains uncertain. Sanders has indicated she will work on a sustainable model in collaboration with legislative partners during the next regular session scheduled for January.
Carl Vogelpohl, executive director of the Arkansas Medical Society, highlighted the importance of maintaining patient care access during this transition. “Any path forward must prioritize keeping patients connected to their care, reducing administrative barriers that delay treatment, and preserving access to the full spectrum of healthcare services — from primary care clinics to hospitals — in every community across the state,” Vogelpohl said.
As discussions continue, healthcare providers and policymakers are bracing for potential disruptions in the state’s Medicaid landscape, underscoring the critical role ARHOME plays in Arkansas’ healthcare system.