Arkansas Submits ARHOME Renewal with New Work Requirement, Eyes Major Savings

Arkansas has submitted a renewal application for its Medicaid expansion program, ARHOME (Arkansas Health and Opportunity for ME), which must be renewed every five years. The updated plan includes a revised work requirement and other changes aimed at reducing program costs, which currently range between \$2 billion and \$2.5 billion annually.

ARHOME provides government-subsidized health coverage to approximately 225,000 Arkansans. The federal government covers 90% of its costs and must approve any proposed changes. A key revision in the renewal is a new version of the work requirement, designed to align with federal court rulings. Unlike the previous mandate that required recipients to be employed or seeking work, the updated plan focuses on individualized development plans that may include employment or continuing education. Noncompliance could result in benefit suspension.

In addition, Act 774—passed by the legislature earlier this year—aims to generate over \$260 million in savings. Most of those savings are expected from a more transparent prescription drug rebate process and an increased medical loss ratio requirement for insurers, raised from 80% to 85%, meaning more funds must be spent directly on patient care.

First introduced in 2013 as the “private option,” Arkansas was the first state to use private insurers for Medicaid expansion under the Affordable Care Act. It later evolved into “Arkansas Works” before becoming ARHOME. Since its inception, the program has significantly reduced the state’s uninsured rate and eased the burden on hospitals by lowering unnecessary emergency room visits.

The proposed changes are now under review by federal authorities.