Centene is exiting Arkansas’ Medicaid expansion program in 2027, citing funding challenges as states absorb steep cuts to Medicaid.
Centene has decided not to renew its participation in Arkansas Health and Opportunity for Me, or ARHOME, the state’s Medicaid expansion program created under the Affordable Care Act in 2013, a spokesperson confirmed, calling it a “difficult decision.”
ARHOME covers Arkansans aged 19 to 64 with income up to 138% of the federal poverty level. The state uses Medicaid funding to buy those enrollees coverage in plans through the ACA exchanges, unless they’re medically frail, in which case they stay in traditional fee-for-service Medicaid.
ARHOME is a relatively small slice of Centene’s business. The program represents about about 77,000 members and around $400 million to $700 million in premiums for Centene, according to state enrollment data and estimates from J.P. Morgan analysts. In comparison, the St. Louis-based insurer has 12.4 million Medicaid members and brings in $23 billion in annual premiums from the safety-net program overall.
But Centene’s exit is notable for signaling how Medicaid insurers are reconsidering their state footprints in advance of looming work requirements, J.P. Morgan analyst John Stansel wrote in a research note on Tuesday.
“For the last 13 years we have valued the opportunity to serve the Medicaid expansion population in Arkansas. This decision was not made lightly,” the Centene spokesperson said. But “with current funding challenges, we believe the program is not sustainable for our continued participation in 2027.”
Medicaid is facing almost $1 trillion in cuts over a decade from the “One Big Beautiful Bill,” Republicans’ sweeping reconciliation legislation passed last summer. More than one-third of the cuts stem from new requirements making Medicaid eligibility for expansion adults conditional on working, volunteering or attending school for at least 80 hours a month.
Republicans argue the policy will increase employment and ensure people aren’t taking advantage of Medicaid. However, state-level trials of work requirements have shown little success, given that most Medicaid recipients who can work are already doing so. In addition, instituting and tracking work requirements adds significant administrative burden onto both state regulators and Medicaid enrollees that can lead eligible individuals to be improperly booted off the program, experts say.
Arkansas tried to enact a work requirements program in 2018, but a federal judge blocked the policy after more than 18,000 Arkansans lost coverage.
Now, Arkansas is soft launching new Medicaid work requirements ahead of schedule, kicking off compliance checks at the beginning of July. The state doesn’t plan to remove any enrollees before the Jan. 1 deadline.
Arkansas’ Department of Human Services estimates that roughly 42,000 Medicaid enrollees will lose coverage as a result of the new policy.
Centene’s exit portends further disruption for the state’s expansion population, who will have to move to other plans. Centene is one of two companies that manage the plans in Arkansas, so its withdrawal leaves nonprofit Blues licensee Arkansas Blue Cross and Blue Shield the lone participant in ARHOME.
Centene will continue to offer Medicaid managed care for the state’s non-expansion population, along with ACA marketplace plans through its Ambetter subsidiary, Medicare coverage and employer-sponsored plans in Arkansas, a spokesperson said.
Centene is one of many insurers rejigging their offerings, slammed by high spending and insufficient reimbursement in certain businesses — especially government programs like Medicare, Medicaid and the ACA where they have less direct control over how much they’re paid.
That’s resulted in national insurers exiting entire markets, including CVS’ Aetna, which left the ACA exchanges for 2026, and Cigna, which is bowing out of both the ACA and MA markets. Some regional insurers and integrated health systems have also thrown in the towel on most of their offerings this year, including Providence and Baylor Scott & White.
2026 has also seen more targeted exits, especially in the ACA exchanges, which have been particularly stressed as the loss of more generous federal subsidies exacerbates underlying cost growth.
In the past two months, Centene announced plans to leave its ACA business in New Hampshire, Elevance said it was exiting the small group exchanges in Ohio, CareSource said it would exit Indiana’s ACA marketplace and Medica said it was discontinuing individual ACA plans in three states.
Centene has also looked to its workforce for savings, offering most of its more than 60,000 employees buyouts earlier this summer, while shoring up its board and executive leadership.
