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‘Private option’ Medicaid expansion to continue in Arkansas

BY Jason Kane  March 5, 2014 at 4:22 PM EST

Map of Arkansas

The Arkansas experiment to use federal Medicaid dollars to help low-income people buy private health insurance plans will survive another year.

This “private option” of Medicaid expansion — which narrowly passed in the state’s House of Representatives on Tuesday after being rejected in four previous votes – allows those below 138 percent of the poverty level to enroll in plans like Blue Cross and Blue Shield through the state’s insurance exchange.

Many conservatives in the Republican-controlled legislature found that to be a much more palatable option than enrolling more people in the traditional Medicaid program, which they see as a broken and inefficient system that offers poor-quality care. Offering this alternative allowed Arkansas to bring billions of federal dollars into the state economy, while expanding coverage to some of the state’s sickest individuals and saving hospitals millions in uncompensated care costs.

Nearly 100,000 people have enrolled so far; about 250,000 are eligible throughout the state.

Arkansas devised the plan last spring and received a waiver from the federal government to use Medicaid money to pay for it, with Washington paying 100 percent of the costs for the program in the first three years and the state eventually picking up 10 percent of the tab thereafter.

But just as the idea began picking up steam in other states — Iowa passed a version of the private option and Pennsylvania, New Hampshire, Utah and Virginia are considering plans of their own — the law in Arkansas faced a near-fatal blow.

Watch the NewsHour’s full report:

Under state law, funds for the private option must be re-authorized each year by a three-fourths majority in the 100-member House and 35-member Senate. Meeting that threshold seemed unclear this winter – especially after the disastrous rollout of the Affordable Care Act caused several lawmakers to reconsider their votes this time around.

But the plan narrowly passed the Senate in late February. And now that it’s made its way through the House, reauthorization is expected to be signed by Gov. Mike Beebe, a democrat and big supporter of the plan.

In an interview with the PBS NewsHour in February, Beebe said the private option plan is not only a model for other conservative states who don’t want to expand traditional Medicaid, but a case of good governance.

“This was a great example of good bipartisan working relations, because Republican leaders in the state legislature — both the House and the Senate — helped fashion and craft this private option, and they worked with Democrats, and they worked with our office, and they worked with our Human Services Department to craft what ultimately was done. It’s a shining example of how Republicans and Democrats can work together in a bipartisan fashion to solve problems,” Beebe said. “Washington could take a lesson from that.”