a report from the State Department of Human Services, along with input from Arkansas Insurance Commission and consultants, Private insurance
would coast 50% more than Medicaid.
The Arkansas proposal would bring in
250,000 new low-income adults into the private market, creating competition and
According to the report, by including Medicaid-funded
adults in the exchange, the federal treasury would spend about $700 million
less on tax subsidies in Arkansas.
state officials have designed an exceptional plan to expand Medicaid, lead by
Governor Mike Beebe, a Democrat.
proposal would expand coverage to state residents who earn up to 133 percent of
the poverty line, or $15,415 per year.
The Arkansas legislature did not
want to expand Medicaid for those under 133 percent of the federal poverty
line, an option under the Affordable Care Act. Instead, it wanted to use
billions in Medicaid funding to buy private insurance for that same population.
With a verbal agreement with
Secretary of Health Kathleen Sebelius, state officials find they could use Medicaid funds to acquire
private insurance for adults with incomes below 133 percent of the federal
The insurance would be purchased
through a health insurance exchange that Washington is scheduled to begin
operating with Arkansas on January 1, 2014. The online marketplace would allow
people with incomes of up to 400 percent of the poverty line to obtain private
coverage at federally subsidized rates.
The Arkansas deal could provide a
template for other states. Ohio Governor John Kasich, a Republican, is already
in talks with state legislators in Columbus about the prospects of a similar
Conservatives like the Arkansas
concept because the privatization avoids a government expansion.
Hannah Punitha (IRDA Licence Number: 2710062)
Suzi Parker, March 2013