Health Plan for Poor in Arkansas Would Hardly Cost More

According to a cost analysis, people under Medicaid could be moved to a “private Option’ at a very low cost.

The estimates showed that less than 15% would be the additional cost and when worked realistically there would be no added federal cost.

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In 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 price pressure.

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.

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Arkansas state officials have designed an exceptional plan to expand Medicaid, lead by Governor Mike Beebe, a Democrat.

The governor's proposal would expand coverage to state residents who earn up to 133 percent of the poverty line, or $15,415 per year.

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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 poverty level.

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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 deal.

Conservatives like the Arkansas concept because the privatization avoids a government expansion.

References:

Hannah Punitha (IRDA Licence Number: 2710062)

Suzi Parker, March 2013

Source-Medindia