All eyes on the Arkansas Medicaid experiment

January 12th, 2015

Arkansas’ unique Medicaid plan was crafted by state politicians who opposed the Affordable Care Act’s Medicaid expansion provision, but were concerned about the economic effects of doing nothing. The experiment was crafted to appeal to both sides of the political aisle while creating about 200,000 newly eligible Medicaid enrollees. Estimates of the plan say it will save state taxpayers about $90 million, mainly from reducing uncompensated medical care.

The plan is called the “private option” and enrolls recipients in typical private health plans found on the state exchange. Enrollees have a greater network of doctors and hospitals from which to choose than typical Medicaid plans. Doctors and hospitals receive more compensation through the private insurers than through traditional Medicaid, and officials hope that a greater number of private plan enrollees will bring more insurance companies to the pool. The Arkansas model also eliminates the issue of coverage changing or ending when a person’s income changes; a person can keep his or her plan regardless of income change.

A similar plan has been implemented in Iowa, and other states including New Hampshire, Florida, Pennsylvania, and Utah are showing interest, according to Kaiser Health News. But while other states watch and consider the plan, it’s currently in jeopardy in Arkansas – 75% of the members of the state House and Senate must approve the appropriations bill by June 31 of this year, and the plan’s opponents are seeking to put an end to it. Interested states may not be so eager to give it a shot if the Arkansas plan is killed.