HHS Approves Arkansas Medicaid Expansion Through Private Market

Arkansas has received approval from HHS to expand Medicaid through the private insurance market, Gov. Mike Beebe has announced.

The Arkansas Private Option will use federal funds to provide health insurance premium assistance to more than 200,000 state residents with incomes below or at the federal poverty line, according to a news release. Under the program, the state will fund vouchers that people can use to buy health plans from private insurers through the health insurance exchange under the Patient Protection and Affordable Care Act.

The Private Option's supporters have said it will be less costly than traditional government-administered Medicaid thanks to increased access to care, better competition, less hassle and fewer interruptions of care and coverage from beneficiaries moving in and out of eligibility as their incomes change. Studies call those cost-saving claims into question, however, as private insurers typically reimburse providers at higher rates than Medicaid.

Arkansas isn't the only state to pursue a Medicaid expansion plan that involves private health insurers. Earlier this month, Gov. Tom Corbett announced his plan to accept federal funding to launch Healthy Pennsylvania, which will extend health insurance coverage to about 520,000 additional low-income, currently uninsured residents through the private insurance market. HHS has said it needs more detailed information before approving the plan.

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