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Democratic Governor of Arkansas Mike Beebe took an alternative approach to expanding Medicaid in Arkansas that received not only the backing of the states republican led house and senate, but also received the approval of the department of Health and Human Services.  Unlike the battles brewing through many of the states where Governors want to expand Medicaid, but must go through a republican ran legislature; Governor Mike Beebe achieved his goals with minimal fanfare.

Beebe’s approach is to use the federal dollars the state will receive as part of the Medicaid Expansion provision of the Affordable Care Act and provide premium assistance. The state will let individuals go to the health insurance exchange and purchase private insurance coverage and provide them with assistance to make the purchase. The assistance will be available for everyone whose gross annual income is below 133% of the federal poverty level.  This is the first such plan to be presented and approved. This allows the state to reduced the number of individuals that are uninsured without increasing the number of residents enrolled in the states Medicaid program. To most supporters it feels more like helping than providing a handout.

This program is more inline with a premium assistance program, rather than a Medicaid Expansion program. The individuals that are eligible will receive assistance to purchase their premium similar to the subsidies million of middle class individuals will receive on the exchange. On an average most premium assistance program have about 30,000 individuals maximum enrolled. Arkansas in 2014 will be planning to add around 230,000 individuals, around eight times the amount of what the program is used to.

At this point there is a possibility Florida will also follow that approach. The state senate earlier this week rejected the Medicaid Expansion option stating they are looking for alternative solutions. This alternative solution that Arkansas is exercising is something that is available to all the states.  According to the FAQ letter release by the HHS in December 2012, it states

“Under Medicaid and CHIP statutory options, states can use federal and state Medicaid and CHIP funds to deliver Medicaid and CHIP coverage through the purchase of private health insurance,”

While initially this is good news, there is one draw back. There are certain standards and prices set in place for Medicaid payout to providers, and having these individuals purchase private insurance just like everyone else will mean the premium will be more expensive and costly. According to the congressional budget office, the difference stems to be around $3,000.  Many individuals have stated its paying the more money to provide the same service, and if the Governor wants Medicaid Expansion he should say so, and the state should approve it as so instead of paying a higher cost to achieve the same result.

When the Washington Posts asked why are they buying the more expensive health plans, ultimately costing the state, and federal government more funds, the response received was. “These policies are going to be pricier than strictly through Medicaid expansion, but this is the kind of option that our legislature asked us to look for. Our primary hope is that, we can do this, and this is one way to pursue it.”

While the end result means the Medicaid Expansion/Premium Assistance program will continue in Arkansas, there is still no plan in place of what will happen when the state has to cover an estimated 70,0000 million in additional premium due to choosing a premium assistance program versus Medicaid expansion in 2017.

Leave a replyComments (1)
  1. Ajay Jain March 31, 2013 at 9:00 pm

    Hello Friends,

    Governor Rick Perry millions of under-privileged poor Texans who do not have any Health Coverage will be covered under The Affordable Care ACT (ACA) expansion of MEDICAID!

    My Physician wife's practice is partly dependent on MEDICAID and its viability. Please allow the expansion of MEDICAID to occur in Texas under The Affordable Care ACT.

    Believe it or not IT IS A FACT: If states choose to expand Medicaid, the federal government will cover 100 percent of the costs from 2014 to 2016. The feds' contribution will begin to decrease in 2017, but will never be less than 90 percent, under the ACA.

    That's why I created a petition to Governor Rick Perry, Texas Governor, The Texas State House, The Texas State Senate, and Governor Rick Perry, which says:

    "Please ACCEPT the FREE EXPANSION of MEDICAID under The Affordable Care ACT."

    Will you sign this petition? Click here:


    Ajay Jain
    Twitter Handle ajain31.
    Mobile: 214-207-9781


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