Sept. 30—Arkansas received federal approval for its groundbreaking approach to expanding Medicaid coverage.

Arkansas Gov. Mike Beebe (D) said he received the approval of the state’s Medicaid waiver request in a Sept. 27 call from U.S. Department of Health and Human Services Secretary Kathleen Sebelius.

Dubbed the Arkansas Private Option by supporters, the state’s proposal was a variation on the Affordable Care Act’s expansion of Medicaid eligibility to all residents with income of up 138 percent of the federal poverty level. Instead, Arkansas proposed providing coverage to the same population of more than 200,000 residents through private health plans expected in the health insurance marketplace, or exchange. The state proposed to use the federal Medicaid expansion funding to cover much of the cost of the private plans while restricting the out-of-pocket expenses near Medicaid levels.

“Arkansas came up with its own plan to expand Medicaid using the private-insurance market, and Secretary Sebelius and her team worked to ensure that we had the flexibility to make that plan a reality,” Beebe said in a release. “Our actions have drawn positive attention from across the country, and now we will focus on getting this insurance to the Arkansans who need it to lead healthier, more productive lives.”

The state was the first of several that have since proposed using private exchange plans—at least some of which are also Medicaid managed care plans—to sell policies to cover an expanded Medicaid population. Such approaches have been able to bridge some of the Republican opposition to the Medicaid expansion because Republicans generally view private plans as more efficient and cost-effective for the taxpayers.

Arkansas is one of 23 states—plus the District of Columbia—that have approved Medicaid expansions, and some others are considering action on it later this year.

Both the Medicaid expansion and coverage offered through state health insurance marketplaces are expected to reduce the nation’s 56 million uninsured by 25 million over the next 10 years, according to the nonpartisan Congressional Budget Office.

Publication Date: Monday, September 30, 2013