Arkansas Governor Mike Beebe has been given federal permission to explore a quasi-voucher-based Medicaid expansion, with beneficiaries buying subsidized private health plans through the state-federal partnership insurance exchange.
Perhaps the most unconventional Medicaid proposal tentatively approved by the Department of Health and Human Services so far, Beebe's plan would have to be approved by the legislature and still needs to be formally developed.
Beebe, a Democrat and former state senator and attorney general, met with HHS secretary Kathleen Sebelius in late February and has yet to publish details of his plans, only outlining his ideas in public comments
At a press conference after the meeting with Sebelius, Beebe said the plan would transfer Arkansans making up to 138 percent of the federal poverty level (about $32,000 for a four-member family) into the health insurance exchange. The state and federal governments would pay for all of the premiums, with some members subject to co-pays, and coverage would be expanded to about 200,000 Arkansans eligible for Medicaid coverage under the Affordable Care Act.
Beebe is now corralling state lawmakers around the idea, and it's already garnering bipartisan support.
"In general I think there would be more support for private-pay plans than under the Medicaid coverage," Arkansas Republican House Speaker Davy Carter said at a press conference with Beebe, as the Arkansas Times reported. "That's something that my colleagues were very much in favor of."
Arkansas Department of Human Services Director John Selig told the Arkansas Times he's also on board. "In a lot of ways this simplifies what happens on the exchange," he said. "The most difficult part of the exchange was going to be people going from Medicaid to private insurance, back and forth as they went up and down [the] income line. Now, you just keep [the private insurance company] as you go up or down."
Although other Arkansas lawmakers, especially Republican leaders, wanted to have the federal government run the state's exchange, Beebe hopes to transition the partnership exchange to state control by 2015.
The "flexibility that we're talking about here and the ability to be able to encourage certain behavior or discourage other behavior in the form of co-pays...could be seriously effected by us losing control of the exchange," Beebe said.
Like Florida Republican Governor Rick Scott, Beebe said he wants a sunset provision in the Medicaid expansion legislation, requiring the legislature to re-approve the plan in three years, after the full federal funding for the expansion expires.
Beebe's Medicaid-HIX proposal is part of a broader Medicaid reform Arkansas is seeking. With a federal waiver and a $42 million federal grant, Arkansas is transitioning its Medicaid payment system to a performance-based shared savings and medical home model, with private payers in the state being encouraged to adopt similar models.