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A new path to Medicaid expansion

By Jay MacDonald ·
Tuesday, October 15, 2013
Posted: 6 am ET

While the nation was preoccupied with the simultaneous debut of the Obamacare state health marketplaces and a self-inflicted partial government shutdown, a quiet little ruling out of Arkansas could spell hope for millions of low-income Americans in need of health care.

For the first time, the Centers for Medicare and Medicaid Services approved a state's request to use federal Medicaid expansion money to purchase private health insurance for low-income Arkansas residents without actually expanding its Medicaid program.

You may recall that the 2012 U.S. Supreme Court ruling on Obamacare gave states the option to ignore the Medicaid expansion mandate of the Affordable Care Act. Despite the government's attractive 100-percent introductory funding offer in the initial years, many Republican-controlled states opted not to expand for fear that it could deplete state Medicaid reserves down the road.

To date, 20 states, most of them controlled by Democrats, have expanded their Medicaid programs, while 15 states, most of them in Republican control, have flat-out rejected the offer. Seven other states, most of them in Republican or divided control, are still leaning toward non-expansion.

But four other states – Indiana, Iowa, Oklahoma and Pennsylvania – are considering alternative programs similar to the Arkansas model.

The Arkansas plan is that rarest of birds in the health reform aviary, a red/blue-billed compromise, forged by the state's Democratic Gov. Mike Beebe and his Republican-controlled legislature.

Thanks to the Arkansas compromise, an estimated 250,000 residents who earn up to 138 percent of the federal poverty level, or $15,415 per year, will be able to purchase health insurance on the state's new health exchange with the help of what would have been Medicaid expansion funds.

What makes the developments in divided Little Rock so encouraging is that the other states eyeing their model are predominantly red in hue, meaning they may move swiftly toward approval of their own "private option" without undue fencing over the fine print.

No political compromise these days should pass uncelebrated. And no American should be denied health care because of their income, regardless of who's in office.

Follow me on Twitter: @omnisaurus

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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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1 Comment
October 15, 2013 at 3:47 pm

That would be great here in Fla however, we have Rick Scott and some how I don't think this will flight. It would be good because I of course fall once again through the cracks