My View of the Arkansas Medicaid Waiver

The decisions of the Obama administration to allow Arkansas to let its Medicaid enrollees enter the new health insurance exchange and obtain private insurance has provoked quite a few comments in the blogosphere. Here’s the latest from Austin Frakt and Sarah Kliff. Here is the turn down of a similar request from Tennessee.

The problem everyone is having: HHS insists that the costs to the federal government cannot go up. But insurance in the exchange is thought to cost about 50% more than Medicaid costs.

My thought: Two thirds of all Medicaid enrollees are in private plans anyway. So the issue is not public versus private. Solution: Let the Medicaid managed care plans enter the exchanges and compete as alternative private plans. Then give the Medicaid enrollees a subsidy equal to what Medicaid has been previously paying to the managed care plans. If the enrollees sign up for the managed care plans, nothing will have changed. But they will have the opportunity to pay more out of their own pockets and enroll in other plans.

Oops. I think I stumbled on what Arkansas is actually planning to do. See Avik Roy.

Comments (9)

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  1. Kumar says:

    Apparently this is what Arkansas is trying to do, however, it seems that they can’t find anyone in the political sphere of Arkansas who know the exact details as to how to implement these changes.

  2. Patel says:

    This is an interesting post, surely allowing medicaid to enter as alternative private plans introduces some form of competition. We know the health care is America is void of market competition, and so, I say, some form of competition, no matter how small, is welcomed.

  3. Desai says:

    Insurance is part of the health care dilemma, but I haven’t seen much on how the hospitals are going to do their part to bring down cost. I think the Time magazine coverage on medical bills killing us is paints powerful picture on how the hospital industries are messing every thing up and how they function like oligopolies and monopolies.

  4. Sandeep says:

    @ Desai

    I read that report, it states that in many cases insurers are at the mercy of these hospitals who demand higher returns from the insurance companies. Accordingly, hospital are buying up physician practices and then telling insurance companies to meet their demands.

  5. Sadat says:

    Medicaid consumers who are in a private plan probably has better access to care because their plans will pay more to physicians.

  6. Ryan Hall says:

    I think that some form of competition would benefit the state and prove an effective model for other states to follow. If the entire system can’t be overhauled, then at least slowly introduce some competition through private insurers.

  7. Ryan Hall says:

    Insurance is certain a big part of our overall health care crisis. However, as noted by another poster, there are other factors that contribute to this crisis, such as overpriced hospitals.

  8. Gabriel Odom says:

    This won’t work. Unless the states are allowed to increase the copays to modern fee structures (i.e. more than $2 for a ER visit), then the indigent will continue to use very expensive emergency room resources instead of less expensive clinic or office care.

  9. H. James Prince says:

    My ER copay is $50, and my office/clinic copay is $25. Why can’t we use something similar to this?