Medicaid Alert: Arkansas Medicaid Going Private? Others To Follow? Should NC?

On September 27, 2013, the Centers for Medicare and Medicaid (CMS) approved Arkansas’ request to begin a Private Option demonstration.  Arkansas is the first state to receive approval for a “private option” as an alternative to Medicaid expansion.

Remember my “A Modest Proposal?”  Providing Medicaid recipients with private insurance….

Basically, Arkansas will accept federal money for Medicaid expansion, but instead of expanding Medicaid, Arkansas will purchase private insurance for these “newly eligible” Medicaid recipients, adults who make $15,280 or less.  Those individuals who earn up to 138 percent of the poverty line — or $15,415 per year — would purchase subsidized private insurance through the state’s insurance exchange.  From my understanding, the federal funds will cover the newly eligible recipients’ premiums and any co-pays above the co-pays set by statute.

Coverage is to begin January 2014, although enrollment opened today.

Arkansas estimates that 225,000 individuals will be eligible for the demonstration project.  Iowa has submitted a similar request for a “private option” program.  CMS has not yet ruled on Iowa’s request.  Likewise, Pennsylvania Governor Corbett submitted a request to CMS based of the Arkansas model.

It seems that some Republican governors are thinking outside the box to provide health care coverage for additional Medicaid recipients without merely providing the newly eligible simply a Medicaid card.  Because, remember, receiving health care is completely different from receiving health insurance.  Having insurance does not always allow Medicaid recipients to receive health care.  Obviously, many provider refuse to accept Medicaid.  But these newly eligible Medicaid recipients will have health care…with private insurance…just like I have…or you have….

And I ask you…What is more important….handing a person a Medicaid card?…Or providing that person with quality health care?

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on October 1, 2013, in Affordable Care Act, CMS, CMS Proposal, DHHS, Division of Medical Assistance, Health Care Providers and Services, Iowa, Legislation, Medicaid, Medicaid Eligibility, Medicaid Expansion, Medicaid Recipients, Medicaid Recipients Under 21, Medicaid Reform, Medicaid Services, NC, North Carolina, Obamacare and tagged , , , , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. Since you know more than me on this matter, please correct me if I am wrong. In my mind, that would be fantastic. It would nearly eliminate the administrative cost that is killing the current system. The complete administrative burden would already be absorbed by the private insurance companies. Thus, on paper, saving countless dollars that would otherwise be wastefully spent/

  2. palladiumsubbie

    I absolutely LOVE this idea. The low rate of reimbursement makes many providers reluctant to accept new medicaid patients, and as a result they end up going to the ER to treat chronic conditions that become acute, which increases the net cost of the care being provided. Annoyingly, this drives down the administrative cost of adjusting claims as a percentage of the claim value, since the average claim value is much higher than would be typical. A claim adjustment expense of $20.00 is only 4% of an ER visit that costs $500.00, but it is 20% of a PCP visit that costs $100.00. This creates an appearance of cost savings in Medicaid that is significantly inaccurate.

  3. Wastemytimeplease

    I don’t like it. By selling the administration to a private, for-profit company, it will actually increase administrative costs. The health insurance industry in America has a stinking, rotten record of denying coverage, failing to pay claims, and other such near-criminal acts to ensure a healthy profit and bonuses to their executives.

    Given that CMS is able to operate Medicare on an approximately 3% administrative burden (Obamacare only requires health insurers to spend at least 80% on claims, thus allows up to 20% in administrative burden), I cannot see how privatizing Medicaid will save money AND benefit the recipients. The two events will prove to be mutually exclusive.

    Look at what’s going on in the private, for-profit prison industry!

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