Medicaid not only improves health, but also practically eliminates the risk of catastrophic medical expenses from accidents or life-threatening illnesses, so this is good news to low-income Arkansas who would otherwise have been left behind by Obamacare.
Basically, Arkansas won the Chopped challenge of public healthcare problems: Taking a basket of things that totally don’t go together, like marshmallows (government entitlements) and fish heads (Republicans) and making a reasonable appetizer (health insurance for the poor) out of it.
Beebe said the ultimate argument was that the Medicaid expansion would grant an escape hatch to Arkansan small businesses, who would otherwise be on the hook for either offering health insurance to their employees or paying a fine.
And conservative lawmakers were able to score one for private companies, as well.
“We felt getting people off of the government program onto private insurance is better for the state, the providers, and most importantly, for the consumer,” Arkansas house speaker Davy Carter told me. “The private sector has the ability to provide coverage plans structured in a way that encourages the right behavior by the consumer and rewards positive outcomes from the provider.”
Sure, this isn’t the way it was supposed to work, and in some cases the private plans can be skimpier or more expensive than Medicaid. Still, Arkansas’ story is pretty remarkable.
Republican governors in at least two other states have said they’re interested in pursuing a similar strategy, which could help chip away at some of those uninsured, indigent eight million.
Michigan, for example, has also implemented its own version of Medicaid with yet another type of waiver, one that allows the state to require the new Medicaid recipients to pay income-based premiums. Iowa is pursuing a similar tactic. While these models aren’t perfect—it’s still really hard for people with incomes this low to pay for health coverage—it’s better than leaving the uninsured to simply pray for good health, as Carter put it.
Second, this private option comes close to achieving something that even Obamacare opponents seem to want from the insurance market: Greater competition among insurance companies with the goal of driving down rates and improving coverage.
“[Arkansas] saw this as a way of developing a much more competitive private insurance market than they have,” John Holahan, who researches Medicaid at the Urban Institute's Health Policy Center, said. “The market there is dominated by Blue Cross, and this way other plans could come in and compete with Blue Cross.”
Lastly, this is a pretty perfect example of how important the semantics of Obamacare have become to its implementation. Simply substituting a private program for a public one made the Arkansas Medicaid expansion acceptable to that state’s Obamacare opponents, even though it uses the same federal funds. Meanwhile, people still find the “Affordable Care Act” more palatable than “Obamacare.”
The rollout of the Web-based exchange marketplace has been a downright disaster, and the fact that Arkansas will now effectively push more low-income individuals toward these exchanges may not, in the end, be a good thing. But given the Sisyphean IT task that fixing Healthcare.gov appears to be, it’s refreshing that at least in one state, a major ACA provision has moved forward with little more than some basic compromise and message-management.