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The hottest idea in healthcare?

March 22, 2013
by Dennis Grantham, Editor-in-Chief
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Public money for private health insurance? This could be the key to success for the Medicaid Expansion

So, what's the hottest idea in healthcare lately?  It's something called "the Arkansas model" for expanding Medicaid.

It's an idea that may well take public-sector healthcare by storm. In a recent announcement, the Department of Health and Human Services lent its support to a proposal from the state of Arkansas that would allow the state to use Medicaid expansion dollars for "premium assistance;" that is, to enable expansion-eligible Medicaid beneficiaries to purchase private health insurance plans on the state's insurance exchange. This is quite a turn, given that the Administration just three years ago gave up on the idea of the "public option" - a single-payer system - in the late stages of the ACA debate. The change in position seems to have been prompted by entrenched conservative opposition to the Medicaid expansion and may well enable onetime expansion critics to claim that they implemented a Medicaid expansion without expanding the size of government.

With this proposed model in the late stage of negotiation between the Centers for Medicare and Medicaid Services (CMS) and the state of Arkansas, and now being widely reported, it seems a foregone conclusion that Arkansas will get the go-ahead. According to the New York Times, Ohio and several other states are waiting in the wings with their own similar proposals. 

Behavioral health advocates and providers, starting with those in Arkansas, certainly have plenty of reservations about whether private coverage can or will provide the breadth of services, the low out-of-pocket costs, and the levels of reimbursement that Medicaid now provides. But what beneficiaries need and providers want isn't really where the debate is now.   

The debate now is about whether the Administration, the federal government, state governments, insurers, and healthcare providers can together get enough political support - and therefore, citizens - on board with the Affordable Care Act's vision of near-universal health insurance coverage to really change the way that the nation purchases, manages, and pays for health care services.  

Given that about half of states have either announced against the Medicaid Expansion or are officially undecided, this shift by the Administration and HHS seems a very shrewd move. For those who are certain that everything government does could be done more efficiently in the private sector, a Medicaid Expansion implemented by way of private, commercial health insurance coverage would indeed be a worthy test, provided that consumer satisfaction and outcomes are monitored as carefully as one assumes that costs will be. And, the approach of teaming with private insurers seems consistent with the spirit of the ACA, which has always seen insurers as part of the solution for managing healthcare quality and costs.



Dennis Grantham

Dennis Grantham


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