In Arkansas, Democratic Governor Mike Beebe has negotiated a new breed of Medicaid expansion with HHS under which the Medicaid-eligible population will get federal money to buy private insurance in the Obamacare marketplaces. David Ramsey explains the reason for the creative arrangement:
“My main objective is to make this legislature as comfortable as I can make them,” [Beebe] said. “With a three fourths vote requirement in both houses, that’s a steep, steep burden….If the majority would prefer to go this way to get this done, I’m happy with that. If they want to go the other way, I live with that as well. The cost to the taxpayer for the first three years in the state of Arkansas is going to be the same.”
Beebe said that for some legislators, subsidizing folks to buy private insurance was preferable to directly covering people through a government program for “philosophical” reasons.
Sarah Kliff looks ahead:
The benefit of this approach seems pretty clear: The Arkansas legislature can say they’re moving Medicaid recipients into private coverage, rather than expanding a cash-strapped entitlement program. But will it sway other states on the fence? There is one possible downside they might want to consider, that this approach will likely be more expensive over time. That’s due to the fact that a private insurance plan tends to be more expensive than Medicaid. The Congressional Budget Office estimates the difference between the two, for an individual, is $3,000.
Kevin Drum thinks it might address an issue with the standard Medicaid expansion:
If you’re at 130 percent of the poverty level this year, you qualify for Medicaid. If you get a raise and go up to 140 percent next year, you no longer qualify and instead have to navigate the exchanges. If your hours are cut back and you fall to 130 percent again the year after that, it’s back to Medicaid.
How big a deal is this? That’s hard to say. But it’s not a made-up issue, and it’s possible that the Arkansas approach could legitimately be better. What’s more, I’m OK with allowing states to experiment within limits. It’s the only way to find out whether or not the exchanges really are more expensive, and whether or not the Medicaid ping-pong really is a serious problem.
The Dish 