Natural State News

Arkansas lawmakers are currently proposing that the state’s Medicaid private option be amended after federal courts blocked previous work requirements. Some experts argue that the private option costs taxpayers more and should be repealed.

Under the new proposal, using Medicaid funds to place recipients on private health insurance coverage will continue, CBS 5 News reports. However, individuals not working or going to school could potentially be moved to the standard fee-for-service Medicaid program.

These changes are intended to encourage recipients to work and were proposed after President Joe Biden's administration blocked work requirements in Arkansas and several other states.

According to the Foundation for Government Accountability (FGA), the state's Medicaid private option is a costly failure and should be repealed.

Passed in 2013, the Arkansas private option was intended to be a market-oriented alternative to the Affordable Care Act (Obamacare). 

Lawmakers promised that the private option would not expand Medicaid eligibility, be cheaper than a traditional Medicaid expansion and encourage individuals to work.

The FGA argued in 2014 that the private option failed to deliver on all these promises.

The private option was supposed to reduce the number of those enrolled in Medicaid by moving them to a private coverage, but the change has been meaningless, FGA argued, as those recipients currently receive their benefits through qualified Obamacare health exchange plans, instead. Private option enrollees still receive all Medicaid benefits that are delivered through the Medicaid program and paid for with Medicaid funding.

Lawmakers said that the private option would be a cost effective solution cheaper than a Medicaid expansion and would even be cheaper than the then current system, but those promises were made on faulty assumptions, FGA said.

Lawmakers used consultants who made the assumption predicting that expanding Medicaid eligibility would actually cause fewer people to seek Medicaid coverage, but instead the opposite happened and more people signed up for Medicaid. On top of those added numbers, those enrolled in the private option have have been shown to cost the state significantly more than those enrolled through a traditional Medicaid expansion.

Private option legislation was supposed to encourage patients to work through cost-sharing for enrollees, but according to the state’s agreement with the federal government, private option enrollees will pay no part of their premiums, while any co-pays actually imposed in the private option must comply with federal cost-sharing requirements for all Medicaid patients. 

FGA concluded in 2014 that Arkansas lawmakers should repeal and defund the the private option and make efforts to seek true Medicaid reform.