When the Obama Administration and Congress originally envisioned the Affordable Care Act (ACA), also known as ObamaCare, they intended for every state to expand Medicaid eligibility guidelines to include Americans who earn up to 138% of the federal poverty level. However, the Supreme Court ruled that states could not be required to make this change, and that the choice would be left up to each individual state.
Many states, especially those with leadership that opposes the ACA, declined to comply. They did not want to take on the administrative and financial costs of this expansion.
A few states, however, have proposed alternate Medicaid expansion plans. The federal government has shown a great deal of openness to these plans, allowing federal money to be used in a variety of ways to assist lower-income Americans with obtaining health insurance.
Arkansas’ Alternative Medicaid Plan
Arkansas was the first state to receive federal approval for an alternative Medicaid plan. The Arkansas program, called the “private option,” uses federal funding to enroll lower-income Arkansans in the same private plans that others in the Marketplace would have access to.
Traditional Medicaid typically consists of either a state-operated program or a private managed care health insurance plan developed exclusively for Medicaid beneficiaries. This results in a lower number of doctors who are willing to accept Medicaid and often means that Medicaid recipients have difficulty finding care. With the private option, doctors will receive the payment that the Marketplace private plan would normally pay, allowing recipients a much wider network of doctors and medical facilities. The belief is that private plans will use the Medicaid funds more efficiently than the government program.
Although the private option was more palatable to Arkansas lawmakers than expanding traditional Medicaid, it still required additional state funding and that set the stage for a battle in the state’s legislature. On March 4th, 2014, Arkansas legislature passed the funding bill after several attempts. This vote renewed the program and continued funding for it. This kept the compromise alive and benefitted nearly 200,000 lower-income Arkansans.
Pennsylvania’s Alternative to Medicaid
Another state that is trying a different approach to Medicaid expansion is Pennsylvania. Governor Tom Corbett has touted his new Healthy Pennsylvania plan as a means to increase access to health care for over 500,000 Pennsylvania residents. The plan would allow the state to accept federal Medicaid expansion funds, but deploy them in a different way.
While Gov. Corbett’s plan includes using funds to allow lower-income citizens to purchase private insurance on the federal Marketplace, there are some key differences between his plan and the federally-approved plan in Arkansas. Governor Corbett hopes to change some current Medicaid benefits and also include a job-training component in the program.
Republicans in Pennsylvania are concerned about the cost of the alternative expansion program, and Democrats say it isn’t moving fast enough. However, the fact that there is still cost-sharing, as is the case with more traditional private plans, allows lower-income Pennsylvanians to be personally invested in their care.
While the Pennsylvania plan has not yet been federally approved, the government has shown a willingness to work with outside-the-box Medicaid ideas. With this in mind, it’s possible that the Healthy Pennsylvania plan will soon be in operation. If the plan is approved by the federal government, coverage for the uninsured would begin on January 1, 2015.
Many states, particularly those with conservative leadership, are concerned about the costs of expanding existing entitlement programs. Some are responding by rejecting Medicaid expansion outright, but a few states are trying to make compromises that will help lower-income residents without raising state costs dramatically. If these experiments succeed, other hesitant states may be willing to implement alternative plans, benefitting millions of lower-income Americans across the country.