Arkansas still needs federal approval to proceed with the "private option" for Medicaid expansion, approved by the legislature last April. The plan would offer coverage to low-income Arkansans by paying for the full price of premiums for private health insurance on the exchange, rather than using the traditional Medicaid program. Today the Arkansas Department of Human Services released a draft of the waiver request to go forward with the plan.
Updates to come; based on a quick read there are no surprises. The waiver request articulates some of the goals of the "private option," including an increase in access, improved health outcomes, a reduction in interruption of coverage for people whose incomes change ("churn"), and reduced premium prices on the exchange.
The big one: the state is supposed to prove that this approach will be comparable in cost to traditional Medicaid. The waiver is dependent on demonstrating that cost comparability. DHS has predicted that not only will the "private option" be no more expensive than traditional Medicaid expansion, it will be significantly cheaper, a theory that remains controversial.
Here's the hypothesis put forward by DHS in the waiver:
Over the life of the demonstration, the cost for covering Private Option beneficiaries will be comparable to what the costs would have been for covering the same expansion group in Arkansas Medicaid fee-for-service, assuming adjustments to fee-for-service reimbursement to achieve access in the fee-for-service model.
And what will be their evaluation approach to determine the cost comparability question? Unlike all their other hypotheses, which articulate clear measurement mechanisms, this one is "TBD."