States mull using private insurers to expand Medicaid

The health reform law's Medicaid expansion may be an even bigger boon to insurers as some states, led by Arkansas, are considering expanding the program by using the private insurance market.

The plan is to use federal dollars provided under the reform law to pay private insurance companies to insure the expanded Medicaid population. But the U.S. Department of Health & Human Services must first approve this unique approach to Medicaid expansion, reported The Wall Street Journal.

"We all see this as a complete 90-degree turn toward the right direction," Arkansas GOP House Speaker Davy Carter told the WSJ. "We still have a lot of work to do, but we've intercepted the ball."

In addition to Arkansas, officials in Ohio and Virginia are thinking about using a similar approach. Ohio's Greg Moody, director of the Governor's Office of Health Transformation, said that although they must still sort out details, "we're very confident we can work through those things."

And Virginia Secretary of Health Bill Hazel said an advantage to using the private market to expand Medicaid is that recipients could stay in the same health plan even if they no longer qualify for Medicaid. But he is still concerned about the costs of expanded eligibility altogether, the WSJ noted.

"If Arkansas is allowed to do this, I expect it to spread like wildfire," George Washington University's Sara Rosenbaum told The Washington Post's Wonkblog. She said that Texas and New York also are studying the benefits privatizing Medicaid. "I think that every state is now going to be eying this thing. My own suspicion is it's going to be very popular."

To learn more:
- read the Wall Street Journal article
- see the Washington Post's Wonkblog article

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