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Nebraska lawmakers take note of Arkansas Medicaid plan

Nebraska lawmakers take note of Arkansas Medicaid plan

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LINCOLN — Could the “private option” that brought together Republicans and Democrats in Arkansas offer an alternative to expanding Medicaid in Nebraska?

Some Nebraska lawmakers say the idea is worth checking out.

“I'm very much in support of looking into it,” said State Sen. Beau McCoy of Omaha, a leading opponent of adding more low-income adults to Nebraska's Medicaid program.

During more than 10 hours of debate about expanding Medicaid, he and other opponents brought up the Arkansas plan several times.

Sen. Kathy Campbell of Lincoln, chief sponsor of the Medicaid expansion legislation, is more skeptical about Arkansas' approach.

“We don't know what (the federal government) is going to say 'yes' or 'no' to,” she said.

But she and other expansion supporters said they are willing to talk about options.

Arkansas' plan would use Medicaid funds to buy private health insurance for low-income people, instead of adding them to that state's traditional Medicaid program.

The plan grew out of clashes between Democratic Gov. Mike Beebe and the Republican majority in the Legislature.

Beebe wanted to move ahead with the Medicaid expansion made possible by the federal health care overhaul. GOP lawmakers generally resisted.

But some started looking for a third way. With Beebe's cooperation and the go-ahead from the federal government, they developed what has come to be known as the private option.

“The whole overall goal was to allow the markets to control as much as possible,” said Sen. Jonathan Disbang, the Republican sponsor of the bill that passed earlier this month.

Arkansas officials hope to get the plan up and running by Jan. 1, including winning final approval from the federal government. The plan has received “conceptual approval” from U.S. Health and Human Services Secretary Kathleen Sebelius.

The plan would cover the same 250,000 or so low-income people that traditional Medicaid expansion would have covered.

But it will use federal and state Medicaid dollars to buy those people health policies through the state health insurance exchange. Medicaid funds also will be used to help with co-pays and deductibles.

Although some question how the plan can be financially beneficial, Disbang said, an actuarial study concluded that the private option would save the state $670million over 10 years and would be close to cost-neutral for the federal government.

Some of the savings counted in the study would come from having more users on Arkansas' insurance exchange, thus increasing competition among insurers and health care providers.

Arkansas' innovation has caught the eye of Republicans across the country. Florida, Ohio and Texas are among the states exploring similar paths as policymakers wrestle over the question of expanding Medicaid.

The Affordable Care Act envisioned expanding the state-federal program to cover uninsured people with incomes up to 138 percent of the federal poverty level.

A U.S. Supreme Court ruling in June made the expansion optional for states.

Nebraska Gov. Dave Heineman and Iowa Gov. Terry Branstad, both Republicans, adamantly oppose the expansion.

Heineman has not expressed interest in other options for providing coverage to low-income uninsured Nebraskans.

Branstad is pushing an alternative that he calls the Healthy Iowa Plan, which would cover Iowans who make up to 100 percent of the poverty level, about 89,000 people. It would replace the existing IowaCare program, which offers limited health services to low-income adults and is slated to end Dec. 31.

Nebraska has no similar program.

Branstad said his plan would encourage personal responsibility by requiring participants to pay some costs and by offering them money to adopt healthy behaviors. The plan would require approval from Iowa lawmakers and the federal government. Neither is certain.

Iowa would not be able to get as much federal Medicaid funds for such a program as it could if it expanded traditional Medicaid.

Under the Affordable Care Act, the federal government will pay 100 percent of costs for Medicaid expansion coverage from 2014 through 2016. The federal funding will phase down to 90 percent of those costs by 2020.

A March memo from federal officials made clear that states are welcome to pursue Arkansas-style alternatives to traditional Medicaid.

But it said states must show that their plans are cost-effective, meaning that costs would be comparable to what the federal government would otherwise spend. Participants must be able to get the same health care services as people covered under the Medicaid expansion. That may require buying a special rider or having the state provide some services.

Federal laws also limit the amount of co-pays and deductibles required of participants.

“You've got a lot to figure out to make that work,” said Jennifer Carter of Nebraska Appleseed. “It's not like it could magically happen.”

Arkansas officials believe that they can meet all the requirements and have a program that offers pluses not available under traditional Medicaid.

Those benefits include keeping people on the same coverage when their incomes fluctuate above and below the Medicaid eligibility line and paying providers at the higher, private insurance rates, which could mean better access to care.

Arkansas also plans to build in some innovations aimed at encouraging wellness and better coordination of care.

Disbang said the plan may not work for all states. But he said the Arkansas model demonstrates that flexibility is possible when covering the uninsured.

“I would recommend that other states do what we did: Take a look at their own situation,” he said. “Each one of us is very unique and I wouldn't say there's one way that works for everybody.”

Contact the writer: 402-473-9583, martha.stoddard@owh.com

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