Arkansas Puts Unique Spin on Expanded Health-Care Coverage

It's not too surprising that Arkansas' Democratic governor would respond favorably to the Affordable Care Act (ACA), or that the state's Republican-controlled Legislature would voice objections to health-care reform. But what's novel is the way Gov. Mike Beebe handled the situation, coming up with a way to implement a portion of the law in a way that pleases lawmakers on both sides of the aisle.

One of the most politically charged aspects of the ACA has been the Medicaid expansion. Under the law, states have the option to expand access to Medicaid to cover Americans who make 133 percent of the poverty level, which is approximately $31,000 for a family of four. A number of Republican-controlled states, including Florida and Louisiana, have opted out of the Medicaid expansion.

In Arkansas, advocates of the expansion have pointed out how it could help Arkansas' low-income residents. "We've had a large gap of uninsured population between Medicaid and employer-sponsored coverage for a while, equating to roughly a quarter of our adult population being uninsured," says Craig Wilson, director of access to quality health care for the Arkansas Center for Health Improvement.

According to Arkansas Medicaid Director Andy Allison in testimony before Congress, an additional 250,000 people in that state would get coverage through an expanded Medicaid system.

But the Republican-controlled Legislature wasn't convinced, and that could have stopped the expansion in its tracks. So Beebe found a way to package expanded coverage so that it was more palatable to the GOP: Arkansas proposed taking the Medicaid-expansion funds and using them to buy private insurance for people who qualified for Medicaid. The proposal, called the Arkansas Healthcare Independence Act of 2013 and dubbed the "private option," was approved by the U.S. Department of Health and Human Services (HHS) in September.

"Arkansas came up with its own plan to expand Medicaid using the private-insurance market, and Secretary Sebelius and her team worked to ensure that we had the flexibility to make that plan a reality," Beebe said in announcing the federal government's approval. "Our actions have drawn positive attention from across the country, and now we will focus on getting this insurance to the Arkansans who need it to lead healthier, more productive lives."

Help for PLWHA

The private option also has stipulations that could be beneficial to people living with HIV/AIDS and other chronic illnesses. When applying for the private option, Arkansans must fill out a health questionnaire.

"If they have exceptional health-care needs, they're diverted into the traditional Medicaid program, where they can receive some of those wraparound benefits and the coordination of services that you traditionally get with Medicaid," says Wilson. "Folks in the early stages of HIV can go into the private option, and those private plans would have a good set of benefits until the disease progresses to a phase where they have exceptional health-care needs and need that additional coordination of care."

Other states, including Pennsylvania and Ohio, are looking at what Arkansas did and are considering their own variations on a private option. Iowa recently got federal approval for its version of the plan.

Another key aspect of the ACA is the establishment of health insurance marketplaces. Residents of each state gain access to a health insurance exchange, a marketplace where Americans can shop for affordable health insurance. Each state had the option of running its own exchange or partnering with the federal government to set up the exchange. If a state chose the partnership option, the federal government would host the website at Healthcare.gov, but the state would take an active role in managing the plan and helping consumers get signed up. If a state chose not to set up an exchange or work with the federal government, then HHS set up that state's exchange, which is managed entirely through Healthcare.gov. Arkansas chose to partner with the federal government to set up an exchange but has taken steps to convert to a state-controlled exchange by 2015.

With most Southern states refusing to extend health insurance coverage through the Medicaid expansion—or any other method—to a large proportion of their residents and doing little to promote the ACA, Arkansas has thus far managed to buck the trend.

"Hopefully other Southern states can learn from what we've done," Wilson says.

Tamara E. Holmes is a Washington, D.C.-based journalist who writes about health, wealth and personal growth.