LITTLE ROCK, Ark. (AP) — Arkansas’ plan to use federal money to buy private insurance for low-income residents won final approval from state lawmakers Wednesday, endorsing a model that several other states are viewing as a possible alternative to expanding Medicaid.
The Republican-controlled Legislature narrowly reached the three-fourths majority needed to pass the proposal, which was a compromise reached between leading GOP lawmakers and Democratic Gov. Mike Beebe.
Under the proposal, Arkansas would accept the money intended for Medicaid expansion under the federal Patient Protection and Affordable Care Act (PPACA), but instead use it to buy private insurance for about 250,000 eligible low-income residents. Those individuals who earn up to 138 percent of the poverty line — or $15,415 per year — would purchase subsidized private insurance through the state’s insurance exchange.
Subsidizing the purchase of private insurance for low-income residents as opposed to adding them to the state’s Medicaid rolls was viewed by Republican backers of the plan as the most palatable response to PPACA — a law many GOP lawmakers campaigned against last fall as they won control of the state Legislature for the first time since Reconstruction.
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“It’s taking something that most Arkansans would never have approved and making it better,” Beebe told reporters Wednesday. “And making it fit for Arkansas.”
The proposal attracted the support of all Democrats and more than half of Republican lawmakers, who pitched the “private option” plan to their caucus as a conservative reform of health care.
“We wanted to have a program that let the markets control the market as much as possible, not the government controlling the markets, and this is the result of those conservative principles,” said Sen. Jonathan Dismang, one of the plan’s key Republican sponsors.
But some conservatives — including the House GOP leader — opposed the proposal, saying they didn’t want to increase government spending on what they believe is a broken program. They said they’re also concerned about the cost to the state after the federal government’s full funding of the private insurance subsidies begins to scale back towards 90 percent after the first three years.
Implementation of Arkansas’ approach to using federal Medicaid dollars hinges on approval from federal officials. U.S. Health and Human Services Secretary Kathleen Sebelius has endorsed the concept of the plan but has stopped short of green-lighting the specific proposal.