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March 2013 Policy Study, Number 13-3


Just Say NO – and Keep Saying NO – to Federal Health Care Exchanges and Medicaid Expansion


The Arkansas Proposal



Interestingly, what is being called the “Arkansas” proposal may be the most beneficial for state governments. In this Medicaid expansion design, childless adults who make above 100 percent of the FPL are declined Medicaid coverage by the state. This forces them to go to the health exchanges, where they are eligible for the federal insurance subsidy for those making between 100 and 400 percent of the FPL. The amount of the federal subsidy for those at less than 100 percent of the FPL is estimated to be about $9,000 by 2022, while Medicaid is valued at only $7,000.[37] Though the money still comes from taxpayers and businesses, the federal government is responsible, not the state government.


With current and increasing restrictions by the providers on accepting Medicaid patients, and the limits of reimbursement for procedures under Medicaid, it is anticipated that these people will have better insurance, and hopefully better health care, in the long run by using insurance purchased through the exchanges.


Additionally, Arkansas Governor Mike Beebe is proposing an outcomes-based provider payment system, versus the current fee-for-service model. As Julie Munsel, Director of Communications for the Arkansas Department of Human Services said recently, the state analysis shows that as much as 30 percent of the Medicaid costs are for potentially unnecessary tests and treatments, providing little or no impact on patient outcomes.[38]




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