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Arkansas Medicaid plan should make Oklahoma lawmakers wary

by The Oklahoman Editorial Board Published: January 29, 2014

OKLAHOMA didn't expand Medicaid under Obamacare, but Arkansas officials did — with a twist. Arkansas got permission from Washington to use expansion funds to help new enrollees buy private insurance through Obamacare exchanges.

Supporters argued the system would hold down costs through market forces. Some Oklahoma lawmakers have called for duplicating it here. But a new report shows the Arkansas plan falls short of its boosters' claims.

In “The Empty Promises of Arkansas' Medicaid Private Option,” Jonathan Ingram, director of research for the Foundation for Government Accountability, said supporters believed the plan would encourage greater personal responsibility through cost-sharing requirements. Instead, Ingram notes that under Arkansas' agreement with the federal government, “Private Option enrollees will pay no part of their premiums.”

Although the insurance plans purchased do have deductibles, “the Medicaid program pays those deductible as wraparound coverage,” while individual co-pays “must comply with federal cost-sharing requirements for all Medicaid patients.” Under federal guidelines, those co-pays can be as little as a few dollars — not enough to deter overconsumption of medical resources by recipients who consider them essentially free.

Federal caps on total cost-sharing are so stringent the Urban Institute estimated “roughly 77 percent of the Private Option enrollees will have absolutely no cost-sharing,” Ingram notes. As a result, he says “enrollees will have no incentive to choose lower-cost options” when selecting an insurance plan on an Obamacare exchange, “particularly given the fact that many plans reduce provider networks in order to bring premiums down.”

The Arkansas plan also assumed the expansion population would be relatively healthy, but Ingram notes that group actually has a much higher rate of self-reported health problems. (Similarly, research in Oklahoma found potential Medicaid expansion enrollees had higher rates of smoking, heavy drinking, obesity, serious mental illness, serious psychological distress and substance use disorders than the current Medicaid population.)

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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