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Arkansas Democratic Gov. Mike Beebe wanted to expand Medicaid in his state under Obamacare, to provide health care coverage to thousands of low-income residents who don't qualify for existing Medicaid and don't have enough income to get insurance on the new exchange. He had to convince his Republican legislature, however, that it was a good idea. There was only one way they'd accept it: with a waiver from the federal government that would allow the state to use the Medicaid expansion money to purchase private coverage for those people. On Friday, he got that waiver.
"[The Center for Medicaid and Medicare Services] is pleased to approve Arkansas’s Medicaid 1115 Waiver application," Medicare spokeswoman Emma Sandoe said in a statement. "Arkansas and CMS worked together to find flexibilities that gave the state the tools to build a program that worked for them and their residents. We appreciate the collaboration with Arkansas throughout the process and applaud their commitment to providing Arkansans with access to high-quality health coverage."

There are about 200,000 Arkansans who qualify for the Medicaid expansion. Instead of having them enroll in the public program, like other states will do, Arkansas will send them to their new health insurance marketplace to buy individual plans. When they get to the point of purchase, the Medicaid agency will foot the tab for their health insurance coverage.

Iowa has a similar waiver pending with the CMS. Now that Arkansas' has been approved, some of the undecided states, or even the states that have already rejected it, could pursue these same waivers. Privatizing Medicaid, directing public funds to private insurers is obviously a mixed bag. Subsidizing insurance companies so directly, even beyond what the tax credits for insurance premiums on exchange plans, is not great precedent. But, and this is a pretty significant but, hundreds of thousands more people could get coverage if more states pursue this kind of waiver.

Originally posted to Joan McCarter on Fri Sep 27, 2013 at 01:26 PM PDT.

Also republished by Daily Kos.

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