The pitch: The program would mean better health care for a quarter-million Arkansans lacking coverage. 45 The private option would be funded
for the first several years entirely with federal money, bringing relatively
high-paying health care jobs into the state, with ripple effects benefiting the
whole economy.46 Cost savings would flow from more widespread
preventive care and fewer hospitalizations and emergency room visits.
Hospitals would be paid for emergency care, rather than having to absorb
the costs of emergency room care for the uninsured who cannot be denied
treatment under federal law.47 Moreover, the broadened coverage for poorer
Arkansans would be subsidized by the taxpayers of states that rejected the
Medicaid expansion – such as the arrogant Texans to the southwest.
(Disparaging Texas is always politically popular in Arkansas.) Finally,
there is the matter of state pride. When the program was first submitted to
the federal government, commentators trumpeted it as “the Arkansas game-changer.”48 Not often can Arkansas claim to be a national leader in policy
innovation. The “private option” is one such instance.
The concept: Marketplace premium assistance.49 Medically fragile
adults short of disability and newly eligible for the Affordable Care Act’s
Medicaid expansion must enroll in the traditional Medicaid program. All
other newly eligible adults with incomes less than Medicaid limits50 must
45. Phil Galewitz, Arkansas’ Medicaid Experiment, Key To Obamacare Expansion, On
Ropes, KAISER HEALTH NEWS, Feb. 10, 2014, http://kaiserhealthnews.org/news/arkansas-medicaid-expansion-experiment/.
46. See id.
47. Emergency Medical Treatment and Active Labor Act, 42 U.S. C. § 1395dd (2012).
48. See, e.g., John Reichard, “Arkansas Solution” Could Be Game-Changer for Health
Law, Top Medicaid Lobbyist Says, WASH. HEALTH POL’Y WK. IN REV., April 5, 2013,
available at http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-
omnicid=16 (last visited Feb. 15, 2015); Sara Rosenbaum & Carla Hurt, How States Are
Expanding Medicaid to Low-Income Adults Through Section 1115 Waiver Demonstrations,
THE COMMONWEALTH FUND, 3-6 (2014), available at http://www.commonwealthfund.org/
Fund issue brief comparing Arkansas’s program with those of states following Arkansas’s
lead); Watson, What Is at Stake in Arkansas?, supra note 7, at 471.
49. As Sidney Watson and others have pointed out, premium assistance waivers have
existed for some time in the Medicaid program. States have long been allowed to use
Medicaid funds to subsidize the purchase of employer-sponsored insurance. See, e.g.,
Watson, What Is at Stake in Arkansas?, supra note 7, at 483-486. What Arkansas has done,
as the first state to obtain a Section 1115 premium assistance waiver for a Medicaid
expansion under the Affordable Care Act, is to allow the use of federal Medicaid funds for
the purchase of individual insurance on the private market, employing the “private option”
rhetoric to take advantage of federal funding of coverage expansion in a hostile political
50. Nondisabled childless adults and parents of children earning up to 138% of the
Federal Poverty Level are newly qualified for coverage. See Allison, supra note 7, at 1090-
94 (explaining the program).