The Medicaid “private option” pioneered by Arkansas is speading.  More states, most recently Montana, are expanding Medicaid with this model. Now, Arkansas is considering the future of its program. The “private option” is attactive to Red State governors who oppose the Affordable Care Act.

One idea, writes Rachel Dolan in a HealthAffairs blog entry, is to  use  “1332 waivers” to expand the private option, “where Medicaid provides premium support for certain enrollees to purchase commercial insurance on the marketplace, to cover all or most of current enrollees. Right now the program is limited to the Medicaid ‘expansion’ population: adults without children. The main selling point for the ‘private option for all’ approach appears to be its palatability to red state governors, a way to expand insurance coverage where they otherwise might not.”

“In any case, adding a population of high needs individuals from traditional Medicaid—rather than healthier expansion beneficiaries as Arkansas did—might offset some or all of marketplace cost savings, but that will depend on the state and the particular insurance market. The key is that commercial coverage for high needs/disabled people will be expensive and could increase what states are on hook for in Medicaid dollars.”

“{I}t’s  hard to see how states will see a good deal in any way other than politically in expanding the Medicaid private option to the wider program population.”