Policy Documents

The Leaflet - Is Arkansas' Private Option on Life Support?

February 14, 2014

Is Arkansas' Private Option on Life Support?

Since passage of the Patient Protection and Affordable Care Act (PPACA), states have been deciding whether to expand their Medicaid programs. To date, 25 states have decided to expand Medicaid, 21 states have decided not to expand at this time, and four states are currently considering expansion.

In 2013, Arkansas decided to take an unusual approach to Medicaid expansion. Called the “private option,” it expands coverage for newly eligible Medicaid beneficiaries through private insurers. While the plan was promoted as a market-oriented approach, free-market advocates have pointed out this expansion will cause many of the same problems as traditional Medicaid expansion, including massive and irreversible spending increases.
 
Over the past two years Heartland Institute experts, including Senior Fellow Benjamin Domenech, have noted the Arkansas model “is looking less like a game changer and more like a potentially cautionary tale about the vagaries of Medicaid expansion. Arkansas will still be dealing with a Medicaid program where everything is dictated by the federal government, on cost-sharing and everything else. It won’t have any control over the program, and it will push the 100–138 FPL population onto Medicaid instead of the exchanges. And here’s the real kicker: when the waiver expires, based on these extremely optimistic assumptions, HHS has already laid the groundwork for denying waiver renewal.”
 
Several states – including New Hampshire, Pennsylvania, and Utah – are considering adopting plans similar to Arkansas’. But even as these states consider adopting this ill-advised approach, Arkansas itself is considering whether to re-authorize funding for the private option. The state that pioneered this type of plan is considering dismantling it altogether ... and that should be reason enough for other states to be wary of going down a similar path. 

Health Care

In several of the states that have chosen not to expand their Medicaid programs under the Patient Protection and Affordable Care Act (aka Obamacare), lawmakers are offering proposals to expand Medicaid under new schemes designed to improve the flawed program. The most popular of those is the Medicaid “premium assistance” first introduced in Arkansas. In this model, Medicaid funds are provided for those newly eligible for Medicaid to purchase private insurance through the federal insurance exchange. However, Arkansas’ model has several shortcomings.In this Research & Commentary, Matthew Glans argues that instead of expanding a flawed Medicaid model, state lawmakers should instead consider reform options like those piloted in Florida, which reduce costs and offer better care to patients in the existing system. Read More

Budget & Tax 
 
Iowa Senate Majority Leader Mike Gronstal and House Minority Leader Mark Smith have said members of their caucuses will introduce proposals this session to raise the state’s legal minimum wage. One bill would incrementally increase Iowa’s minimum wage over two years, resulting in a minimum hourly pay of $10.10 by the beginning of 2016. In this Research & Commentary, Senior Policy Analyst Matthew Glans examines the negative effects that raising the minimum wage has on individual workers and the economy, and argues that increasing the legal minimum wage is not an effective method of addressing poverty in Iowa. Read more

 
According to the most recent available data (2011), Connecticut’s pension system is the second-most underfunded in the United States, trailing only Illinois, which passed minor reforms in late 2013. Connecticut is in need of major pension reform to address the systemic problems in the state’s pension system and close the funding gap. Matthew Glans contends pension sustainability will require Connecticut to follow the private sector’s lead and switch workers from defined-benefit pension systems to defined-contribution plans like 401ks. Read More

Education
 
In an op-ed for the Washington Examiner, Heartland Research Fellow Joy Pullmann challenges claims that Common Core is “voluntary” and “state-led” by pointing to evidence that the federal government is spending millions of dollars on Common Core promotion. Read More

Energy & Environment
 
Forty-three states and the District of Columbia have had some form of net metering law on the books for decades. However, with the falling price of solar panels leading to a rise in distributed generation, utilities are taking issue with the rates they’re required to pay rooftop solar owners, which could be upwards of 300 percent more than the retail rates they pay conventional power plants. These costs are unfairly passed down to those who don’t own rooftop solar panels, who are more likely to have less income and therefore less capacity to absorb these higher costs. Read More
 
 
Just for Fun:
Zack Hill By John Deering and John Newcombe

 

The February issue of School Reform News reports on the Obama administration’s continued efforts to monitor the state of Louisiana’s voucher program to assess whether the program alters the skin-color ratios of students enrolled in public schools. Gov. Bobby Jindal said the feds could “regulate the program to death.”

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