by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
HHS’ decision in Arkansas may have interesting repercussions:
Arkansas Gov. Mike Beebe’s office says the state has received approval from Health and Human Services to take federal Medicaid expansion money and use it to buy private coverage for low-income residents through the state’s insurance exchange.
Beebe’s idea isn’t partial expansion, which HHS has already said states can’t do if they want the federal funds. But the state would take the federal dollars for Medicaid expansion to provide private coverage through an insurance exchange to hundreds of thousands of residents who earn less than 138 percent of the federal poverty level.
Avik Roy explores the potential free-market implications of that move. With the standard devil’s-in-the-details disclaimer, Roy writes:
Arkansas moves us one step closer to the Swiss model
One option, one that former CBO director Douglas Holtz-Eakin and I wrote about last week, involves raising the Medicare retirement age in order to fund expansion of the exchanges into the Obamacare Medicaid population. This would involve a substantial redirection of resources from wealthy retirees to poor uninsured Americans, which, in the case of health care, would be a good thing. The Swiss have achieved market-based universal coverage with something very similar.
If Obamacare had originally been structured in such a way as to apply the exchanges to Medicare and Medicaid, it could have gained significant bipartisan support. It wasn’t, because Democrats had 60 votes in the Senate, and many of those Democrats are ideologically opposed to a role for private insurers in the health-care system. But Mike Beebe’s deal in Arkansas shows us that bipartisan deals are possible, ones that improve the quality of care that we deliver to the poor, and to everyone else.
It’s something to watch.