White House shows new flexibility on Medicaid expansion options

The White House is encouraging skeptical state officials to expand Medicaid by subsidizing the purchase of private insurance for low-income people, even though that approach might be somewhat more expensive, federal and state officials say.

Ohio and Arkansas are negotiating with the Obama administration over plans to use federal Medicaid money to pay premiums for commercial insurance that will be sold to the public in regulated markets known as insurance exchanges, the New York times reported Thursday.

Republicans in other states, including Florida, Louisiana, Pennsylvania and Texas, have expressed interest in the option since Gov. Mike Beebe of Arkansas, a Democrat, received a green light from Kathleen Sebelius, the federal secretary of health and human services.

Mississippi Gov. Bryant has agreed to talk with hospital executives about possible alternatives but has given no indication he is willing to explore an option such as the one Arkansas is pursuing. Hospital executives concede they have no hope of softening the opposition of Bryant and other Republican legislative leaders to expanding Medicaid as outlined in the Affordable Care Act.

The idea of using “premium assistance” to buy private insurance for new Medicaid beneficiaries is a sharp departure from the 2010 health care law, in which Congress expanded Medicaid to cover the poorest Americans and assumed that people with higher incomes would obtain private coverage through the exchanges.

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