LITTLE ROCK, Ark. — Arkansas became the first state on Friday to win federal approval to use Medicaid funding to purchase private insurance for thousands of low-income residents under the federal health care law, clearing the way for a model that several other states are eyeing.
The Centers for Medicare and Medicaid Services approved the state's request to implement the "private option" plan as an alternative to expanding Medicaid's enrollment. Arkansas formally submitted its request to the federal government last month after the plan was approved in April by the state's Republican-controlled Legislature and Democratic governor.
Supporters of the president's health care overhaul have pointed to Arkansas as an example of a Republican-trending state that is still implementing a key part of the 2010 law, and several states have expressed interest in a similar approach. Pennsylvania Gov. Tom Corbett, a Republican, this month submitted to the federal government a proposal inspired by Arkansas' plan.
Under the private-option law approved in Arkansas, the state will accept the federal money allocated for Medicaid expansion under the federal health care overhaul but will use it to buy private insurance for about 250,000 eligible low-income residents. Those individuals who earn up to 138 percent of the poverty line — or $15,415 per year — would purchase subsidized private insurance through the state's insurance exchange.
Open enrollment for the exchange begins Tuesday, with coverage to begin Jan. 1.
"Our actions have drawn positive attention from across the country, and now we will focus on getting this insurance to the Arkansans who need it to lead healthier, more productive lives," Arkansas Gov. Mike Beebe said in a statement.