Charlie Frago reported this morning (paywall) that DHS has sent a letter to the feds outlining some of the details of the proposed “private option” approach to expanding healthcare coverage in lieu of traditional Medicaid expansion. Frago reports that the letter is an attempt to get an official stamp of approval on the oral agreement reached last month.

You can read a full copy of the 2-page letter, acquired via FOIA request from DHS, after the jump.

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Not much in the way of surprises. This is the framework of the deal that has been reported exhaustively here and elsewhere. The main thing that jumped out at me is that it didn’t explicitly state one important detail: the state will be required by law to offer the same benefits and cost-sharing protections to folks under 100 percent of the federal poverty level as would be available in traditional Medicaid expansion (unless the state got a special waiver on top of this deal). I just spoke with DHS and they confirmed that the state would have exactly the same requirements by law on this front under the new framework. Worth noting since I know that Republican leaders like Sen. David Sanders would love to have even more “flexibility.”

The letter does articulate that cost-sharing “for the low income adults under 138% FPL have not been developed, but could be comparable to cost-sharing requirements in the exchange, where individuals are subject to scaled income-related obligations, e.g., approximately 2-5% of income for the lowest-income participants in the exchange.” Again, this is in line with what we know: folks 100-138 FPL would have equivalent benefits and cost-sharing as that pool on the original exchange (except in this deal premiums would be paid in full by the government).

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A few other notes:

• “The state also intends to develop a proposal for future review that structures benefits in a way that further enhances participants’ ownership in health care purchasing decisions.” Could be interesting. This is a popular idea among both administration officials and Republican lawmakers.

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• “It is Arkansas’ intent through this plan to increase participation and competition in its health insurance
markets, intensifying price pressures and reducing costs for both publicly- and privately-funded health care.” This is a political pitch not a policy proposal. There are reasons to be very, very skeptical that this will be a difference-maker in costs.

• “The costs of increased access for low income Arkansans would be determined directly by market-based interactions with providers.” Yeah. It’s going to cost more!

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• By law, the state is on the hook for wraparound benefits if the private plans don’t cover everything. The letter states that the Arkansas Medicaid program would handle low-income folks with “exceptional needs.”

• The state plans to get qualified health plans on the exchange to participate in the Payment Improvement Initiative. I’ve had Republican lawmakers tell me they think the initiative was a difference maker in getting federal approval for the “private option” in Arkansas. Surgeon General Joe Thompson didn’t go that far but said “it certainly didn’t hurt.”

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Unless HHS gets cold feet, I see no reason they won’t sign off on this, which would be an important step for the legislature to move forward on approval.

Full letter after the jump.

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