The feds today approved a waiver of federal Medicaid rules to allow Arkansas to pursue the so-called “private option” plan for Medicaid expansion. The waiver covers three years, after which the program will be evaluated, with the potential for renewal. Here is the sent to the Arkansas Department of Human Services this morning. Secretary Kathleen Sebelius of the federal Health and Human Services also called Gov. Mike Beebe this morning to tell him the news. 

The “private option” expands health coverage to more than 200,000 people below 139 percent of the federal poverty level (around $16,000 for an individual or $32,700 for a family of four). Rather than covering these low-income Arkansans via the traditional Medicaid program, the state will use Medicaid funds to pay for the full premiums of private health insurance plans that beneficiaries select on the Health Insurance Marketplace.  The federal government will pay for 100 percent of the program during the three years of the waiver demonstration period. If it continued beyond three years, the state would start chipping in, eventually up to 10 percent in 2020 and beyond. 

I was in Conway filming “Arkansas Week” when the news broke, so I’m playing catch-up. Updates to come. Here is a statement from Emma Sandoe, spokeswoman at the CMS

CMS is pleased to approve Arkansas’s Medicaid 1115 Waiver application. Arkansas and CMS worked together to find flexibilities that gave the state the tools to build a program that worked for them and their residents. We appreciate the collaboration with Arkansas throughout the process and applaud their commitment to providing Arkansans with access to high, quality health coverage.

Beebe’s statement: 

Arkansas came up with its own plan to expand Medicaid using the private-insurance market, and Secretary Sebelius and her team worked to ensure that we had the flexibility to make that plan a reality,” Governor Beebe said. “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. Hopefully, this bipartisan, intergovernmental achievement can be an example for Congress as the government shutdown looms.

Statement from DHS: 

It’s a big day for Arkansas. It marks the end of a very long and intense process following Governor Beebe’s signing of the Health Care Independence Act in April. There is, of course, much more work to do as we move into implementation and the next phases of the program. But today we’re taking the time to celebrate the approval of this unique and innovative program that will provide much-needed health care for hundreds of thousands of Arkansans. We would not be where we are today without the extraordinary efforts of our staff and the team in Washington who helped us through this process. They did a tremendous amount of work in a very short time to make this happen. 

The explain the nuts and bolts of what CMS expects from the state. For a closer look at the budget neutrality requirements the feds imposed on the state — which set limits on spending, with the state on the hook if costs run above the targets, see this post.

Joan Alker of the Georgetown University Health Policy Institute, offers some preliminary thoughts here