The Department of Human Services announced today that Medicaid Director Andy Allison — the key state official  behind the implementation and management of the private option — will step down on June 1. I spoke with him by phone just now and he explained why he is leaving and reflected on his tenure in the state, including the past and future of the private option. A lightly edited transcript below: 

Allison’s big-picture take on his tenure: 


I think it’s going to be up to others to write the history of health care here in the state. It will likely take some time to be able to look back with objectivity and really assess what we’ve achieved. I’m extremely proud of the teamwork and what this state, by hook or crook, came together to decide. That is two things: to change the way that we pay for health care and, of course, to make sure that those in need have access to health care. I am fairly confident that I’ll never again have the opportunity to contribute to a mission like that: To see to it that a quarter million low-income adults have access to health care. Regardless of how the demonstration and the experiment turn out – and I’m very optimistic about that — regardless of how that experiment turns out, I will be proud of that for the rest of my life.

On the Payment Improvement Initiative

The payment improvement effort is extraordinarily important to this state’s future and honestly – potentially — to the future of health care in other states as well. The decision that the state made — to pay for the product rather than the parts, to pay for outcomes rather than intermediate goods and services, to really focus the payment on what the patient needs — is fundamental. The progress we’ve made is significant and potentially dramatic, and I’m extremely proud of the role that I’ve played. 

I asked whether he had any concerns about the continued implementation of the private option given the key role he has played in developing and managing the policy. 


I have a great deal of confidence in the team that we’ve built here to manage this program and help sustain progress. I’m confident in the teamwork and the processes that have been developed across agency lines to purchase coverage in the new Marketplace. I’m exceedingly optimistic about the likely impact that the private option is going to have on the insurance marketplace, on competition. It’s always the case that large endeavors like this have to be managed. You can’t ever just lock the door and assume that what goes on inside the room is positive and will remain constant over time. That’s really the fundamental flaw of the fee-for-service system that payers — not just Medicaid — have relied on for decades in health care: A static system not related to the care that was being provided. In the private option, we have a good strong team. The idea is sound. I’m very optimistic about its success. I wouldn’t leave if I thought it would damage its prospects for success. 

On the future of the private option: 

I think that appropriately managed, over time we will see competition emerge. We’ve already seen more competition emerge than the state potentially has ever seen in the individual insurance market. This state may see, for the first time, three meaningfully competitive insurance companies statewide in the individual insurance market — an insurance market that anyone, regardless of health insurance status, can participate in with a reasonably affordable premium. That’s historic. I’m optimistic that, well managed, we can see the cost savings not only that we predicted, but potentially even greater than we predicted. It will depend on future decisions and of course I’m more than just a program director at this point. I’ve inevitably become an advocate as well and ultimately share at least some ownership. … I can’t write my own history. But I’m pretty optimistic that the history of this program is going to turn out really well. I think it’s going to generate even more interest in the future than we’ve already seen in other states as the implications of this integration of markets becomes clearer. And as the model, in its basic form, is proven. 

When this began, DHS was advocating for Medicaid expansion, and the private option emerged at least in part because of demands from Republican lawmakers and because it appeared to be the most politically feasible way forward. I asked whether Allison had come to believe that the private option was a better approach for the state to take than traditional Medicaid would have been. 


I have, yes. I think that this form of expansion avoids a number of problems inherent in the Medicaid program — not least of which its perceived separation from the rest of the health care system. And even though the costs might be very similar regardless of whether it’s Medicaid expansion or the private option, I think that the private option and its direct integration of markets will help bring to taxpayers, to voters, and to non-participants an ownership, an investment, and a recognition of the services that are being provided. And that that likely wouldn’t happen if it were Medicaid expansion. I think that long run, the viability of providing support to the low-income population of this state for health care is more sustainable with the private option than it would be with the Medicaid program — which undeservedly has come to have some negative connotations by a great many policymakers and voters. I don’t agree with those negative connotations, but they are real. That reality meant that a traditional Medicaid expansion was unlikely. You’ve asked whether I’ve come to believe that the private option is better or preferable to a Medicaid expansion, and yes I do believe that. 

On why he is leaving:

It’s a decision that in some respects has been coming for a long time. I’ve had this position in one state or another in the neighborhood of three times longer than the average, maybe more. Usually Medicaid directors will tell you it’s the best job they ever had. They’ll also tell you that they had it for about two years. I stayed in the game because this is the most important time in Medicaid’s history. I wanted to do what I could in that time. But it does come with a price and a toll. Now that the core missions that I accepted, or came to me, have been achieved, I need to focus on other things. In particular my family. I need to hit the re-set button and take at least a break from state service. 

What’s next?

I think that it will involve the private sector. I haven’t accepted a position. I’m looking at private sector opportunities. I’ve considered academic positions or positions in which I could explain what’s happened here, explore ideas I have, and relay what I’ve learned. Some combination of the two is most likely. I’m still talking to folks and trying to decide what’s best for me and the family.

I don’t have an offer that I’m ready to take and really am still in conversations.

(Allison added that he does not plan to take a role with one of the major contractors or subcontractors of DHS).

I asked whether his decision was influenced by Gov. Mike Beebe‘s term ending, or the possible outcome of the governor’s election. 


Not at all, I never had anticipated a long-run stay in this position, and have ancitipated an exit at about this time for a while. The weight of the debate and the question of coverage last year was fairly heavy. To be honest, I wondered myself whether I should attempt another session. Ultimately I came to the decision that I would, but I’m not going to press my luck. Especially not with my family. That really drove the timing.

Allison has two children in college in Kansas and two in school in Benton, where his wife teaches. “We plan to remain in Arkansas indefinitely,” Allison said. “It’s our new home.”