Arkansas To Replace Medicaid With Obamacare

Well this is an interesting development. Arkansas Gov. Mike Bebe (D) is pursuing a creative plan to provide health coverage to poor and low income workers in his state. Instead of adding thousands of people to the Medicaid program, as the ACA (Obamacare) originally intended, Arkansas will simply enroll them in Obamacare itself. Remember that Obamacare’s structure is to pair an individual mandate to purchase health insurance with subsidies to offset the cost of the  premiums.

The feds have given Arkansas permission to pursue a plan that would provide private health insurance to anyone between 0-138 percent of the federal poverty level, giving coverage to more than 200,000 of the currently uninsured. The government would pay for the entirety of the premium, though consumers might be subject to some co-pays.

Now I have not seen any projections of how this decision could affect health care costs, but I cannot imagine them going anywhere but down. Even though Medicaid does provide health coverage for the poor, it is notoriously inefficient, ineffective, and costly. Whether you like like health insurance companies or not, you must admit customers get more health services on the dollar than with Medicaid.  Perhaps expanding Obamacare can further reduce costs to the taxpayer by eliminating Medicaid altogether.

If anything, this development is more evidence that Obamacare is not a socialist takeover of health care. People who used to receive costly government health care in the form of Medicaid will not be buying private insurance. Not exactly the second coming of Chairman Mao. In this case its the precise opposite of socialism; people are receiving less government services.

For some actual in-depth analysis of Medicare and health policy in general, check out the excellent SocioPolitical Dysfunction. I’m sure he has some thoughts on this.