Using Medicaid to Buy Private Health Insurance — The Great New Experiment?

Abstract

The Medicaid expansion is a cornerstone of the Affordable Care Act (ACA), but since the Supreme Court ruled in 2012 that states could opt out of expanding their Medicaid programs, resistance has been strong. With uncertain-to-dim prospects of adoption in roughly half of states, the Obama administration has moved to allow states to adopt a model whereby Medicaid funds could be used to buy private health plans sold through the new health insurance exchanges.¹ Arkansas has enacted legislation to adopt such an expansion; other states, including Ohio, appear to be negotiating with the federal government over replacing the standard Medicaid approach with premium assistance.