Private Option Explained with Play-Doh

Arkansas's Medicaid Private Option insurance is an extremely misunderstood piece of legislation. Some believe it is Obamacare. Others believe it is the insurance exchange. Both of those beliefs are wrong.{}

The Private Option only involves a small group of Arkansans on Medicaid and the uninsured poor that do not qualify for Medicaid coverage but also don't make enough money to be able to afford to buy insurance.

Arkansas lawmakers chose to shrink state Medicaid by 87,986 people. Those folks were added to the uninsured poor in a new group called the Private Option. Using federal money for three years, that Private Option group (about 250,000 people) can buy insurance on the healthcare exchange. After three years, the state will begin to pay part of the cost for that insurance, up to 10 percent.

Next week, the Arkansas legislature will decide whether or not to fund the Private Option. If they choose to defund it, both Obamacare and the health insurance exchange will remain. The state has no control over those programs. The only change would be to that group of 250,000 people.

Some lawmakers worry that the federal government will change the rules, leaving Arkansas to foot the Private Option bill. Others wonder if there is a better option than allowing that group to buy private health insurance on the exchange, possibly using instead to a health savings account.

Speaker of the House Davy Carter says he is open to tweaking the Private Option, but he believes defunding it will only lead to more uninsured Arkansans.