Richard Mayhew agrees the “private option” Medicaid plan is extra expensive for no good reason, but he believes the political economy is perhaps more stable because the pointless middlemen will fight for their jobs, and thus protect the coverage expansion. But he warns us not to draw any conclusions about the fate of CorbettCare from HHS’s approval of the Arkansas plan:
This is a political exercise that will make sure that tens of thousands of people who otherwise would not have gotten coverage will get coverage. A 8% or 10% inefficiency tax that allows people to benefit from Obamacare without calling it Obamacare is a net societal win. Furthermore, since it now builds in a layer of middle men that have minimal real value, there is a rentier class in Arkansas that will now be interested in keeping their income stream. A new advocate for Medicaid will be created which will make Medicaid sustainable in Arkansas.
Furthermore, several other states (Indiana and Iowa) have applied for very similar waivers from CMS. I think they will get the same waiver in the next couple of weeks. Pennsylvania’s expansion request will not be going through the same expedited approval. Pennsylvania wants to do a premium support model, but Gov. Corbett also wants to do some serious poverty shaming and lifetime limitations on both expansion and current Medicaid populations. I don’t think that waiver request has been filed yet, nor do I think that we can draw any conclusions from the Arkansas waiver to the Pennsylvania plan.