Healthcare Business News

Some states can steer Medicaid funds to exchanges

By Gregg Blesch
Posted: March 31, 2013 - 12:15 pm ET

The Obama administration is showing willingness to let some states steer new Medicaid funding to private coverage in the new individual insurance marketplaces in order meet the coverage goals of the healthcare reform law.

The CMS will consider granting a “limited number” of state waivers for demonstration that test what happens when states give Medicaid enrollees the option of taking a subsidy to buy a private plan, according to new guidance issued Friday.

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Officials in Arkansas and several other states in recent weeks have proposed premium subsidies as a solution to their political dilemma. The strategy is an attempt to win new federal funding by raising the eligibility threshold as called for in the Patient Protection and Affordable Care Act without dramatically expanding traditional Medicaid rolls, a deeply unpopular prospect among many governors and state lawmakers.

The CMS said that states asking for a demonstration waiver would have to give enrollees the option of at least two plans in the insurance exchange and must coordinate wrap-around benefits and cost-sharing adjustments.

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