Arkansas and Iowa molded Medicaid plans into their own state signatures. They have a more conservative version of what's called the "private option," which means that instead of expanding the public program, the two states will use federal funds to help low-income Americans buy private insurance through the state's marketplace.
"Arkansas and CMS worked together to find flexibilities that gave the state the tools to build a program that worked for them and their residents, " Medicare spokeswoman Emma Sandoe said in a statement.
The reason that people with lower incomes don't typically enroll in private insurance is that they can't afford it. Although many of the new participants in Arkansas' alternative model will be responsible for cost sharing, such as copayments and deductibles, they won't have to pay monthly premiums.
This month, more than 93,000 people have filed applications for Arkansas' health insurance under the state's Medicaid option, according to the Arkansas Department of Human Services. Of that amount, roughly 74,000 have been deemed eligible for the private option.
Arkansas' personalized plan doesn't mean traditional Medicaid doesn't exist. Around 5,900 people have been assigned to the traditional Medicaid option because of health needs.
Similarly, Iowa provides incentives for people on Medicaid to keep on eye out for their health. Joan Alker, who is an executive director at the Georgetown University's Center for Children and Families, is not surprised that the federal government granted Iowa a waiver to try their customized idea. Though Medicaid is federal-state joint program, Alker points out that the Obama administration is willing to bend over backwards to draw in states for the expansion, to show the other half of the country – that has opted out of Medicaid expansion – how much flexibility states truly have.
There are drawbacks to Arkansas and Iowa's customized plans. Notably, beneficiaries who have to pay for premiums and non-emergency care cannot unenroll if they're unable to pay them.
"That's important, because we already have plenty of evidence to suggest that charging premiums to people below [the] poverty [line] will mean that they can't afford them and they're likely to lose their coverage," Alker told National Public Radio.
Another downside is that there is a limitation on benefits for non-emergency medical transportation, which is included in other states.
"They're covered for emergency transportation," Alker went on. "They're going to get that ambulance to get to the hospital. But we want to make sure folks are able to get their preventative and primary care appointments. When you're talking about people who literally could have limited or no income, that becomes a real barrier."
Both Arkansas and Iowa plans utilize the private option for Medicaid, granting residents less waiting times, continuity of care with the same physician and more choices in terms of facilities and consultants.
While some proponents of the unique systems believe it will better cater to the residents' needs, critics argue that private insurance options will ultimately increase health spending. Other states, including Tennessee and Pennsylvania, are looking at the model of Arkansas and Iowa to decide if they want to move forward with options like them.