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Arkansas governor signs private insurance option into law

Arkansas governor Mike Beebe looks on during a Martin Luther King Jr. service in Little Rock, Arkansas in this January 15, 2013. REUTERS/Ark
Arkansas governor Mike Beebe looks on during a Martin Luther King Jr. service in Little Rock, Arkansas in this January 15, 2013. REUTERS/Ark

By Suzi Parker

LITTLE ROCK, Arkansas (Reuters) - Arkansas's Democratic governor signed into law on Tuesday a plan to extend health insurance to more of the state's low-income residents in a move that could offer a model for other states wrestling with opposition to the federal government's Medicaid expansion plan.

The Arkansas law uses federal Medicaid funds to buy private insurance for about 250,000 state residents who earn up to 133 percent of the poverty line, or $15,415 per year. The insurance would be purchased through a health insurance exchange that the federal government is due to begin operating with Arkansas at the start of next year.

Arkansas officials plan to travel to Washington in the coming weeks to present their plan to federal officials to gain necessary approval.

"Our work is just beginning," Governor Mike Beebe said after signing the bill. "There's a lot of i-dotting, t-crossing and follow ups that have to occur."

The Arkansas plan has drawn interest from some conservatives in Republican-controlled states such as Texas and Louisiana because it would use federal rather than state funds to buy private insurance as a way to help the most vulnerable citizens without expanding Medicaid.

The Arkansas plan has been closely watched around the United States as an alternative to President Barack Obama's sweeping Medicaid expansion, a major provision of the Patient Protection and Affordable Care Act that aims to extend health coverage to at least 12 million low-income Americans by the end of the decade.

Marilyn Tavenner, the U.S. health official who oversees Medicaid and Medicare and the implementation of the health reform law, said earlier this month that U.S. officials were talking to a handful of states about setting up a program similar to Arkansas's.

Arkansas U.S. Senator Mark Pryor, a Democrat, commended "Republicans and Democrats for working together to improve access to healthcare and using the funding provided through the Affordable Care Act to benefit the people and economy of Arkansas."

Obama's healthcare reform law has run into stiff political resistance in Republican-controlled states, particularly in the South, where leaders have been unwilling to expand Medicaid or set up their own health exchanges.

Provisions of the healthcare reform law have been challenged in court cases around the country. In a landmark ruling last June, the U.S. Supreme Court endorsed the Affordable Care Act on constitutional grounds but allowed states to opt out of the Medicaid expansion.

The expansion has since been accepted by governors in about half of the 50 U.S. states.

(Editing By Brendan O'Brien, Cynthia Johnston and Eric Beech)

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