Providing access to private medical insurance for 250,000 low-income residents in a proposed expansion of Medicaid will save the Arkansas $670 million over the next 10 years, according to a report from the Department of Human Services.
The state won federal approval in February for Gov. Mike Beebe’s proposal for a private option to insure Arkansans with annual incomes of up to 138% of the federal poverty level, or $15,145 per person.
The savings are a mixture of reduced spending and more people paying taxes, said John Selig, director of the department.
The benefits to the state would come largely during fiscal 2015, 2016, and 2017, years when the federal government would pay 100% of the premiums through the private insurance exchange. Benefits to the state would range from $151 million in fiscal 2015 to $146 million in fiscal 2017.
The state would gradually take on a share of the cost until by 2020 it would be responsible for 10% of the premiums. By fiscal 2021, the state payment would be less than $11 million a year.
The report said the federal government would save $592 million if the state opts for the private insurance rather than adding to Medicaid rolls.
The Legislature is considering at least three options, including doing nothing or adding the low-income residents to the current public program. The 2013 session will conclude April 19.