DHS releases actuarial numbers behind "private option" study | Arkansas Blog

Wednesday, March 27, 2013

DHS releases actuarial numbers behind "private option" study

Posted By on Wed, Mar 27, 2013 at 3:20 PM

*UPDATE: Two headlines worth highlighting — the total projected savings for the state doing "private-option" expansion versus doing no expansion are more than $670 million between 2014 and 2023. The savings project to be well over $100 million per year from FY 2015 through 2017. The study projects moderate net costs of expansion to the state in the out years — once the match rate drops to 10 percent in 2021 — of around $10 million per year. But this estimate does not appear to include the revenue stream from insurance premium fees, which would likely wipe out that cost. The insurance premium fees are in fact included. Still, $10 million a year in 2021 and beyond amounts to a rounding error. Meanwhile, they also project that "private option" would save the feds $592 million over ten years versus traditional Medicaid expansion (!).

The Arkansas Department of Human Services last week released a summary of findings that expanding healthcare coverage via the "private option" would cost the feds less than 15 percent more than traditional Medicaid expansion, and could even come at no additional cost at all.

This was, as they said at the time, a "direct challenge" to the general consensus that the "private option" would be much costlier to the feds. Because they offered assertions without much in the way of numbers behind them, their claims were greeted with some healthy skepticism.

Today they have released numbers that help clarify how they arrived at their conclusion, although major questions remain about the methodology behind them. More soon, but for now: Take a look at the numbers.

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