Evidence from the Private Option: The Arkansas Experience

Issue: Arkansas was the first state to receive approval to expand Medicaid under the Affordable Care Act through a Section 1115 waiver. This approach, known as the "private option," uses Medicaid funds to purchase private health plans on the state’s marketplace. It is intended to promote market competition, continuity of coverage, and greater access to care. Goal: To describe the key features of the private option and evaluate its impact on health care for low-income adults in the state after two years. Methods: Survey data from 2013–2015 that assessed health insurance coverage, access to care, utilization, and self-reported health among low-income adults in Arkansas compared to adults in two other states. Key findings and conclusions: Arkansas’s private option improved access to primary care and prescription medications, reduced reliance on the emergency department, increased use of preventive care, and improved perceptions of quality and health among low-income adults in the state, compared to Texas, which did not expand Medicaid. Arkansas’s benefits were similar to those observed in Kentucky’s traditional Medicaid expansion. Churning in coverage remained a challenge for nearly a quarter of low-income adults each year.