Weekend Economists Salute Our Favorite Bunnies March 29-31, 2013

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35. Some U.S. States Can Shift Medicaid Funds to Exchanges

http://www.bloomberg.com/news/2013-03-29/some-u-s-states-can-shift-medicaid-funds-to-exchanges.html

Low-income people may get Medicaid money to buy health insurance from private plans such as UnitedHealth Group Inc. (UNH) or Humana Inc. (HUM) in a “limited number” of states, U.S. officials said.

Arkansas and Ohio have asked President Barack Obama’s administration to allow them to adjust how Medicaid dollars are used. The U.S. Centers for Medicare and Medicaid Services said yesterday it would allow an unspecified number of states to do this as long as it doesn’t cost the government more than the traditional Medicaid program.

The plan is a departure from the 2010 Affordable Care Act, which calls for an expansion of government-run Medicaid, the health program for the poor. Under the health law, about 12 million people are expected to be added to Medicare’s rolls by 2020 as the program grows to cover people earning as much as about 138 percent of the federal poverty level, or about $32,500 for a family of four.

“We remain committed to working with states and providing them with the flexibility and resources they need to build new systems of health coverage,” Cindy Mann, the agency’s Medicaid director, said in a blog post yesterday. “Premium assistance is simply one option.”