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Hash: HHS 'Anxious' to Talk to States About Using Medicaid Expansion Funds for Private Coverage

By John Reichard, CQ HealthBeat Editor

March 18, 2013 -- Top Health and Human Services (HHS) official Michael Hash told reporters last week that the Obama administration is not only interested in talking to states about using federal Medicaid expansion funds to buy private coverage but, in fact, is "anxious" to do so.

"We're anxious to talk about this with any state that has an interest," Hash, director of the Office of Health Reform, said in a telephone press briefing that HHS held to trumpet the accomplishments of the health care law (Pl 111-148, PL 111-152) as it approaches its third anniversary, which is on March 23. But federal officials do not yet have a proposal on that type of Medicaid expansion to which they can respond, he said.

Hash said states are talking to HHS about using federal Medicaid expansion funds under the health care law to buy private coverage for uninsured residents. But the conversations have been informal so far. "To my knowledge, we do not have a formal proposal," he said.

States appear to be specifically interested in having those eligible for the expanded Medicaid program under the law use federal dollars to buy private coverage on insurance exchanges without having to meet current Medicaid regulations.

In Florida, GOP state Sen. Joe Negron is working on what he calls a "Florida solution," under which the state would buy private insurance policies with expansion funds, according to the Miami Herald.

The approach could be to allow adults to be covered in the Florida Healthy Kids program, the state's public-private program for low-income children, lawmakers said.

Arkansas officials are considering something similar. Gov. Mike Beebe, a Democrat, has said that HHS Secretary Kathleen Sebelius has told him that Medicaid expansion funds could be used to place low-income citizens in private insurance plans.

Florida Senate President Don Gaetz, a Republican, said in a written statement that the House and Senate will work together to explore how to provide private health insurance options for low-income people and replace the Medicaid program.

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