While many states have chosen to take advantage of the Affordable Care Act’s expansion of Medicaid simply by expanding their existing Medicaid programs, a number of states are pursuing a different approach:  crafting programs that enable the newly eligible to select private insurance plans paid for by Medicaid.

This so-called private option has already been approved for Arkansas and Iowa; Pennsylvania has asked the federal government for approval to take a similar approach; and private option alternatives are currently in the works in New Hampshire, Tennessee, Utah, and Virginia.

A question has arisen, however, about whether private option Medicaid plans will be required to offer the same services as conventional Medicaid programs.

At issue in particular are so-called wraparound services – services generally thought to be essential for the Medicaid population that are generally not offered by typical commercial insurance plans.  The best-known of such services is medical transportation:  helping low-income people get to the medical services they need.  Currently, one-third of such medical transportation is used to reach behavioral health services and 18 percent is for trips to dialysis.

Also at risk are Early and Period Screening, Diagnosis, and Treatment Services (EPSDT) – one of the centerpieces of Medicaid services for children.

When Arkansas obtained approval for its private option, the federal government required it to supplement the private insurance plans with wraparound services.  Iowa, however, received an exemption from some wraparound requirements.

The nation’s private safety-net hospitals are especially interested in this issue because they serve so many Medicaid patients.

Learn more about the Medicaid private option approach and its implications for the Medicaid population and state governments in this Stateline article.