The Government Accountability Office (GAO) says its audit of a demonstration program for Medicaid expansion in Arkansas shows that the program is not cost-neutral, which violates standards for allowing Medicaid experimentation.
The Department of Health and Human Services (HHS) denies that the Arkansas program will cost the federal government $778 million more than if a standard Medicaid program were in place, as the GAO report claims.
In Arkansas’ case, “HHS did not ensure budget neutrality,” the GAO found, potentially putting federal taxpayers on the hook for the state’s decision to expand Medicaid.
With a Democratic governor and Republican legislature, Arkansas agreed to expand its Medicaid program under the Affordable Care Act (ACA) but only if it could purchase private insurance for all the newly insured. Iowa so far is the only other state to be approved for this option.
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