Arkansas is using this weird trick to expand Medicaid

Welcome to Arkansas — now home to a Medicaid expansion! (Flickr)

We've got some big news about Arkansas' kind of crazy Obamacare plan.

Get. Excited.

Earlier today, the Center for Medicaid and Medicare Services notified state officials in Arkansas that it has approved the states' Medicaid expansion plan. And this is not any old expansion plan: Arkansas will be the only state in the country that will use Medicaid dollars to purchase private health insurance for its new public program enrollees.

"CMS is pleased to approve Arkansas’s Medicaid 1115 Waiver application," Medicare spokeswoman Emma Sandoe said in a statement. "Arkansas and CMS worked together to find flexibilities that gave the state the tools to build a program that worked for them and their residents. We appreciate the collaboration with Arkansas throughout the process and applaud their commitment to providing Arkansans with access to high-quality health coverage."

There are about 200,000 Arkansans who qualify for the Medicaid expansion. Instead of having them enroll in the public program, like other states will do, Arkansas will send them to their new health insurance marketplace to buy individual plans. When they get to the point of purchase, the Medicaid agency will foot the tab for their health insurance coverage.

The Arkansas expansion will start open enrollment just five days from now, on Oct. 1, alongside the 25 other states planning to expand the program. Benefits will begin Jan. 1.

A Medicare official I spoke to said the agency expects the program to be budget neutral, meaning it won't cost the federal government any more than a traditional expansion. That's a condition of this type of agreement between a state and a federal government, known as a 1115 waiver. The agreement lasts for three years, at which point either side can decide whether to renew.