In an attempt to find a middle ground between accepting the Medicaid expansion under President Barack Obama’s law and rejecting it, the Arkansas legislature passed a bill with the intent of using Medicaid dollars to allow recipients to purchase a form of private insurance. The proposal relies heavily on two assumptions: that adding new, subsidized customers will result in increased price competition among providers, and that the new coverage will not prove significantly more expensive than the originally intended Medicaid plans, an aim that could prove daunting. Under the plan approved by the legislature, the state will apply for a demonstration waiver from the U.S. Department of Health and Human Services (HHS). According to the Centers for Medicare and Medicaid Services, the 1115 waivers are a method “states can use to test new or existing ways to deliver and pay for health-care services in Medicaid.” Nicole Kaeding, state policy manager at the Americans for Prosperity Foundation,...