Plans for state-run health exchange scrapped

By Andrew DeMillo, The Associated Press

Posted: December 2, 2011 at 9:58 a.m.
Updated: December 2, 2011 at 1:55 p.m.

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Arkansas’ insurance commissioner on Friday said he would stop trying to seek state control of a health insurance exchange required under the federal health care law after facing opposition from top Republicans in the state Legislature.

Commissioner Jay Bradford said the move means that the federal government, rather than the state, will control the insurance exchange. An advisory group appointed to look at the exchange recommended that it and six associated work groups disband because it was no longer a viable option, Bradford said.

“The steering committee and I believe insurance is local and local regulation is preferable. ...Although disappointed with this outcome, I have accepted the committee’s recommendation,” Bradford said in a statement released by his office.

Gov. Mike Beebe, a Democrat, had already said he didn’t plan on setting up the exchange after facing opposition from Republicans in the majority-Democrat Legislature. But Bradford had continued pressing the case for a state-run program before the Legislature over the summer and fall.

The exchange would be an online marketplace for individuals and small businesses to shop for health insurance. The federal law requires states to either set up an exchange or face having one established for them by the federal government.

A bill authorizing the exchange setup stalled in the Legislature earlier this year, and Beebe has said he doesn’t plan in issuing an executive order to establish one.

Beebe spokesman Matt DeCample said the governor didn’t tell Bradford to stop planning for a state-run exchange and said the commissioner had told Beebe over the past couple weeks about his plans. Beebe said Friday that he had hoped Bradford might be able to make the case to legislators for the exchange.

“I thought he might be able to keep information flowing that might cause some folks in the General Assembly that it was probably a wise thing for us to do our own rather than let Washington do it,” Beebe told reporters at the state Capitol. “It didn’t have that effect.”

Beebe had decided in October to not seek a $3.8 million grant from the federal government to plan for the exchange after a group of GOP lawmakers objected to the move.

Bradford said he was worried that a federal-run exchange could cost the state millions it collects in premium taxes since it’s unclear where that money would go under the program. Bradford also raised the possibility that the state could pursue a partnership where it can manage some functions of the exchange without setting up its own.

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