Senate OKs bill to set up manager of insurance exchange in ’15

The Senate voted 27-5 Thursday to approve placing a federally run insurance pool for Arkansans in the hands of the state.

House Bill 1508 by Rep. Mark Biviano, R-Searcy, would take the federal-state insurance exchange and place it under the control of a state-level nonprofit in 2015. The state opted for a federal-state partnership after missing the deadline to take control of its exchange before 2015.

The Patient Protection and Affordable Care Act required the creation of private insurance marketplaces- called exchanges - from which people can insurance plans.

Arkansas lawmakers wouldn’t approve a state exchange in 2012, so the state Insurance Department worked with the federal government to create one. More than 200,000 Arkansans will purchase insurance through the exchange, along with the 250,000 who would use federal funds to buy plans through the state’s private option.

HB1508 creates a nonprofit, state-controlled legal entity called the Arkansas Health Insurance Marketplace that will manage the insurance exchange.

The change has drawn little notice in a session focused on tax cuts and whether to pay for 250,000 low-income Arkansans to purchase insurance on the exchange. That’s contrary to states like Idaho, which had a seven-hour debate last month about the nonprofit idea before approving it.

Several states plan to use similar nonprofit boards or private companies to run their exchanges such as California, Colorado, Hawaii, Mississippi and New Mexico.

Arkansas’ nonprofit marketplace would be supervised by an 11-member board of directors. The board would include healthcare professionals, consumers and insurance representatives appointed by the governor and legislative leaders, as well as the state insurance commissioner and the Department of Human Services’ director. The bill also creates a legislative oversight committee.

The marketplace could hire companies with experience running exchanges.

“It gives us much more flexibility,” Biviano said. “It allows us to control our costs … it allows us to refresh our technology when needed. Really it will allow for a better consumer-client experience in the long term.It just takes a burden away from the state that we don’t necessarily need.”

Biviano said he expects the nonprofit to build on what the Insurance Department and federal government have planned over the past two years.

“We’re not going to try to tear anything down. It would be to supplement and enhance and improve,” he said.

Biviano said he worked with the Insurance Department and the state surgeon general to write the bill.

“I think they see the value in this, so it’s been a common goal,” he said.

Federal subsidies will be available to individuals and families who purchase insurance on the exchange and who earn between 138 percent and 400 percent of the federal poverty level. Those thresholds, based on this year’s poverty guidelines, are $15,860 to $45,960 for an individual and $32,500 to $94,200 for a family of four.

A report commissioned by Washington, D.C.-based Families USA and released Tuesday estimated that 281,580 Arkansans, most of whom lack insurance, will be eligible for these federal subsidies.

The Arkansas Insurance Department estimates about 211,000 of the eligible Arkansans will sign up.

Front Section, Pages 6 on 04/19/2013

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