The Arkansas Legislative Council decided to proceed with a $16.47 million federal grant Tuesday to help the Arkansas Insurance Department pay for hundreds of people to provide one-on-one assistance to the half-million people eligible to join the new health insurance exchange.
Lawmakers voted 23-9 to move forward after some members objected to the funds, which will help implement the health insurance exchange required by the 2010 Patient Protection and Affordable Care Act.
An exchange is an online pool where people can shop for private insurance plans. Arkansas chose to work with the federal government on its exchange after Republican lawmakers rejected a bill in 2011 that would have created an Arkansas-run exchange.
Cindy Crone, who is organizing the state health insurance exchange, said she knows that lawmakers may be reluctant to approve funding for anything having to do with the federal health-care law.
“I was just happy that they approved it in the end,” Crone said. “I just have to go appropriation to appropriation. I’d be concerned that it [will] not continue, but we’ll work with the legislators.”
With the money accepted Tuesday, Arkansas has received nearly $43 million in federal funds to organize the state portion of the exchange and to hire people to help the estimated 500,000 eligible Arkansans sign up.Enrollment begins Oct. 1.
About 250,000 of those eligible are expected to be low-income Arkansans who will purchase private insurance paid for with federal funds if the federal government accepts the “private-option” plan approved by Arkansas legislators during the 2013 legislative session. Many others who purchase insurance through the exchange are expected to receive federal subsidies if their incomes are less than 400 percent of the federal poverty level, up to $45,960 for an individual and $94,200 for a family of four.
Anyone eligible can enroll between Oct. 1 and March 31. However, those making up to 138 percent of the federal poverty level will be able to enroll past that deadline, Crone said.
The grant will go mostly to help people enroll in plans offered through the exchange. That includes hiring 535 people to help consumers one-on-one and creating a resource center for consumers with questions to call. An additional 100 outreach workers will be hired using Medicaid funds.
Rep. Debra Hobbs, R-Rogers, questioned why private insurance companies or insurance agents couldn’t enroll the eligible Arkansans in health-insurance plans.
Crone said private insurance agents will need specific training and certification that is required by the federal government, such as studying the federal tax code, if the agents chose to participate in helping sign up people.
She said the federal health-care law also provides for other consumer assistance.
Also Tuesday, the council took no steps to block a $60 million investment by the Arkansas Teacher Retirement System into Big River Steel LLC.
The retirement system’s board of trustees voted to invest the funds Feb. 4. Board Director George Hopkins said the system has already invested $600,000 in the steel company.
During this year’s legislative session, lawmakers authorized the state to issue $125 million in bonds for the $1.1 billion proposed steel mill near Osceola.
The steel mill would employ about 525 full-time workers each earning an average annual salary of about $75,000, according to steel magnate John Correnti of Blytheville, who heads Big River Steel, the company seeking to build the plant.
The $60 million investment makes the retirement system a 20 percent partial equity owner of the company.
Rep. David Meeks, R-Conway, asked if the system would ask lawmakers to help recoup the money if the steel mill fails or if it is never built.
Hopkins said the system has weighed the risks. He said the $60 million is about one-half of 1 percent of the system’s $13 billion trust fund.
“We make investments all the time, and there are risks associated with all of them,” Hopkins said. “If we lost every penny of it, we will not be back here in front of the Legislature asking you for anything to make up that $60 million.”
The Legislative Council also signed off on up to $65 million in investments approved by the Arkansas Teacher Retirement System’s board of trustees April 1.
Those investments include up to $20 million in a real estate fund managed by LaSalle Growth & Income Fund VI GP LLC; up to $20 million in a private equity fund managed by Levine Leichtman Capital Partners; and up to $25 million in a private equity fund managed by KPS Capital Partners.
The council also signed off on the Arkansas Public Employees Retirement System’s limited partnership ownership agreements with National Timber Partners LLC and Pinnacle Forest Investments LLC.
The Public Employees Retirement System has about $100 million invested in timberland through National Timber Partners. Its trustees voted in October to terminate the investment, and the liquidation of assets will be completed by Dec. 31, according to the system. The trustees decided in November to reduce the system’s investment of about $193 million to about $75 million in Pinnacle Forest Investments LLC.
Northwest Arkansas, Pages 8 on 05/29/2013