State lawmakers decided Friday that they will wait to see what premiums will be charged for plans offered on the state’s health-insurance exchange before giving the OK to spend additional money to promote it.
The Legislative Council, the Legislature’s governing body when lawmakers aren’t in session, had been scheduled Friday to review a $4.5 million contract extension for a campaign aimed at encouraging people to obtain coverage through the exchange, which is being set up under the 2010 federal health-care overhaul law.
Instead, on a divided voice vote, the council decided to put off consideration of the contract to an unspecified date after Monday, when the rates and other details of the plans are expected to be released.
Rep. Douglas House, R-North Little Rock, who made the motion for the delay, said the cost of the plans may determine whether the state should go forward with the outreach contract.
“If we get the information and it turns out it’s not a good deal for the people of Arkansas, we don’t want to advertise it,” House said. “If it’s going to help a lot of people, if it’s a good deal for the people of Arkansas - absolutely.”
Rep. Jim Dotson, R-Bentonville, questioned the need for the delay, but Rep. John Edwards, D-Little Rock and co-chairman of the council, said House’s motion was “not debatable” and called for the vote.
Several “ayes” and “nays” could be heard in the voice vote. No one called for a roll call vote.
“The ‘ayes’ have it, and we stand in recess for the next meeting,” Edwards said.
Sen. John Dismang, R-Searcy and a sponsor of legislation authorizing the expansion of the state’s Medicaid program through plans offered on the exchange, said postponing the contract review was “the prudent thing to do.”
“Members have a lot of questions about the rates,” Dismang said. If the plans turn out to be expensive, he said, “I think there’s a lot of apprehension to move forward with anything.”
Enrollment is expected to begin Oct. 1 for plans on the exchange, which is expected to make subsidized coverage available to about 500,000 Arkansans.
Under the legislation sponsored by Dismang and Rep. John Burris, R-Harrison, about 250,000 adults with incomes of up to 138 percent of the poverty level - $15,860 for an individual or $32,500 for a family of four - will be able to sign up for a private plan on the exchange and have their premiums paid by Medicaid.
Others with incomes of up to 400 percent of the poverty level - $45,960 for an individual or $94,200 for a family of four - will be eligible for tax credits to help them buy coverage.
Insurance Commissioner Jay Bradford said the premiums for plans on the exchange will be higher than those for plans that are available now in the individual insurance market because insurance companies will no longer be able to deny coverage to people with health problems.
The plans also will be required to cover some services, such as therapy for the developmentally disabled, that most insurance plans don’t cover now.
“This is enhanced coverage,” Bradford said. “There’s got to be a cost to those things.”
However, he said, Medicaid and the tax-credit subsidies will make the coverage affordable.
He added that, “Once it matures, if the numbers hold up pretty well, these rates will come down.”
The delay in approving the marketing contract is “not going to put us very far behind” on the outreach campaign, he said.
“The intent of the committee, or at least hopefully a majority of the committee, is to address that issue pretty quickly next week.”
Matt DeCample, a spokesman for Gov. Mike Beebe, said it’s hard to predict how legislators will react to the rates.
“You have some that have made it clear they’re not going to change their mind no matter how the rates look, but some have been more analytical in just saying, ‘Hey we want to see these numbers before we move ahead with outreach.’ And we’re fine with that,” he said.
Dismang said the rates will be an indication of whether the state’s method of expanding Medicaid - through private plans under the so-called private option instead of under the traditional program - is working.
“There are a lot of conservative theories utilized in the creation of the private option, premium price support being the biggest component of that,” he said.
The contract extension with Little Rock advertising firm Mangan Holcomb partners would pay for television and newspaper ads, billboards and other outreach efforts, which use the slogan, “Get in,” from Oct. 1 through March 31, when people will be able to sign up for the plans.
An earlier, $4.3 million phase, covered marketing efforts through Sept. 30.
Money for the contract comes from the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services.
The state Insurance Department originally planned to spend $5.1 million on the second phase of the contract. In August, the Legislative Council’s Review Subcommittee postponed its review of the contract at Dismang’s request. He said he wanted to make sure the spending wasn’t excessive.
Dismang said Friday that some of the ads in the first phase of the campaign “focused a lot more on propaganda related to the Affordable Care Act” instead of educating people and warning them about the potential for scams.
After the department trimmed more than $600,000 from the second phase of the contract, the Review Subcommittee reviewed it on Sept. 4, clearing the way for it to go to the Legislative Council.
Until the council reviews the second phase, Mangan Holcomb can’t rework the ads to change the focus from urging people to learn about their options to encouraging them to enroll, Insurance Department spokesman Heather Haywood said.
If the contract is reviewed next week, the firm will attempt to rework the ads and have them running by Oct. 1, she said.
“Certainly every effort would be made to have some media in the market as quickly as we could,” she said.
Front Section, Pages 1 on 09/21/2013