Health board delays grant request

Officials: U.S. wants firm plan to set up insurance exchange

Officials with a state-created nonprofit have decided to wait until October to request more than $100 million to establish a state-run health insurance exchange that would replace the one set up for the state by the federal government.

The Arkansas Health Insurance Marketplace Board had been planning to submit a request this week for funding that could be used to set up the exchange, which could begin operations as soon as July 1.

Chris Parker told fellow board members at a meeting in Little Rock on Monday that officials with the U.S. Department of Health and Human Service's Centers for Medicare and Medicaid Services told him they want the board to have a formal agreement in place with the state Department of Insurance on how the transition to a state-run exchange would occur.

"They want a firm plan for who's in charge of what, when," Parker said.

Currently, the Insurance Department handles some consumer outreach activities and helps regulate the plans offered on the federally run exchange.

Parker said he will work on an agreement with the Insurance Department and present it to the board for approval.

According to a draft budget, the request would total $117 million.

The bulk of the money, $79 million, would go toward designing and building the computerized systems allowing people to shop for plans and apply for subsidies.

The request also includes $15 million to establish a customer service call center, $10 million to hire a firm to conduct a statewide outreach campaign and $2 million to contract with organizations that would provide outreach workers and train the workers.

The board plans to submit the grant application by Oct. 15.

Established in every state under the federal Patient Protection and Affordable Care Act, exchanges allow consumers to shop for health insurance and apply for subsidies to help them pay for it.

The Centers for Medicare and Medicaid Services operates the exchanges in Arkansas and 35 other states. The remaining states opted to set up their own exchanges.

A law passed by the Legislature last year created the Arkansas Health Insurance Marketplace Board and directed it to decide whether Arkansas should take over the operation of the state's exchange as early as next year.

The Centers for Medicare and Medicaid Services in January awarded the Arkansas Insurance Department about $3.6 million to pay for the board's planning efforts.

A preliminary estimate by the Boston-based Public Consulting Group, presented to the board last month, put the cost to set up an exchange at $91 million to $131 million. That estimate was based on the costs associated with seven state-run exchanges with "proven functionality," Cheryl Smith, the Health Insurance Marketplace's director, has said.

Grant money could pay for the exchange's operations during its first year, but the exchange would have to support itself after that through user fees, Smith has said.

The cost of ongoing operations hasn't been determined, she said.

Board members have stressed that the board would not be obligated to spend all of the grant money awarded. The board hasn't decided whether it would go through with setting up an exchange or when the exchange's operations would begin.

At the meeting last month, Smith recommended that the board include any money it might need for the project in its grant request because the last opportunity to apply for a grant is Nov. 14.

Also on Monday, the Health Insurance Marketplace Board voted unanimously to extend its contract with Public Consulting Group by a year, at a cost of about $2.5 million.

Under the contract extension, the firm will provide research, help solicit bids from companies to set up the exchange and manage the project's implementation.

The board's initial contract with the firm, for $764,150, began April 1 and expires Sept. 30.

Metro on 08/12/2014

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