Medicaid signee fee for agent said puny

Saturday, June 14, 2014

Already stung by reduced commissions from health insurance companies, many insurance agents are frustrated with helping Arkansans through a sometimes cumbersome process for enrolling in the state's so-called private option insurance program, a representative of an industry group said Friday.

"The system for enrollment was totally inadequate and continues to experience overwhelming inadequacies," Dolores Chitwood, chairman of health legislation for the National Association of Insurance and Financial Advisors of Arkansas, said. "If that is not resolved, you are going to see that agents simply are not going to be able to help clients with enrollment."

Chitwood spoke at a public forum on the private option. The program allows those who qualify for coverage under the state's expanded Medicaid program to sign up for plans on Arkansas' federally run health insurance exchange and have the Medicaid program pay the premium.

The expansion extended eligibility to adults with incomes of up to 138 percent of the poverty level: $16,105 for an individual or $32,913 for a family of four.

As of May 31, more than 187,000 Arkansans had been approved for coverage under the expanded Medicaid program, including more than 152,000 who were enrolled in the private option.

Those in the private option included 64,516 who used a state website, insureark.org, to select their plans, and 87,596 who were automatically assigned to a plan after they failed to choose one once approved for coverage, Arkansas Department of Human Services spokesman Amy Webb said.

Of those who chose their own plan, 5 percent -- or about 3,200 people -- said in their online enrollment forms that an insurance agent had helped them with the selection.

The website allows applicants to list information about the agent, who can then receive a commission from the insurance company.

Before choosing a plan, applicants must first be approved for coverage. The applications can be submitted through another state website, access.arkansas.gov; a federal website, healthcare.gov; or by submitting information over the phone or on paper to the Department of Human Services or federal Centers for Medicare and Medicaid Services.

Chitwood said the application and enrollment process can sometimes be completed in as little as 30 minutes. Other times, however, it can take hours or even days.

The delays occur when one of the websites is malfunctioning or when applicants are required to submit records to verify their identities or income, she said.

Meanwhile, she said insurance agents' commissions have been reduced to "next to nothing" because of a provision in the federal health care overhaul law that limits insurance companies' spending on administrative expenses, including commissions.

For plans sold to individuals and small businesses, the law limits spending on those expenses to 20 percent of the amount collected in premiums. The rest must be spent on medical care or patient health initiatives.

If the companies' spending on administrative expenses exceeds the limit, the companies must refund the difference to their customers.

Webb said access.arkansas.gov has been offline on occasions when a federal data hub, used to verify applicants' incomes, is down.

The department hopes to make it easier in the future for applicants to complete their applications and enrollment in one sitting.

The department also expects to get information more quickly on applications submitted to the Centers for Medicare and Medicaid Services. The department now gets those data files from the federal agency weekly.

"We do want to make it easier for people," Webb said. "We know it can be cumbersome at times."

The public forum, held in a classroom at the University of Arkansas for Medical Sciences in Little Rock, was required under the waiver from the Centers for Medicare and Medicaid Services that authorized the private option.

The comments and the Human Services Department's responses will be submitted to the federal agency, Webb said.

Angela Jimenez-Leon, Patricia Minor and Alex Handfinger, students at the UAMS College of Public Health, spoke about a report they helped prepare summarizing interviews with 29 people who gained coverage through the federal health care law, including through the private option.

While some of those interviewed had trouble enrolling, most "are very happy with what they have" and said the coverage would allow them to get the medical care they need, Minor said.

The Arkansas Hospital Association and several Arkansas hospitals took the opportunity to reiterate their support for the private option, saying it is helping to offset cuts in Medicare reimbursement caused by the federal health care law and automatic, across-the-board federal budget cuts.

Since coverage under the private option started Jan. 1, Helena Regional Medical Center has received $3.2 million in reimbursement for treating patients covered by the program, hospital CEO Buddy Daniels said.

The services provided have included 46 hospital admissions, 485 emergency room visits, 22 outpatient surgeries and 459 other outpatient services, he said.

The private option is "going to keep us viable in future years," Daniels said.

A Section on 06/14/2014