Two state agencies modified a nearly $3 million agreement after some legislators said they didn't want state money going to the Arkansas Health Insurance Marketplace.
An amendment, dated Thursday, to the Aug. 17 agreement promises that money from the Department of Human Services won't pay for health insurance "navigators" or administrative expenses related to the state's two health insurance exchanges.
Under the agreement, the Human Services Department plans to pay the marketplace up to $2.9 million through July 2017 to administer a program that will use Medicaid funds to help small businesses provide insurance to low-income employees.
That program is part of Arkansas Works, a revamped version of Arkansas' expanded Medicaid program proposed by Gov. Asa Hutchinson and awaiting federal approval.
Despite the marketplace's promises, Sen. Jason Rapert, R-Bigelow, said Friday that the payments from the Human Services Department appear to violate assurances lawmakers were given when they created the marketplace that it would not be supported by state funds.
At a meeting of the Arkansas Health Insurance Marketplace Legislative Oversight Committee, Rapert also asked why the payments are being made under a "memorandum of understanding," instead of through a contract, which the Human Services Department would be required to submit to the Legislature for review.
"I don't like having to have us all out here on just the very tip of the end of what's possible," Rapert said. "There's a way to do this, and that is, you do it the right way."
The Legislature created the marketplace in 2013 to set up state-run health exchanges for individual consumers and small businesses.
About 300 people are covered in plans offered through the small-business exchange, which the marketplace set up last year using money from a $99.9 million federal grant.
At Hutchinson's request, the marketplace scrapped plans to use the remaining grant money to set up the exchange for individual consumers.
Instead, the agency is taking over responsibility for certifying the plans sold on the exchange and providing information to consumers while continuing to rely on the federal enrollment system.
Under the agreement with the Human Services Department, the marketplace will also help small businesses sign up to offer subsidized, job-based coverage under Arkansas Works.
The agreement with the Human Services Department calls on the marketplace to verify the eligibility of employers and employees, dispense the Medicaid subsidies to employers, operate a call center to answer questions from employers and employees, and establish an Internet portal for employers and employees.
Of the funds paid by the Human Services Department to the marketplace, $2 million will go to Boston-based Public Consulting Group, which will perform much of the work.
The marketplace will also use $300,000 to educate insurance agents and small-business owners about the program. The remaining $594,880 will cover administrative expenses associated with the program, marketplace Director Cheryl Gardner said.
Rapert asked why, in a June report to the federal government, marketplace officials estimated the agency would receive more than $50 million from the Arkansas Works project through 2020.
Gardner said she overestimated the size of the program.
"I think I probably misunderstood the degree to which legislators were going to be committed to moving that population off of traditional Medicaid and onto [employer-sponsored insurance]," Gardner said.
"It's clearly going to be a much smaller program."
Sen. Terry Rice, R-Waldron, noted that special language in an appropriation bill bars the Human Services Department from promoting enrollment in the health insurance exchange or the private option, formally known as the Health Care Independence Program.
Gardner said the employer subsidies are "a different program" from the Health Care Independence Program, which Rice suggested was "splitting hairs."
Kelley Linck, chief of legislative and governmental affairs for the Human Services Department, said the agreement with the marketplace was a way for the department to start work quickly on Arkansas Works.
"The intent of the law and your word probably wasn't taken as much into consideration as it could have been," Linck told committee members.
The department is preparing to solicit competitive bids for a contract to take over the work, he said.
Sen. Linda Chesterfield, D-Little Rock, said she's concerned that legislators haven't been asked to review the marketplace's contract with the Public Consulting Group, which totals $6 million for work from April of this year through April 2018.
The money includes about $550,000 to pay organizations to provide outreach workers, known as navigators, to help people enroll in coverage in the exchange.
Although most state agency contracts go to the Legislature for review, Act 1500 of 2013 established the marketplace as a nonprofit organization exempt from state procurement laws.
"I keep feeling that legislative oversight is slipping away from this whole process, and that's particularly troubling when we're having additions to contracts and we don't know what those additions are," Chesterfield said.
A Section on 10/29/2016