But grant in doubt as GOP balks

Planning for an Arkansas-based health insurance exchange as part of the Patient Protection and Affordable Care Act (PPACA) continues despite disagreement between Gov. Mike Beebe’s office and Republican legislators over how – or even whether – to proceed.

The Arkansas Insurance Department had hoped to apply for a $3.8 million Level I establishment grant in September, but that effort stalled after Gov. Mike Beebe and Insurance Commissioner Jay Bradford failed to gain support for the effort from Republican lawmakers. Beebe could move the process forward with a letter to the U.S. Department of Health and Human Services but had wanted a show of support from the legislators, who opposed the creation of the exchange in this year’s legislative session.

“At this point in time, it’s dead, and what I’m really hoping is that time will change people’s position and opinion,” Bradford said in an interview.

Arkansas can still apply for the grant by Dec. 30. Bradford said there was “maybe a 30 percent chance we can revive it.”

The exchange will be a website where Arkansans can shop and compare insurance plans. Federal subsidies will be available on a sliding scale for residents up to 400 percent of the federal poverty line. Insurance companies must offer the same benefit plans inside the exchange as outside so that they can’t place risky patients into the government-subsidized plan.

States are required to participate in operational exchanges by Jan. 1, 2014. If Arkansas doesn’t establish its own exchange, and if the PPACA survives a Supreme Court ruling, then Arkansans can participate in an exchange managed by the federal government, with the state having the option of setting up its own later.

Bradford said that isn’t a good option because the state will have lost out on years of grant money and will have to build its own system.

“What would happen in a couple of years if the feds operated it and we wanted it back, I would have to go to the Legislature and ask for multi-millions of dollars to pay for it, which I don’t think we have that ability as a state,” he said.

The department has been planning for the exchange using a $1 million exchange planning grant and was hoping to apply for the establishment grant this year, followed by a larger Level II grant in June 2012.

Bradford said the department is obligated to continue the planning process it has already started.

“We can probably stretch it out to maybe February or something like that with our team,” he said. “We’ve got a couple of employees here that are 100 percent funded by the grant, and the position goes away.”

At that point, Bradford guessed, the planning process would be about 20 percent complete, with the major infrastructure investments remaining.

Grants have been received by other states, including Mississippi, which received $20 million, and Missouri, which received $21 million. But many states are moving slowly or resisting it. In February, 21 Republican governors sent a letter to Health and Human Services Secretary Kathleen Sebelius expressing their opposition to participating in the exchange “in its present form” and demanding more flexibility in implementing it.

On September 27, six Arkansas Republican legislators sent a letter to Bradford indicating their continuing opposition to moving forward on the exchange, explaining that there were far too many unanswered questions about healthcare reform and that moving forward with the exchange would imply support for the PPACA, potentially undermining lawsuits against it.

“The implementation of the PPACA is not an action we would approach with haste – especially because it seems to be based on deadlines that might change and is funded by federal dollars that have giant federal strings attached,” they wrote.

One of the signees, House Minority Leader John Burris (R-Harrison), said in an interview that Republicans don’t want the state to participate in the system. He pointed out that Beebe could simply move the process forward without them.

“The governor is the only one that decides this,” he said. “Now, I can agree with his decision, but if he thought the policy of waiting is that bad, he is the sole decision-maker in this process, and so if he disagrees with our decision that badly and our advice that badly that he thinks it’s a detriment to the people of Arkansas, then he needs to apply for the grant…

“At the end of the day, we’re not going to have to call out the National Guard to implement healthcare exchange. I just don’t think we have to do it today.”

What the insurance exchange would look like administratively is still to be decided. It could be organized out of Medicaid, it could be a nonprofit, or it could be some combination of both that is housed in a state agency. “Navigators” will guide users toward their purchases but will not be allowed to actually sell the insurance.

Planners must deal with a variety of questions, including how to market the product to low-income residents, some of whom may not even have access to the Internet.

“The intent is everybody can go on the Internet and purchase their health insurance,” said Fred Bean of Little Rock’s Bean Hamilton Corporate Benefits, one of 21 members of a Health Benefits Exchange Steering Committee appointed by Bradford. “Unfortunately, health insurance is very complicated, and it’s hard to do without somebody advising you on, ‘Here’s the good, the bad and the indifferent.’ It’s just difficult.”

The steering committee, which involves members of the healthcare community and state government, began meeting every other week in mid-summer as part of an overall community-based effort involving about 120 people working in seven workgroups covering everything from information technology to communication.

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