Unanswered Questions Surround State Health Insurance Exchange

When the health insurance exchange begins its open enrollment period on Oct. 1, 2013, the state of Arkansas expects to be ready.

But until then, the 18 members of the Arkansas Federally Facilitated Exchange Partnership Planning steering committee are working to answer a number of questions involving the exchange, including how to get the word out about the program, which insurance companies are going to be in the exchange, and what procedures are going to be covered in the health exchange policies.

The members of the committee are appointed by Arkansas Insurance Department Commissioner Jay Bradford. Cynthia Crone serves as the chair and is director of health benefits exchange planning at the AID.

The management of the exchange fell to the U.S. Department of Health & Human Services after the Arkansas Legislature rejected the creation of an Arkansas-run health benefits exchange. Arkansas, though, will handle the consumer issues of the exchange, which involve marketing the exchange, and decide which benefits will be offered in policies that are in the exchange.

“The goal is to have a meaningful and, frankly, easy process for small businesses, but also for individuals who access the exchange,” said Kurt Knickrehm, a vice president at Regions Insurance who is on the steering committee. “Between now and October 2013, all kinds of things have to take place.”

The exchange is meant to make buying health insurance easier by allowing small businesses and individuals to shop online to see which insurance carrier has the best policies for their needs, including price comparisons.

In the next few months, the committee has to submit a blueprint to the U.S. Department of Health & Human Services outlining how it is going to handle the consumer protection functions of the exchange and how the committee will certify and monitor the health plans that are sold through the exchange, Arkansas Insurance Department spokeswoman Alice Jones said in an email to Arkansas Business.

The exchange will be up and running on Jan. 1, 2014, but it’s unclear how many of the 572,000 uninsured Arkansans will buy insurance from the exchange or face tax penalties.

Greg Hatcher, owner of the Little Rock insurance firm The Hatcher Agency, said he thinks most consumers who already have insurance won’t turn to the exchange to buy coverage.

“The exchange might, and I repeat might, be good for somebody who didn’t have health coverage before,” he said.

But state Rep. Barry Hyde, D-North Little Rock, said he thinks that a number of small businesses would push employees to the exchange because it would free up companies’ managers from having to deal with health insurance.

Under the Patient Protection & Affordable Care Act, which was signed in 2010 and earlier this summer survived a legal challenge in the U.S. Supreme Court, businesses with 50 or fewer employees don’t have to provide health insurance coverage to their employees. Larger companies, however, face a penalty of $2,000 per worker if they don’t provide insurance.

The premiums for the exchange haven’t been set yet, nor has it been decided which companies are going to be in the exchange. The carriers will make the decision on prices, which will have to comply with Arkansas Insurance Department regulations. Only Arkansas Blue Cross & Blue Shield and QualChoice of Little Rock have indicated they will be in the exchange.

State Rep. Mark Biviano, R-Searcy, who is also on the committee, said that not enough health insurance companies have agreed to be in the exchange in Arkansas.

“It’s not really a competitive exchange,” he said. “A true exchange will offer a competitive environment, and that’s not really what we’re doing.”

Although the premium prices haven’t been set yet, Jones said the prices should be affordable. Households with incomes under 400 percent of the federal poverty level — that is, $92,200 a year for a household of four — would receive tax credits to buy insurance.

Getting the Word Out

Knickrehm said one of the key issues the committee is working on is spreading the word about the exchange to people who probably never had health insurance and don’t understand how it works.

One way to reach them is through someone who acts as an adviser who will then help the uninsured find the right coverage. The advisers will act like an insurance agent but won’t be paid a commission, he said.

Knickrehm said he hopes that most of questions about the exchange will be answered by early next year.

“I’m optimistic,” he said. “But there are new revelations every day.”