Arkansas's Private Option Meeting Projections But Hang-Ups Persist

Jan 23, 2014

Joint Meeting of the Public Health, Welfare and Labor Committees
Credit KUAR

Members of the Public Health, Welfare, and Labor Committees met to get the most recent updates on the insurance program designed to provide coverage to nearly 250,000 low-income residents. These updates and continued questions are being pursued in the lead up to the legislature’s decision next month on whether or not to reauthorize funds for the private option.

State health officials said cost projections are on track so far. Republican Charlotte Douglas of Alma asked Andy Allison of DHS about the private option’s effect on cost throughout the insurance marketplace.

“So you would anticipate that possibly our actuaries, after we get all this in, we have a younger population and we feel like they may be healthier that maybe our premiums will go down,” asked Douglas.

Allison answered, “That’s precisely my hope.”

Arkansas Surgeon General Joe Thompson followed up on Allison’s answer.

“It’s more than a hope it’s a logical extension of having younger people in the risk burden, decreases your health burden and will cause over time for you to have less of a death spiral on premium cost which is what many employers found themselves in before we underwent the payment improvement and insurance expansion effort that we’re in the middle of right now,” said Thompson.

Officials provided additional arguments for continuing the program by mentioning a report shared earlier this week by the Arkansas Chamber of Commerce. The report argued failing to reauthorize funds for the program would mean an extra burden for businesses costing between $27 and $40 million. Officials said without the private option’s coverage businesses would have to cover those making between 100 and 138 percent of the poverty line when the employer mandate of the Affordable Care Act begins in 2015.

Republican Jane English of North Little Rock found it incredulous businesses would desire to pass the burden to taxpayers.

“I find it very hard to believe that business people throughout the state of Arkansas would actually say, I don’t want to have to provide insurance and follow those mandates and pay these costs, I would rather have my employees go on the private option so I don’t have to pay those costs which is going to save businesses here in the state of Arkansas $38 million. I find that very hard to believe,” said English.

English’s colleague from Rogers, Cecil Bledsoe partially dismissed concerns of business saying it might be the case the mandate is removed altogether. State health officials, as in the past, are saying they expect and plan around the continuation of most provisions of the Affordable Care Act.

As of last report supporters of the private option are one vote shy of the three-quarters vote needed to re-authorize funds in the state senate. Proponents of the plan lost one vote in a special election in Jonesboro and since then Republican Missy Irvin of Mountain View has said reductions in compensation to some specialists has made her withdraw her support. Irvin remained quiet Thursday but Senator Jason Rapert voiced her concerns.

“As you know, several members have been surprised by the 15 percent reduction in payouts to specialist doctors,” said Rapert.

He continued pressing the health officials present before the committee.

“This is one issue where you know you’re losing support and I encourage you to either fix it or give us some kind of reason that will allay our fears,” said Rapert.

Surgeon General Thompson responded saying it’s not his place to defend or comment extensively on a carrier’s contracting decision with providers but in his opinion it is a step away from fee for service models and toward rewarding follow up care.

Throughout the meeting it was clear state health officials stand by the successes of the private option and the accuracy of their predictions. Most lawmakers aren’t contesting figures but a critical few are expressing continued doubts as the deadline to reauthorize funding for the private option approaches.

Further Notes:

Arkansas Surgeon General Joe Thompson said newly issued coverage is working.

“Providers are seeing individuals hitting their doors that are with new coverage. Anecdotally we are seeing individuals have significant clinical conditions be addressed that historically were not addressed and that would have been potential catastrophes that would have hit as uninsured, uncompensated cost on the rest of the health care system. So, I think the intent of passage a year ago is starting to unfold in the clinical delivery system,” said Thompson.

DHS Director John Selig agreed with Thompson saying private option premiums of $467 a month, paid in full with federal funds for three years, are meeting DHS’s calculations.

“I think there were concerns when people were talking about expansion, talking about the Private Option that somehow, I saw predictions that it would be $900 a month, people were very concerned there would be high rates. We just haven’t seen that the actual numbers that we’re seeing are just almost right in line with what the actuaries predicted back in March when the bill was up. We’re pleased that they are coming in on target,” said Selig.