What Does Hutchinson's Latest Pick Mean For The Private Option?

Dec 18, 2014

Allen Kerr

Governor elect Asa Hutchinson's recent announcement that he will appoint State Representative Allen Kerr to be Arkansas's next Insurance Commissioner could weigh significantly on the fate of Arkansas's Private Option.

With a Legislative session less than a month away, speculation about what will become of the private option hasn't included a specific plan from anyone, but there is wide-felt certainty that the new administration will bring changes.

“In theory it was a good idea, in practice, it leaves a lot to be desired,” says Allen Kerr, the state's next Insurance Commissioner.

Kerr has been in the insurance and financial services industries for 34 years, according to a statement from Governor-elect Hutchinson. He'll oversee the state Insurance Department, which regulates the industry and serves as a consumer advocacy arm of state government. It also oversees the State Health Insurance Marketplace and, along with the Department of Human Services, aspects of the Private Option. Kerr is now concluding his term as a Republican in the state House of Representatives. In the 2013 Regular Session, Kerr voted to fund the Private Option. More recently, in the 2014 Fiscal Session, he voted against funding.

“I mean it's silly to to put something in place for the consumer if the state can't afford to pay for it,” he says.

Concerns about cost, and stigma surrounding the federal healthcare law, through which the Private Option became possible, continue to hamper hopes for the program. Already, the new commissioner's attitude toward the program differs widely from that of the outgoing commissioner. Can the Legislature once again produce enough votes for a 75 percent super majority to pass an appropriations bill in the new year?

“They certainly have the right and the ability to evaluate what's best for Arkansans. I think they'll make some changes and some of them are probably necessary and then we'll go forward,” says outgoing Insurance Commissioner Jay Bradford, a former legislator himself.

Bradford remains an advocate of the program. He says that while the private option's costs per-enrollee continue to hover above projections, costs have also been slowly but steadily decreasing in recent months. He says this should convince legislators of the program's viability. Not to mention the help it has given poor Arkansans.

“We've got over 200,000 people that have taken advantage of the private option. These are people who have not had health insurance before. They're young people. They're basically in pretty good health and they're working people,” says Bradford.

Bradford notes the 200,000 private insurance plans purchased using federal Medicaid money, pooled with the nearly 40,000 middle and higher income people who've purchased plans on the Marketplace, have reduced average rates for premiums by about 2 percent this year. Still, the share the federal government pays for will decrease in coming years, with the state beginning to pick up a sliver of the cost. For incoming Insurance Commissioner Allen Kerr, that may just be too much for the state to handle.

“I'm hoping we can continue with what we've got now rather than start something new. Cost is, with everything, going to be the major concern,” he says.

Kerr couldn't elaborate on what specific changes the Hutchinson administration may be planning. But Hal Bass, a political science professor at Ouachita Baptist University, notes the Administration is in a unique position, working with mostly Republican legislators who don't necessarily have a unified view of things.

“It strikes me the challenge that Governor Hutchinson and Mr. Kerr [will have to] face, is to figure out a way to re-package and re-label the private option concept in a way that makes it more palatable to Republican legislators,” He says.

The Legislative session begins January 12th.