LITTLE ROCK — If Arkansas were to obtain an “innovation waiver,” it could continue to push the envelope on health care coverage, the executive director of the Arkansas Health Insurance Marketplace told a legislative panel Tuesday.
Testifying before the House and Senate committees on insurance and commerce, Cheryl Smith said Section 1332 of the federal Affordable Care Act allows states to apply for waivers giving them wide latitude in varying from the requirements of the ACA, provided the law’s goals are met.
“You have to have as many insured (as without a waiver),” Smith said. “Well if you can do that, kind of the sky’s the limit. If you can dream it, you can do it.”
She added, “If there’s a state that’s demonstrated they are willing to push the edge of the envelope, it’s Arkansas.”
Arkansas already has varied from the health care law by implementing, with the federal government’s permission, the so-called private option, a variation on Medicaid expansion in which federal Medicaid money is used to subsidize private health insurance for people earning up to 138 percent of the federal poverty level.
Smith, the former director of Utah’s health insurance exchange, or marketplace, began her current position in May. In her testimony Tuesday she praised the private option and encouraged the legislators to begin thinking about new policy innovations they may want to pursue.
Under current law, innovation waivers will become available in 2017. Smith noted that a new president will have been elected by then and acknowledged that “I don’t know what the future holds.”
“They could decide they want 10 other waivers under the umbrella,” she said, but she told the panel she doubted that would happen because the federal government generally has been supportive of state innovation and state control.
“The federal government never saw themselves having to run the exchange in 30 or more states,” she said.
The federal government is facilitating Arkansas’ insurance exchange. Smith and the exchange’s board of directors are developing plans for a switch to a state-based exchange, should the state choose to seek permission to make the switch.
Sen. David Sanders, R-Little Rock, said one state that has said it will pursue an innovation waiver is Vermont, which is seeking to implement a single-payer health care system. He asked Smith if “just as one state can go in one direction, another state can go in the opposite direction, which is to push for consumerism.”
Smith said that was correct and said the federal government has been supportive of Vermont’s plans.
“That should give you a good indication of how far they’re willing to let states go in this kind of innovation, and so I would encourage you to think big,” she said.
Rep. David Meeks, R-Conway, said some state-based exchanges have been failures that wasted millions of taxpayer dollars and asked Smith if Arkansas is learning from those states’ mistakes.
Smith said it is. She said mistakes that some states have made include trying to do too much too soon, allowing marketplace directors to make “unilateral” decisions and going with the lowest bidder for important components such as technology.
Because Arkansas’ exchange is run by a quasi-governmental nonprofit entity, it can set its own criteria for procurement and is not obligated to choose the lowest bidder, Smith said.