Beebe signs ‘private option’ into law; what happens now?


LITTLE ROCK — Gov. Mike Beebe signed legislation Tuesday to expand health care coverage in Arkansas, the culmination of months of bipartisan development of a plan to purchase private insurance for thousands of low-income workers under the federal Affordable Care Act.

Beebe and other supporters of the plan said the work is just beginning. So what happens now?

The new program proposes to use federal Medicaid dollars to subsidize the purchase of private health insurance for an estimated 250,000 people with annual incomes of up to 138 percent of the federal poverty level — $15,856 for an individual, $32,499 for a family of four — through the state’s health insurance exchange rather than adding them to the Medicaid rolls. Officials also expect another 211,000 people who are currently uninsured to enroll.

John Selig, director of the state Department of Human Services, said his agency will soon seek federal waivers to implement the plan and will work with the state Insurance Department to prepare providers who will offer coverage through the insurance exchange, a marketplace where people and small businesses can shop for insurance plans that fit their needs. The exchange is to begin enrolling people on Oct. 1.

The legislation Beebe signed Tuesday specifically states that the federal government must approve all aspects of Arkansas’ so-called “private option” before any aspect of it goes into effect. It specifies that the program would end within 120 days if the federal government ever changes the amount it will pay towards the insurance premiums.

“The most important thing … is to get information to the Department of Insurance so they can get information to the potential carriers in the exchange about how this will work, who is in it, who is out, what the cost share is,” Selig said.

He said state officials will submit the plan to U.S. Department of Health and Human Services officials next month to “see if they have any questions, so when they do get the waiver they won’t be surprised.”

Beebe has said more than once that his staff has been in touch with HHS officials to make sure they are aware of the plan and to be sure it met their requirements for approval, especially last week when it was amended before it was passed by the Legislature.

“Now the real work begins,” said Cynthia Crone, director of the state’s exchange planning effort.

Crone said a group from the Insurance Department will meet next week with officials with the federal Centers for Medicare and Medicaid Services to seek initial reaffirmation agreements going forward so we can notify insurers mid-May.

“We’ve got to be able to align the subsidy and the Medicaid folks to make sure that everybody is happy,” she said.

Crone also said June 30 is the deadline for insurance companies to apply to participate in the insurance exchange. She said four companies have written letters of intent to apply to provide medical insurance and four have sent letters of intent to apply to provide dental coverage.

At least 535 people will be trained and licensed to assist consumers with enrolling for insurance coverage through the exchange. The coverage is scheduled to begin Jan. 1.

Sen. David Sanders, R-Little Rock, one of the architects of the private option, said the Legislature will have some oversight on the new health care expansion law.

“I will be meeting with DHS officials weekly on the implementation of this,” and the Legislature will consider another appropriation for the program during its 2014 budget session, Sanders said.

Along with providing health insurance to 250,000 Arkansans, the new program also is expected offset millions of dollars in Medicaid rate cuts to hospitals across the state and save businesses with more than 50 employees about $35 million in penalties for not purchasing insurance for their employees.