LITTLE ROCK — Republican opposition to a state-run health insurance exchange seems to remain strong after declarations last week by incoming leaders of the state House and Senate that they would gauge interest of fellow legislators.
Sen. Michael Lamoureux, R-Russellville, the incoming Senate president pro tem, and Rep. Davy Carter, R-Cabot, House Speaker-designate, said they expected to meet with Beebe this week to discuss the issue, but so far they had not seen any support for a state-run insurance exchange among Republicans, who will be in the majority in the Legislature next year for the first time since Reconstruction.
“I haven’t had any member of the Legislature say that they’re dying to have a state exchange,” Lamoureux said.
Under the federal Affordable Care Act, every state is required to have an insurance exchange — a marketplace where people and small businesses can shop for insurance plans — in place by Jan. 1, 2014. If a state does not set up an exchange, the federal government will set up one for it.
Gov. Mike Beebe said last year that because of Republican legislators’ opposition, Arkansas would not pursue a state-run exchange and instead would pursue a state-federal partnership to operate the exchange.
But after the Obama administration recently extended the deadline for states to decide on their course of action to Dec. 14 — at the request of the Republican Governors Association — Beebe said he would revisit the issue and see if Republican legislators in Arkansas were more receptive to the idea of a state-run exchange.
GOP legislators told the Arkansas News Bureau they believe many important questions remain unanswered, including the potential cost to the state.
“We just don’t have a good grasp of the cost,” said Sen. Johnny Key, R-Mountain Home.
Rep. John Burris, R-Harrison, said a state-run exchange would “potentially obligate the state to millions of dollars of expenses down the road.”
Cynthia Crone, who is in charge of planning Arkansas’ exchange for the state Insurance Department, said the federal government is covering the cost to create the exchange. Continuing operating costs of a state-run exchange would not be a burden on Arkansas taxpayers, she said, because fees collected from the insurance plans sold through the exchange would cover those costs.
“It’s in the federal law that the exchanges must be self-sustaining, without new government revenue,” she said.
Republican legislators also said creating a state-run exchange would make Arkansas businesses subject to penalties for not providing affordable insurance to employees — penalties they may not be subject to under a federal exchange.
“By having a federal exchange you supposedly can avoid some of the harsher impacts,” Lamoureux said.
“In the federal exchange, I don’t think there is that penalty,” said Sen. Cecile Bledsoe, R-Rogers.
Crone said the same penalties apply whether the exchange is run by the state, the federal government or a partnership between the two.
“I really don’t know what they’re talking about,” she said.
Lamoureux said his assertion was based on things he had been told by other members of the Legislature, including Bledsoe.
Bledsoe cited as a source an article by Michael Cannon, director of health policy studies for the Cato Institute, a libertarian think tank.
Republican lawmakers also question what the state has to gain by implementing its own exchange.
“To this point I haven’t heard a compelling reason for us to do a state exchange,” said Rep. Duncan Baird, R-Lowell.
Sen. Jonathan Dismang, R-Searcy, said he is “waiting on the argument to be presented why this is what we have to do for the state of Arkansas and why it’s better that we do a state-run exchange for the state of Arkansas. I really haven’t heard a solid argument.”
Crone said that if the state sets up and runs its exchange, it will be able to set eligibility requirements, conduct enrollment and create a call center in Arkansas that can help Arkansans navigate the system.
She said she understands that some are philosophically opposed to the entire concept of the insurance exchange, but she views it differently.
“Consumers would have access to care, hospitals would have payment for care, there’d be less uncompensated care, there’d be more employment, more dollars, healthier people,” she said.
Whatever type of exchange Arkansas chooses, it will have company. As of Wednesday, 17 states and the District of Columbia had opted for state-run exchanges, 16 states had opted for federal exchanges and five states besides Arkansas had started planning for a partnership.
Eleven states were undecided.