Official explains lid on QualChoice cap

Arkansas Insurance Commissioner Jay Bradford said he has been tight-lipped about a Little Rock health-insurance company’s cap on enrollment through the state’s insurance exchange because he feared that the release of information about it could hurt the company competitively.

Bradford also said that he didn’t want to do anything to jeopardize Englewood, Colo.-based Catholic Health Initiatives’ acquisition of Qual-Choice Health Insurance and that completing the purchase has taken longer than expected.

“All this stuff was supposed to be resolved way back in December, where I wouldn’t have to be slow-walking you because of these protected issues,” Bradford said.

QualChoice and state officials publicly revealed the existence of the enrollment cap last week - more than six months after enrollment began in plans on the health-insurance exchange - in response to questions from the Arkansas Democrat-Gazette.

Records obtained through the state Freedom of Information Act show that Arkansas Surgeon General Joe Thompson and a state Insurance Department attorney discouraged other state employees from sending emails referring to the cap, saying it involved sensitive information.

The records also show Medicaid Director Andy Allison grew frustrated with the amount of time it took Catholic Health Initiatives, which owns St. Vincent Health System in Little Rock, to move forward with the acquisition.

“St. Vincent needs to decide whether they’re going to do this, and QualChoice needs to move on to another buyer if not,” Allison wrote in a Jan. 9 email to staff members at the Insurance Department and the state Department of Human Services.

“Collectively, their indecision is posing an impediment to the success of the Private Option. I’ve said as much directly to St. Vincent leadership.”

A spokesman for St. Vincent Health System referred questions about Allison’s comment and the enrollment cap to Catholic Health Initiatives, which declined to comment.

Human Services Department spokesman Amy Webb said, “We believe strongly that competition will drive success of the private option.

“Andy’s email simply is a reflection of a policy maker’s frustration with the pace of a merger that he felt could create a more robust and competitive marketplace by allowing QualChoice to be a bigger player in the Private Option.”

QualChoice is one of four companies offering plans on Arkansas’ exchange, which was established under the federal health-care overhaul law.

Under the so-called private option created by the Legislature last year, many adults who qualify for coverage under the state’s expanded Medicaid program can sign up for a plan on the exchange and have the premium paid by Medicaid.

The expansion extended eligibility to adults with incomes of up to 138 percent of the poverty level: $16,105 for an individual or $32,913 for a family of four, for instance.

Tax-credit subsidies are available to those who don’t qualify for Medicaid but have incomes of less than 400 percent of the poverty: $45,960 for an individual, for example, or $94,200 for a family of four.

Webb said last week that enrollment in QualChoice plans through the private option was halted in early November after it reached 1,280.

As of Feb. 6, the latest date for which enrollment information by the insurance company has been released, QualChoice’s total had fallen to 1,220 - less than 2 percent of the 87,061 people enrolled in the private option at that time.

Overall private-option enrollment has continued to grow, reaching 106,324 as of March 21 while the QualChoice private-option enrollment cap of 2,000 has remained in place.

An estimated 250,000 Arkansans are eligible for coverage under the expanded Medicaid program, including 225,000 - those without exceptional health needs - who would qualify for the private option.

QualChoice Chief Executive Officer Michael Stock said it was “disappointing” that the acquisition has taken longer than expected, but he said the company still hopes to increase its enrollment after the purchase is approved by the Insurance Department, which he expects to happen by the end of this month.

“We still think there’s opportunity remaining from that segment of the population,” Stock said. “There’s still another 100,000 plus out there” who have yet to enroll.

In 2015, he expects Qual-Choice to offer plans on the exchange in every county in the state. This year, the company’s plans are only available in 51 of the state’s 75 counties.

He added that people enrolled in the private option can change plans every year.

“It’s not like they’re gone forever,” he said.

The enrollment cap, requested by Stock in a July 31 letter to Bradford, the insurance commissioner, limits QualChoice’s overall enrollment through the exchange, including non-Medicaid enrollees, to 10,000.

Because the Insurance Department didn’t have a way to limit enrollment through the federal portal, healthcare. gov, QualChoice’s private-option enrollment cap was set at 2,000, Stock said.

To ensure that the limit wasn’t exceeded, QualChoice’s enrollment was stopped on Nov. 5, after 1,000 food stamp recipients were automatically assigned to Qual-Choice plans.

The food-stamp recipients had indicated they wanted coverage, but had failed to choose a plan on their own within 12 days.

Since Oct. 1, tens of thousands of applicants who have been approved for coverage but failed to choose a plan have been automatically assigned to the other companies’ plans under a formula designed to ensure a minimum market share for each one.

Because enrollment in QualChoice plans among those who don’t qualify for Medicaid has been slow, QualChoice’s overall enrollment through the exchange is less than 3,000 - well below its 10,000-person cap, Stock said.

He said the cap was needed because QualChoice didn’t have the reserves, or capital, to support a large increase in enrollment.

That capital is expected to come from Catholic Health Initiatives after its purchase of QualChoice is complete, he said.

Stock said he initially expected that to happen a month or two after enrollment started Oct. 1. The discussions between Catholic Health Initiatives and Qual-Choice’s other investors - TriZetto Corp., the University of Arkansas for Medical Sciences, Tenet Health System Medical Inc. and Arkansas Children’s Hospital - took longer than that, primarily because of logistical and scheduling challenges, Stock said.

Catholic Health Initiatives “is a very large corporation,”Stock said. “This transaction wasn’t the only thing on their plate.”

In addition to stopping assignments to QualChoice, the Human Services Department removed the company’s plans from the options listed on a state website, insureark.org.

The list of plans on the site is generally only visible to those who have been approved for Medicaid coverage through the private option and have been issued an identification number.

Emails from the Human Services Department and the Insurance Department indicate that at least some QualChoice executives and Insurance Department staff members didn’t learn about the plans’ removal from the website until two months later.

In a Jan. 8 email to Insurance Department attorney specialist Zane Chrisman, QualChoice General Counsel Jennifer Smith said that QualChoice had been notified a day earlier by a broker about the plans’ absence from the site.

Bashorat Ibragimova, health-information systems manager for the Medicaid program, confirmed in an email to Chrisman that the plans were no longer shown, explaining that the website “cannot make that choice available for only a handful of people if we have to turn it off again, given a large volume of daily traffic to the site.”

After Ibragimova inquired about the cap in an Oct. 16 email, Thompson, the surgeon general, suggested in a reply that the discussion be taken “off line” because of “sensitivity issues.”

Chrisman expressed similar caution in an email on Nov. 4.

“Please do not send emails about caps on coverage,” she wrote. “This information is especially sensitive to the plans and afforded the highest confidentiality.”

The next day, when enrollment in QualChoice plans was stopped, Thompson suggested in an email that the Insurance Department prepare a public statement about the cap.

However, Thompson and Bradford said they don’t think such a statement was prepared.

After receiving a Nov. 5 email from an Arkansas Times reporter inquiring about why QualChoice’s enrollment was so low, Webb responded with an email referring the reporter to the Insurance Department.

Insurance Department spokesman Heather Haywood said her records show that the reporter spoke to Bradford on Nov. 6.

Bradford said he didn’t recall speaking to the reporter about the issue.

Sen. Jonathan Dismang, R-Searcy, who was a sponsor of the law creating the private option, said last week that he didn’t know about the cap and called the situation “frustrating.”

Sen. David Sanders, R-Little Rock, said he did know about it but didn’t realize that QualChoice’s enrollment was stopped at such a low level.

He said he supports the cap as a way of allowing QualChoice to offer plans on the exchange while the acquisition discussions were being conducted.

“I am generally encouraged by what I see happening in the marketplace with them, and I think 2015 is going to be an important year,” Sanders said.