The U.S. Supreme Court's ruling Thursday in a case involving the federal health care overhaul law allowed more than 48,000 Arkansans to continue receiving help with their health insurance premiums and removed a barrier to the establishment of Arkansas-based health insurance exchanges.
But in a written statement, Republican Gov. Asa Hutchinson called the ruling "disappointing."
"I am convinced now more than ever that we need to proceed with caution to measure the costs to the taxpayers and the reliability of the outcome as we consider the potential of a state exchange," Hutchinson said.
He said his office would continue to work with a legislative task force to "find innovative solutions for Medicaid and healthcare reform."
Hutchinson spokesman J.R. Davis said the governor supports giving the state "maximum flexibility as to our work toward a solution for the state, but the final decision should be based upon long-term costs and the requirements of any recommendations coming out of the task force."
The governor has no plans to call a special session of the Arkansas Legislature on the issue "at this time," he said.
In a 6-3 ruling, the Supreme Court rejected a lawsuit's contention that the 2010 Patient Protection and Affordable Care Act did not authorize tax-credit subsidies in Arkansas and 33 other states that have not set up their own health insurance exchanges.
The lawsuit cited language in the federal law indicating that the subsidies are available only through exchanges set up by states.
Since 2013, the Arkansas Health Insurance Marketplace, a nonprofit organization created the state Legislature, has been working to establish state-based exchanges in Arkansas.
But Act 398, passed by the Legislature this year, prohibited the Arkansas marketplace from implementing the state-based exchanges until the Supreme Court had ruled on the legality of the subsidies.
If the court had ruled in favor of the plaintiffs, the move to state-based exchanges would have required approval by the Legislature.
Sen. Jim Hendren, R-Sulphur Springs, the sponsor of Act 398 and chairman of the legislative task force studying changes to the state's Medicaid program, noted that several states that set up their own exchanges have struggled to fix faulty computerized enrollment systems and to raise enough revenue to cover expenses.
"I'm not convinced that any state has really done a tremendous job of implementing an exchange," Hendren said.
The Arkansas marketplace organization should "proceed with extreme caution," he said, noting that "there's some roadblocks the Legislature could throw up in the path of [a state-based exchange] if they're not convinced it's the best path forward."
The governor in his statement took issue with the Supreme Court's reasoning, saying, "I am surprised at the lengths to which this court will go in an effort to stretch statutory interpretation to uphold the Affordable Care Act."
Created by the Legislature during this year's session, the Health Reform Legislative Task Force expects to make its recommendations by the end of this year.
Among the changes it is exploring is a replacement for the state's private option, which uses Medicaid funds to buy health coverage on the insurance exchange for low-income Arkansans.
Sen. David Sanders, R-Little Rock and a member of the task force, has said that the establishment of state-based exchanges will give legislators more flexibility as they craft the changes.
States that establish their own exchanges also decide what fees to charge to support the exchanges' operations.
In Arkansas and other states with federal exchanges, the federal government charges insurance companies a fee equal to 3.5 percent of the premiums of plans sold on the exchanges.
The Arkansas Health Insurance Marketplace's board has recommended that the Legislature replace the federal fee with a 3 percent state fee starting next year.
Sanders said federal officials have indicated that the federal fee will increase.
"There are a lot of states that are in a very, very unfortunate position long-term. Arkansas is not in that position," said Sanders, who is chairman of a committee monitoring the Arkansas marketplace.
According to a report by the Menlo Park, Calif.-based Kaiser Family Foundation, about 6.4 million people, including 48,100 in Arkansas, were receiving tax-credit subsidies as of March 31 in the states that use federal exchanges, which are accessible through the healthcare.gov website.
The tax credits are available to many people who don't qualify for Medicaid and who have incomes of less than 400 percent of the poverty level: $46,680 for an individual, for instance, or $95,400 for a family of four.
The average tax credit for an Arkansan who qualified and had selected a plan as of Feb. 22 was $280, according to the U.S. Department of Health and Human Services.
The credit reduced the average monthly premium for those Arkansans by 72 percent, from $389 to $109.
Using money from a $99.9 million federal grant, the Arkansas Health Insurance Marketplace plans to establish an Arkansas-based exchange for small businesses for coverage that will start as early as Dec. 1 and an exchange for individual consumers for coverage starting in 2017.
Act 1500 of 2013, which created the marketplace, allows the nonprofit to take over responsibility for the state's exchanges from the federal government as soon as Wednesday if the Arkansas-based exchanges have been approved by the U.S. Health and Human Services Department.
In preparation for the Supreme Court ruling, the governors of Delaware and Pennsylvania submitted letters to Health and Human Services Secretary Sylvia Burwell asking for approval to be considered for state-based exchanges while continuing to use the federal enrollment system and website.
Pennsylvania Gov. Tom Wolf said in a statement Thursday that he would withdraw his request in light of the Supreme Court ruling.
The Delaware Department of Health and Social Services said in a news release that officials in that state are continuing to evaluate the state's options.
Larry Levitt, a senior vice president at the Kaiser Family Foundation, said the Supreme Court ruling "removes a major incentive for states to set up their own exchanges" and may clear the way for some states with faltering state-based exchanges to join states such as Oregon and Nevada in abandoning their computerized enrollment systems in favor of using the federal system.
He noted that the Affordable Care Act prohibited the Health and Human Services Department from awarding grant money for the establishment of state-based exchanges after Jan. 1, 2015.
"If the decision had gone the other way, I think states would have scrambled to try and set up their own exchanges and keep the subsidies flowing," Levitt said during a conference call with reporters. "Now it may look like more of a hassle than an opportunity."
Arkansas Senate President Pro Tempore Jonathan Dismang, R-Searcy, said state lawmakers are studying whether Arkansas should move forward and will want a say on the issue.
In the meantime, the marketplace board should continue "to look and explore and see what their best recommendation is going to be for the state," he said.
Rep. David Meeks, R-Conway, said he opposes establishing the state-based exchanges but doesn't think opposition among other legislators is strong enough to stop them from being implemented.
"I'm just disappointed in how it turned out, but we'll go forward and continue to fight," he said.
A Section on 06/26/2015