Saying he doesn't want to "send a confusing message to the public and health care community," Gov. Asa Hutchinson asked a state board Monday to postpone plans to seek information on the cost of installing an Arkansas-based health insurance exchange for individual consumers.
In a letter Monday to the Arkansas Health Insurance Marketplace board, Hutchinson noted that he had already called for a "pause" on the development of such an exchange until state leaders decide on changes to the state's private option and other parts of its Medicaid program.
"Until more information is available and policy decisions have been made, it is premature for your organization to proceed with any development of a software solution," Hutchinson said in the letter.
He also expressed concern that, if the state decides not to go forward with the exchange project, it "may be required to pay back funds we have received from the federal government."
The marketplace board had planned to issue a request Monday for information on the cost of transferring to Arkansas the technology used by one of the seven state-based exchanges that the board considers to be successful.
Those states are California, Colorado, Connecticut, Kentucky, New York, Rhode Island and Washington.
In a Sept. 23 interview with the Arkansas Democrat-Gazette, Hutchinson said that the information request was "not inconsistent" with his request to halt work on the exchange project, although he was concerned that the state could have to pay back grant money.
In the letter Monday, he indicated that the information request would conflict with his request to halt work on the individual consumer exchange.
"While I appreciate the independent structure of your organization, I urge you to be responsive to the policy directives of the executive and legislative branches of our government," Hutchinson said in the letter.
After receiving Hutchinson's letter, marketplace Director Cheryl Smith Gardner said in an email to board members that she would wait for direction from them. The board is to meet today .
Sen. David Sanders, R-Little Rock, supports establishing the state-based exchange for individual consumers but said he didn't have a problem with Hutchinson's request.
"I think the governor just wants to make sure we have all the facts before we charge ahead," he said.
From its inception through Aug. 31, the marketplace board had spent a total of $5.6 million in federal grant money on developing exchanges for small businesses and individuals, according to a report presented at a board meeting last week.
That included $2.9 million from a $3.5 million planning grant awarded to the Arkansas Insurance Department in January 2014 to pay for planning efforts.
The board also has spent $2.7 million from a $99.9 million grant awarded late last year to pay for establishing the exchanges and up to a year of operating expenses.
The board had already modified its initial plans for soliciting information in response to requests from Hutchinson and Sanders.
At a meeting on Sept. 23, the board's information technology committee decided that cost estimates submitted by the companies would not be binding or a requirement for winning a contract for the project.
In an email, marketplace spokesman Heather Haywood said Tuesday that the board "has not received any communication or guidance" from federal officials on whether the marketplace would have to pay back grant money if it decides not to go forward with the exchange project.
Established under the 2010 federal Patient Protection and Affordable Care Act, insurance exchanges allow consumers to shop for coverage and apply for subsidies to help pay for it.
Arkansas is among 34 states with federally run insurance exchanges. The remaining states and the District of Columbia opted to set up their own exchanges.
The Arkansas Legislature created the marketplace board in 2013 to establish Arkansas-based exchanges for individual consumers and small businesses.
Proponents of the state-based exchanges say they would give the state more control over its insurance market and flexibility in making changes to the private option and other health care programs.
The state would also be allowed to set its own fees to support the exchanges' operations. Insurance companies now pay the federal government a fee equal to 3.5 percent of the premiums sold on federal exchanges.
The marketplace board's plans call for the small business exchange to open for enrollment on Nov. 1, and the exchange for individual consumers to begin enrollment next fall.
Hutchinson, who took office in January, said in his letter Monday that his request for a pause is not intended to stop work on the small-business exchange, which is being established under a $7.2 million contract with Reston, Va., based hCentive.
But Hutchinson said last month he hasn't heard a sufficient justification for establishing the exchange for individual consumers. He said he wants to wait until lawmakers decide on a replacement for the private option before making a final decision on the exchange project.
Under the private option, the state Medicaid program buys insurance on the federally operated health insurance exchange for more than 200,000 low-income adults.
As long as the cost of the private option stays below certain targets, the federal government is expected to pay the full cost of the program until 2017, when Arkansas will be required to pay 5 percent of the cost.
The state's share will then rise every year until it reaches 10 percent in 2020.
At Hutchinson's request, the Legislature earlier this year created a task force to recommend a program that will replace the option starting in 2017.
A report by the the task force's consultant, The Stephen Group of Manchester, N.H., is expected to be released at the task force meeting today.
A Section on 10/07/2015