A legislative committee on Thursday decided to wait until next month to make a recommendation on the fee that a state agency will charge insurance companies offering health coverage in the state through healthcare.gov in 2020.
Members of the Legislative Council's Arkansas Health Insurance Marketplace Oversight Subcommittee said they wanted more information on why the fee is scheduled to increase next year, the fees charged by health insurance exchanges in other states and how the fee will affect the agency's reserves.
Rep. Deborah Ferguson, D-West Memphis, a co-chairman of the subcommittee, said the Bureau of Legislative Research is also reviewing Insurance Commissioner Allen Kerr's claim that his department could lower the fee by taking over the marketplace's duties.
Arkansas Health Insurance Marketplace officials on Thursday continued to challenge Kerr's estimate of how much the move would save the state.
"Is there going to be a little bit of savings? Sure," said Mark Meadors, vice chairman of the marketplace's board of directors. "But we feel like it's not enough at this time to warrant moving AHIM underneath anybody."
Created by the Legislature in 2013, the marketplace certifies the plans sold in the state through the federal website, promotes enrollment and pays for a call center with operators that help consumers sign up.
Money for the agency's operations come from a fee equal to 3 percent of the premiums of the plans sold through the website.
Two-thirds of the money collected goes to the federal government to pay expenses associated with the website, and the marketplace keeps the rest.
Next year, the fee is set to increase to 4.25 percent. That includes an increase in the federal fee from 2 percent to 3 percent of the insurance premiums and an increase in the marketplace's portion from 1 percent to 1.25 percent of the premiums.
In September, the marketplace's board recommended against raising the fee in 2020.
Act 1500 of 2013 requires the Legislative Council to review the board's recommendation and submit its findings to the leaders of the House and Senate by Dec. 1.
Subcommittees of the council usually don't meet in November, Ferguson said, but she said she would ask for a meeting to be scheduled so that a recommendation can be made to the council before the Dec. 1 deadline.
The marketplace is designated as the entity in charge of Arkansas' health insurance exchange. Under the 2010 Patient Protection and Affordable Care Act, such exchanges allow consumers to shop for health plans and apply for federal subsidies to help pay the premiums.
In states that don't have their own health insurance exchanges, insurance companies that sell plans through healthcare.gov pay the federal government a 3.5 percent fee.
At a subcommittee meeting last month, Kerr said the Arkansas Insurance Department could operate the state exchange at an annual cost of $505,000 to $571,000, compared with the $3.8 million that the marketplace spent in the fiscal year that ended June 30.
The savings would be great enough that the department could pay the costs from its current budget, eliminating the need for the state to collect a fee, Kerr said. As a result, the overall fee would be reduced to 3 percent, which would go directly to the federal government.
Marketplace Director Angela Lowther on Thursday said the marketplace has already started reducing the amount it spends, and she questioned Kerr's assertion that he would not need to add any staff members except for one or two call-center operators.
"That's just a position where we differ," she said.
Metro on 10/19/2018