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Arkansas health marketplace director resigns

Board chairman says vote in closed session authorized him to hire replacement by Andy Davis | January 26, 2019 at 4:30 a.m.

The director of the state agency responsible for Arkansas' health insurance exchange -- which pending legislation would fold under the state Insurance Department -- has resigned, the chairman of the agency's board said Friday.

"Now that the hard work of setting up and running the state health insurance exchange has concluded, I am taking the time to pursue new opportunities," Angela Lowther, director of the Arkansas Health Insurance Marketplace, said in a letter Thursday to board Chairman Brett Kirkman.

Kirkman said Friday that he was "surprised and disappointed" by the resignation.

"I've gotten to know Angela well over the past couple months, and I appreciate her effort and her knowledge," he said.

Lowther told the board during a meeting Friday in Little Rock that she was grateful for the chance to serve and that being director "has been a great learning experience."

"None of this would have been possible but for the people who are on the AHIM team right now," she said. "I have full confidence that, whatever comes next, this organization is healthy and robust enough to make it to the next phase."

Kirkman announced the resignation after the board met in a closed session for more than 45 minutes.

He said the board had voted to accept Lowther's resignation and had authorized him to hire a replacement, which could be a contractor, to ensure lawmakers "get all the information they need as they go through a decision-making process as to the future" of the agency.

[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]

The new director won't earn more than Lowther, whose annual salary was $150,000, he said.

The board's actions during the closed session appeared to be at odds with the Arkansas Freedom of Information Act, which requires a meeting to be open to the public when such votes are taken.

"No resolution, ordinance, rule, contract, regulation, or motion considered or arrived at in executive session will be legal unless, following the executive session, the public body reconvenes in public session and presents and votes on the resolution, ordinance, rule, contract, regulation or motion," the law says.

Kirkman said after the meeting that he would consult with an attorney about the requirement.

In her resignation letter, Lowther said she was following a requirement in the agency's employee handbook to give four weeks' notice and that her resignation would take effect Feb. 21.

In the meantime, Kirkman said Lowther won't be required to report to work but "will be available" to help as needed.

Gov. Asa Hutchinson didn't ask for Lowther's resignation, which came as a surprise to him, spokesman J.R. Davis said.

"He believes Angela's done a great job of managing the organization in a time of transition," Davis said.

Lowther declined to comment on her resignation after the meeting.

The Legislature created the marketplace in 2013 to set up state-run exchanges that individual consumers and small businesses would use instead of the federally managed

Under the 2010 Patient Protection and Affordable Care Act, such exchanges allow consumers to shop for coverage and apply for subsidies to help pay for it.

Using money from a $99.99 million federal grant, the Arkansas marketplace set up the small-business exchange in 2015.

But at Hutchinson's request during his first year in office, the agency scrapped its plans to use its remaining grant money to build an exchange for individual consumers. Instead, the marketplace took responsibility for certifying the plans sold through and for helping consumers sign up for them.

According to the Insurance Department, 62,731 Arkansans were enrolled in such plans as of Jan. 15.

Meanwhile, enrollment in the small-business exchange ended in 2017 because Arkansas Blue Cross and Blue Shield, the only company offering plans, dropped out.

Senate Bill 113, sponsored by Sen. Jason Rapert, R-Conway, would abolish the marketplace's board and transfer the agency's functions to the state Insurance Department.

The bill would follow a recommendation made in December by a subcommittee of the Legislative Council.

State Insurance Commissioner Allen Kerr has said the Insurance Department already carries out many of the same duties performed by the marketplace and would be able to take it over at an annual cost of no more than $571,500.

By contrast, the marketplace's spending totals about $2.6 million a year.

The move would allow the state to lower a fee paid by insurance companies that support's the marketplace as well as expenses associated with the federal website. Insurance companies pass the fee along to consumers in the form of higher premiums.

This year, the fee is equal to 4.25 percent of the premiums for the plans sold through A portion equal to 3 percent of the premiums goes to the federal government, and the marketplace keeps the remaining 1.25 percent.

Kerr has said the Insurance Department would eliminate the marketplace's share of the fee. Insurers would still pay a fee equal to 3 percent of the premiums to the federal government.

In the 34 states that don't have their own exchanges, insurance companies that sell plans through pay a 3.5 percent fee to the federal government.

Lowther, 38, became the marketplace's director in September 2017 after serving as interim director for about seven months. The previous director, Cheryl Gardner, resigned to become director of the agency in charge of New Mexico's health insurance exchanges.

A 2013 graduate of the University of Arkansas at Little Rock's William H. Bowen School of Law, Lowther worked as a personal-injury attorney for a year and a half before starting work at the marketplace in 2015 as an insurance carrier liaison. She was promoted in 2016 to director of policy and compliance.

Rapert, chairman of the Senate Committee on Insurance and Commerce, said he didn't have any involvement in Lowther's resignation, which he said doesn't affect the need for his bill.

He said he plans to present the bill to the committee on Tuesday.

"The reason that we're making a change is because of the policy and the efficiencies of [the Insurance Department] having oversight," he said. "It doesn't matter who was or was not the director."

A Section on 01/26/2019

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