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Arkansas health insurance exchange / marketplace

Will Arkansas transition to a state-run exchange or stay with Healthcare.gov?

The path to a state-run exchange

On June 15, Arkansas was one of three states that got conditional approval from the Obama Administration to operate a state-run exchange (the state currently has a partnership exchange, which is considered federally-run).  At that point, the outcome of King v. Burwell was still up in the air, and there was a distinct possibility that subsidies for 50,000 people in Arkansas could have evaporated if the Supreme Court had ruled that subsidies were not legal in the federally-run exchange.

Although the state formally submitted their intent to establish a state-based exchange this spring, they’ve been in the process of working towards a state-based exchange since 2013.  The board of the Arkansas Health Insurance Marketplace voted in mid-September 2014 to transition from its current partnership exchange to a state-run exchange.  The plan was to have the Arkansas-run marketplace operational for individual for open enrollment in the fall of 2016, with coverage beginning in 2017. Small businesses were to be able to begin enrolling through the state-run exchange in the fall of 2015.

However, in March, lawmakers passed Senate Bill 343, which requires the state to wait to proceed with establishing a state-run exchange until after the King v. Burwell ruling is announced.  That put the Arkansas Health Connector‘s transition to a fully state-run model on hold, although lawmakers and the exchange board continued to work on the details of how the state-run exchange would work.  The Arkansas exchange board had hoped that currently-enrolled small businesses would be seamlessly transitioned to the state-run exchange, but CMS notified the state that they will not be able to transfer the data, and small businesses would have to re-enroll through the new exchange, assuming it is established.

Uncertainty following King verdict

On June 25, the Supreme Court ruled that subsidies are legal in the federally-run marketplace, which means there is no longer a concern that subsidies could evaporate and insurance markets could destabilize in states that use Healthcare.gov.  Although the state has been working towards a state-based exchange for some time, and has obtained almost $100 million in federal funding to make the switch, the Court’s ruling certainly removes some of the incentive to proceed with the transition, since subsidies are safe regardless of how the exchange is structured.

Following the Supreme Court’s decision, Arkansas Governor Asa Hutchinson asked the state to reconsider whether the move to a state-run exchange is still the best course of action:  “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.

As of late June, it is unclear whether Arkansas will continue its path towards a state-run individual exchange in 2017, or continue to use Healthcare.gov.

2016 rates – no double-digit hikes on exchange

Healthcare.gov has a comprehensive rate review tool where proposed double-digit rate increases for 2016 can be viewed for each state, although requests for rate increases of less than ten percent are not displayed.  In Arkansas, there are only two proposed rate hikes of ten percent or more, and they’re both for off-exchange plans (Coventry and UnitedHealthcare).  Of the five carriers that sell policies in the state exchange, none have proposed double-digit rate increases.

2015 enrollment data

65,684 Arkansas residents signed up for health insurance on HealthCare.gov between Nov. 15 and Feb. 22 according to the U.S. Department of Health and Human Services (HHS). 44 percent were new to the exchange for 2015, and 88 percent qualified for premium subsidies.

2015 open enrollment for 2015 had ended.  There are some other conditions under which people can apply for health insurance coverage before the next open enrollment period, but they must have a qualifying event in order to purchase coverage outside of open enrollment, on or off the exchange.  Enrollment is open year-round for Native Americans and for people who qualify for Medicaid.

Otherwise, the next open enrollment period begins November 1, for coverage that will take effect on January 1, 2016.

Arkansas carves own path on ACA

Arkansas has not followed the pack in its approach to implementing the Affordable Care Act, and it has continued that trend with its path towards the possibility of a state-run exchange (Idaho is thus far the only state that has transitioned from Healthcare.gov to a state-run exchange).

States that relied on the federal marketplace for some or all functions outnumbered states that ran their own exchanges in 2014. For 2015, only Idaho moved to a state-run exchange, while Oregon and Nevada increased their reliance on the federal marketplace.

Arkansas’ transition toward a state-run marketplace is not its only atypical move. Arkansas was one of just a few states that implemented a state-federal partnership for 2014. The state also pioneered the Private Option for Medicaid expansion. However, with Republicans now holding large majorities in both houses of the state legislature, Arkansas may lead in the opposite direction by becoming the first state to drop out of Medicaid expansion.

Premiums lower in 2015

The Arkansas Insurance Department announced 2015 premiums are two percent lower on average compared to 2014 rates. You can browse plans and premiums available in your area by visiting HealthCare.gov and entering your ZIP code.

Arkansas Health Connector enrollment in 2014

Signups for qualified health plans (QHPs) in Arkansas totaled 43,446 during 2014 open enrollment. Among Arkansas residents selecting a QHP, 90 percent qualified for financial assistance, compared to 85 percent nationally. An HHS report released in June showed the average monthly premium, after tax credits, for Arkansas consumers was $94. Thirty-five percent of enrollees who received subsidies in 2014 saw their premiums reduced to $50 or less per month.

Nineteen percent of Arkansas residents selected a bronze plan (20 percent nationally), 67 percent selected a silver plan (65 percent nationally), 13 percent selected a gold plan (9 percent nationally), 0 percent selected a platinum plan (5 percent nationally) and 1 percent selected a catastrophic plan (2 percent nationally). Twenty-five percent of Arkansas enrollees were between the ages of 18 and 34.

Arkansas’ historical approach to the marketplace

The Arkansas legislature considered a bill to establish a state-run exchange during the 2011 session, but it did not pass. The Arkansas Insurance Department then shifted gears and received grant money in February 2012 to develop a partnership exchange.

The state exchange website is called Arkansas Health Connector, and it provides key dates for enrolling, frequently asked questions and other information to help people understand their options for purchasing health insurance. State residents use the federal marketplace, HealthCare.gov, to compare plans, see if they qualify for subsidies, and purchase coverage.

Arkansas was the first state to receive federal approval to expand Medicaid through the Private Option. Through the Private Option, the state uses money earmarked through the ACA for Medicaid expansion to subsidize the purchase of private insurance. The approach has been adopted or considered by a number of other states.

In December 2014, Arkansas received federal approval for two further changes to its version of Medicaid expansion. The waiver allows a requirement of monthly contributions to health savings accounts and limits transportation for routine doctor visits and other non-emergency services.

As originally constructed, the Private Option required annual reauthorization by the Arkansas legislature. In late February 2014, the Arkansas Senate approved continued funding for the Private Option. However, it took the House five votes to reauthorize funding in early March. Arkansas appropriation bills must receive a 75 percent majority in both houses to pass, and the Private Option just squeaked by with votes of 27-8 in the Senate and 76-24 in House.

Legislative support for the Private Option was weakened by the 2014 elections. Republicans, many of whom campaigned against the Private Option, now hold 24-11 and 64-36 majorities in the state Senate and House, respectively.

Gov. Asa Hutchinson asked state legislators to fund the program in its current form through the end of 2016. Legislators heeded Hutchinson’s request by passing Act 46. The law continues Private Option funding through 2016 and establishes a task force to suggest changes to the program for 2017. However, some opponents believe they have killed the Private Option, viewing Act 46 as just a “stay of execution.”

Arkansas legislators are also considering SB 312, which would direct the state Department of Human Services to request federal approval to freeze enrollment in the Private Option effective Dec. 31, 2015. Through January 2015, about 233,500 Arkansas residents were enrolled in the Private Option.

Arkansas health insurance exchange links

Arkansas Health Connector
855-283-3483

HealthCare.gov
800-318-2596

Arkansas Health Insurance Marketplace Board
Website for nonprofit overseeing Arkansas’ transition to a state-run marketplace

Arkansas Insurance Department