- Open enrollment for 2021 health plans ended on December 15, 2020. Residents with qualifying events can still enroll or make changes to their coverage outside of open enrollment.
- Arkansas has a state-based exchange using HealthCare.gov for enrollments, but the Arkansas Insurance Department runs the state’s portion of the exchange (instead of the separate nonprofit entity that operated the exchange prior to March 2019).
- Individual market insurers proposed an average rate increase of about 7% for 2021; Oscar and Health Advantage now offer plans.
- Exchange user fees were an important consideration in the decision to have the Insurance Department run the exchange.
- Short-term health plans can be sold in Arkansas with initial plan terms up to 364 days.
- Enrollment in the Arkansas exchange peaked in 2016, with more than 73,000 enrollees. More than 64,000 people enrolled for 2020.
- Insurer participation in the Arkansas exchange has been mostly steady at 4 insurers (including two QualChoice entities), although UnitedHealthcare also participated for one year, in 2016. QualChoice is now owned by Centene, so all of the non-BCBSAR options are part of the Centene portfolio.
Arkansas health insurance exchange overview
Arkansas has mostly embraced the ACA, expanding Medicaid via an 1115 waiver that allows the state to purchase private plans for Medicaid expansion enrollees (albeit with a controversial work requirement that took effect in 2018 but was later overturned by a judge), operating a fully state-based small business exchange from 2016 through 2018 (no carriers opted to participate in 2019, so the state is no longer running a small business exchange), and as of 2017, running a state-based exchange for individuals using the HealthCare.gov enrollment platform.
When is open enrollment for health insurance in Arkansas?
Open enrollment for 2021 health plans ran from November 1 through December 15, 2020. Outside of that window, a qualifying event is necessary in order to enroll in a plan (on the exchange or directly through an insurer) or make changes to existing coverage. Loss of other minimum essential coverage is a qualifying event, so people who lose their employer-sponsored health plans are eligible to enroll in a new plan in the individual market as long as they do so within 60 days of the loss of coverage.
Which insurers offer individual health insurance in the Arkansas exchange?
Plans are available statewide from three insurers in the Arkansas exchange, giving residents in the state more insurer options than people in many other states. One of those three insurers – QualChoice – offers plans under two separate entities: QC Life and Health (QualChoice Life) and QCA Health Plan (QualChoice). But as of 2020, Centene owns QualChoice. Centene also owns Ambetter, which is one of the other insurers that offers coverage in the Arkansas exchange.
So although there are technically plans available from Blue Cross Blue Shield of Arkansas, Ambetter, and QualChoice, the QualChoice plans are now also Ambetter plans. Essentially, there are plans available statewide in the Arkansas exchange from just two entirely separate entities: Centene/Ambetter and Blue Cross Blue Shield of Arkansas.
What type of health insurance exchange does Arkansas have?
For the first three years of exchange implementation, Arkansas had a partnership exchange for individuals, but since 2017, they have had a state-based exchange using the federal enrollment platform (SBE-FP) at HealthCare.gov. The state ran its own exchange for small businesses from November 2015 until the end of 2018.
For individuals enrolling in coverage through the Arkansas exchange, the interface remained the same after the state transitioned to an SBE-FP, since they continued to use HealthCare.gov’s enrollment platform. But behind the scenes, My Arkansas Insurance (the state-based exchange) is playing a larger role now, and consumers can use that website to obtain information and assistance. The Arkansas exchange call center is operational Monday to Saturday, 8 a.m. to 4:30 p.m, Monday to Friday.
The exchange went through a transition in 2019, however, under the terms of S.B.113, which was enacted as Act 107 in February 2019 and called for the Arkansas Insurance Department to take over the operation of My Arkansas Insurance. Under the terms of the legislation, the board of directors that had been running the Arkansas exchange was abolished and all duties, responsibilities, financial obligations, and assets were taken over by the Arkansas Insurance Department. The exchange as a separate nonprofit entity was officially dissolved in March 2019, and its eight employees were given severance packages.
From a consumer perspective, however, nothing has changed. The exchange website is still active (it now says “My Arkansas Insurance, A Division of the Arkansas Insurance Department), as is the call center. But the behind-the-scenes work is now being done by the Arkansas Insurance Department instead of a separate entity called the Arkansas Health Insurance Marketplace.
How are individual health insurance premiums changing in Arkansas for 2021?
The Arkansas Insurance Department has published the proposed rate changes that insurers have filed for 2021, including filings from two new insurers: Oscar and Health Advantage.
The following average rate changes have been proposed for 2021 by Arkansas individual-market insurers:
- Arkansas Blue Cross Blue Shield (USAble Mutual): 2.9 percent increase. USAble Mutual has 160,300 enrollees. The filing does not include an adjustment for COVID-19 costs.
- Ambetter (Celtic/Centene): 13.3 percent increase. Celtic has 70,632 enrollees.
- QualChoice Life and Health (now owned by Centene/Ambetter; plans are marketed as Ambetter): 11.2 percent increase. QualChoice has 25,434 members.
- QCA Health Plan (now owned by Centene/Ambetter; plans are marketed as Ambetter): 11.3 percent increase. QCA has 25,515 enrollees.
- Health Advantage (HMO Partners; an affiliate of Arkansas Blue Cross Blue Shield): New, so no applicable rate change. Health Advantage has not included a COVID-19 factor in the proposed rates for 2021. Health Advantage currently offers group coverage; 2021 is the first year they will offer individual market coverage.
- Oscar: New, so no applicable rate change. Oscar is expanding into several new markets for 2021, including Arkansas.
Across the four existing insurers, that amounts to a weighted average proposed rate increase of about 7 percent for 2021. The rates are under review by the Arkansas Insurance Department, and final rates will be announced by the fall.
As noted below, QualChoice and QCA are now owned by Centene and marketed under the Ambetter brand. And one of the new insurers in the Arkansas market, Health Advantage, is an affiliate of Arkansas Blue Cross Blue Shield. So although there are six different insurers listed on the state’s individual market rate change overview, three of them are under the Ambetter umbrella, and two are under the Arkansas Blue Cross Blue Shield umbrella.
One additional point: The number of people with true private individual market health plans through the Arkansas exchange stood at 58,116 as of early 2020. Although the individual market filings for 2021 show a market size of nearly 282,000 people (including on-exchange and off-exchange), the majority of those people are enrolled in expanded Medicaid in Arkansas, which uses Medicaid funds to purchase private health plans for enrollees.
How did individual health insurance premiums change in Arkansas for 2020?
The Arkansas exchange has four insurers offering plans for 2020 (two are part of the same parent company — QualChoice — which is owned by Centene/Ambetter as of 2020), as was the case in 2019. Rate increases for 2020 were very modest, averaging only 2.3 percent. The Arkansas Insurance Department approved the following average rate increases for 2020:
- Arkansas Blue Cross Blue Shield (USAble Mutual): 2.89 percent increase
- Centene/Ambetter (Celtic): 1.9 percent increase
- QualChoice Life and Health (now owned by Centene/Ambetter): 0.51 percent increase
- QCA Health Plan (now owned by Centene/Ambetter): 0.56 percent increase
Although overall average premiums in Arkansas increased by 2.3 percent for 2020, average benchmark premiums in the state decreased by 3 percent. Premium subsidies are based on the benchmark premium, and when the benchmark premium decreases, premium subsidies decrease as well. So although the average rate increases were very small for 2020, average increases in net premiums (ie, after subsidies are applied) could have been more significant for some enrollees who receive subsidies, due to a simultaneous reduction in subsidy amounts. 88 percent of exchange enrollees in Arkansas are receiving premium subsidies as of 2020.
For perspective, here’s a look at how premiums in the Arkansas exchange have changed over the years:
- 2014: This was the first year that ACA-compliant plans were available, and rates were essentially an educated guess, as there was no claims experience in the ACA-compliant individual market at that point.
- 2015: The Arkansas Insurance Department announced that premiums would be two percent lower on average compared to 2014 rates.
- 2016: Average rates in Arkansas increased by less than 5 percent (Arkansas BCBS’s rates increased by an average of 7.15 percent, Celtic/Ambetter’s rates increased by an average of only 0.08 percent, and QualChoice/QCA Health Plan had an average rate decrease of 8.2 percent):
- 2017: When carriers in Arkansas had submitted their initial rate proposals for 2017 (in May 2016), state regulators said that they didn’t believe there was enough justification for those rate requests, and that they planned to deny them “until there is sufficient justification to properly consider any rate increase.”That was in May 2016. In mid-August, all of the carriers that offer plans in the Arkansas exchange proposed new rate increases for 2017, all of which were lower than their initially filed rates. Rate increases were then reduced even further for QualChoice and QCA:
- Arkansas Blue Cross Blue Shield (USAble Mutual): initially proposed a 14.7 percent increase, later reduced to 9.7 percent (the carrier strongly disagreed with state regulators’ decision to disapprove the 14.7 percent rate increase and require the carrier to refile at 9.7 percent, but went along with the request in order to prevent a market exit).
- Centene/Ambetter (formerly Celtic): initially proposed an 8.52 percent increase, later reduced to 4 percent
- QualChoice: initially proposed a 23.68 percent increase, later reduced to 13.5 percent, and then further reduced to 11.1 percent.
- QCA Health Plan: initially proposed a 23.8 percent increase, later reduced to 13.6 percent, and then further reduced to 11.3 percent. QualChoice and QCA are both owned by QualChoice Holdings – QualChoice offers POS plans; QHC Health Plan offers PPO plans). The Arkansas Insurance Department recommended that the carrier’s lowest-filed rates (ie, the third round of rate filings, Submitted in September) be approved.
- 2018: The Arkansas Insurance Department issued a bulletin stating that insurers could submit alternate rate filings to the Insurance Department, which would take the place of their officially filed rates if there were changes at the federal level relating to cost-sharing reduction (CSR) funding and/or requirements. California’s Insurance Commissioner granted similar flexibility for insurers filing 2018 rates.Ultimately, Arkansas regulators ended up finalizing the rates that were based on the assumption that CSR funding would not continue in 2018. In hindsight, this was a wise decision, as the Trump Administration cut off CSR funding the following week.
The Arkansas Insurance Department has a web page where they showed the initial rate increases that insurers proposed, as well as the rates that were proposed to cover the cost of cost-sharing reductions (CSR). The state had noted that if CSR funding was not committed by the federal government by October 6, 2017, they would finalize the higher rates. Not only did October 6 come and go without a CSR funding commitment, but the Trump Administration officially eliminated CSR funding the following week, on October 12. But since Arkansas had already finalized rates that are high enough to cover the cost of CSR, the market remained stable heading into 2018.The cost of CSR was applied to the premiums for silver plans. That means silver plan rates increased by more than the premiums for other metal levels, which means that premium subsidies were also larger than they would otherwise have been for 2018.The revised rates that the insurers proposed were finalized and implemented for 2018, and are obviously quite a bit higher than they would have been if CSR funding had been allocated by Congress:
- Arkansas Blue Cross Blue Shield (USAble Mutual): initially proposed a 7.8 percent average rate increase, revised to 14.2 percent.
- Centene/Ambetter (formerly Celtic): initially proposed a 9.9 percent increase, revised to 21.4 percent.
- QualChoice Life and Health: initially proposed 21.94 percent increase, later reduced to 8.78 percent (assuming CSR funding was committed), but then revised to 24.78 percent.
- QCA Health Plan: initially proposed 22.1 percent increase, later reduced to 8.94 percent (assuming CSR funding continued), but then revised to 22.47 percent.
- 2019: The weighted average rate increase for 2019 was just over 4 percent, although it would likely be decreasing slightly if the individual mandate penalty hadn’t been eliminated, and if the Trump Administration hadn’t taken steps to expand access to short-term and association health plans. The rate filing details that were approved by the Arkansas Insurance Department for 2019 are available here.
Controversy over marketplace fee was instrumental in the switch to having the Insurance Department run the exchange
Through 2016, SBE-FPs used Healthcare.gov for free. But the fee increased 1.5 percent of premiums for 2017, to 2 percent of premiums in 2018, and to 3 percent in 2019. The fee in states that rely fully on the federally-run exchange is 3.5 percent, so states like Arkansas that otherwise run their own exchanges are only getting a small discount. As a result, Nevada and New Mexico (both of which have SBE-FPs) are planning to transition to their own enrollment platforms, and Oregon is also considering it.
Starting in December 2016, the Arkansas Health Insurance Marketplace began collecting 3 percent of premiums as its exchange fee, replacing the previous 3.5 percent fee that Healthcare.gov charged before the state-run exchange was up and running. In 2017, half of the new fee was remitted to Healthcare.gov for use of its enrollment platform, and the other half was used by the Arkansas exchange to cover their operations costs. The fee was essential to the exchange, as they could no longer use federal grant money to cover operational expenses after the end of 2016.
But there was significant controversy over the legality of the fee, and whether it could be implemented without the consent of the full legislature. Arkansas Online’s Andy Davis has a thorough account of the issues surrounding the exchange fee in articles dated September 7, September 8, and September 9, 2016.
Soon thereafter, the Arkansas Health Insurance Marketplace board of directors voted unanimously to increase the fee to 3.5 percent starting in 2018, but this was before HHS announced that the exchange user fee for SBM-FPs would be just 2 percent in 2018 (instead of the 3 percent that had been proposed). So the Arkansas exchange ended up keeping the 3 percent fee in place for 2018 as well.
But for 2019, the exchange has to pay 3 percent for the use of HealthCare.gov, making the previous fee insufficient, as it would have to be fully remitted to the federal government, leaving nothing left for the state to run its exchange operation. So the fee was increased to 4.25 percent of premiums for 2019. This allowed the exchange to keep 1.25 percent and remit the other 3 percent to HealthCare.gov. This is higher than the fee charged in states that simply rely fully on the federally-run exchange (3.5 percent), but Arkansas retains some flexibility and control by having a state-run exchange, and that would be lost if the state simply defaulted to the federally-run exchange.
Not surprisingly, however, the higher fee was controversial. Arkansas Insurance Commissioner, Allen Kerr, noted in 2018 that the Arkansas Insurance Department could take over the duties the exchange currently performs (while continuing to use HealthCare.gov as the enrollment platform) for under $600,000/year, as opposed to the $3.8 million that the exchange spent in the previous fiscal year. Kerr said that if the Insurance Department were to take over the duties of the exchange, the fee would drop back down to 3 percent as of 2020, which would be entirely remitted to HealthCare.gov by the insurers, and the cost to manage the exchange’s duties would come from the insurance department’s budget, which was currently not fully utilized.
But opponents of this proposed change note that consumers would have less assistance if the exchange board was to be dissolved and its employees let go. The exchange said that it was already reducing the amount that it spends, and had agreed to reduce the exchange user fee starting in 2020, although it still would have been above the level that’s collected in states that rely entirely on HealthCare.gov.
All of that ended up being a moot point, however, when the state enacted S.B.113 in February 2019 and moved the exchange under the umbrella of the Arkansas Insurance Department. Commissioner Kerr has noted that the exchange user fee will drop to 3 percent in 2020, as the Insurance Department will not need to collect a fee above and beyond the amount that must be remitted to HealthCare.gov.
For perspective, all of the state-run exchanges have carriers fees/assessments in order to generate funding needed to operate the exchange, but the fees vary considerably from one state to another (in all of the states that rely solely on HealthCare.gov, the fee is 3.5 percent), and the significant variations in enrollment volume make it hard to compare states on an apples-to-apples basis. Nevada also has a state-run exchange that uses HealthCare.gov, but their carrier assessment is only 3.15 percent for 2019 (and they have to pay the same 3 percent to HealthCare.gov that Arkansas has to pay). Average premiums in Nevada’s exchange are virtually identical to the average premiums in the Arkansas exchange ($507/month versus $509/month), but Nevada’s exchange has more enrollees — almost 78,000 versus 62,000 — which means they can generate more total revenue with the same percentage carrier fee.
Arkansas exchange enrollment: 2014 through 2020
As has been the case in many of the states that use HealthCare.gov, enrollment in the Arkansas exchange peaked in 2016 and has declined each year since then. The decreasing enrollment can be attributed to several factors, including the Trump administration’s decision to cut funding for outreach and enrollment assistance, the GOP legislation that eliminated the individual mandate penalty at the end of 2018, the Trump administration’s rule change that expanded access to short-term plans with longer durations, and price increases for ACA-compliant plans (for people who get premium subsidies, the subsidies grow to keep pace with increasing premiums, but not all enrollees qualify for subsidies). Here’s a look at how enrollment in private plans in the Arkansas exchange has varied over the years:
- 2014: 43,446 people enrolled
- 2015: 65,684 people enrolled
- 2016: 73,648 people enrolled
- 2017: 70,404 people enrolled
- 2018: 68,100 people enrolled
- 2019: 67,413 people enrolled
- 2020: 64,360 people enrolled
Although Arkansas uses Medicaid funds to purchase private plans in the exchange for Medicaid expansion enrollees, those enrollments are not reflected in the numbers above. For perspective, more than 240,000 low-income Arkansas residents had coverage under Medicaid expansion as of April 2019, with Medicaid funds being used to purchase their plans in the exchange.
Insurer participation in the Arkansas exchange: 2014-2020
In 2014 and 2015, plans were available in the Arkansas exchange from Arkansas Blue Cross Blue Shield, Celtic Insurance Company (Ambetter), and QualChoice/QCA Health Plan (both owned by QualChoice Holdings).
UnitedHealthcare of Arkansas joined the exchange for 2016, but their participation only lasted one year. The Arkansas Insurance Department confirmed that United would not participate in the Arkansas exchange in 2017. The carrier pulled out of the state’s individual market at the end of 2016, which was the case in most of the states where United offered exchange plans in 2016.
But United’s market share was small; Arkansas officials reported that only about 550 people in the Arkansas exchange had to switch to another carrier for 2017 due to United’s exit, and that included people with privately purchased exchange plans as well as people covered under the Medicaid expansion “private option” in Arkansas, in which the state uses Medicaid funds to buy private plans in the exchange for Medicaid expansion enrollees. Even prior to the launch of the ACA’s exchanges, UnitedHealthcare only had about 9 percent of the individual market share in Arkansas, trailing Arkansas Blue Cross Blue Shield’s 78 percent market share by a wide margin.
Since 2017, the other insurers have remained in the Arkansas exchange. Plans continue to be available from Arkansas BCBS, Ambetter/Centene, QualChoice Life and Health, and QCA Health Plan.
But as of 2020, both of the QualChoice entities are owned by Centene/Ambetter.
The long journey to a state-run exchange for individuals
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 Arkansas Health Insurance Marketplace was established in 2013 by the Arkansas legislature, under Act 1500, to create a state-based exchange. But the process was then put on hold for a while.
In March 2015, lawmakers had passed Senate Bill 343, which required the state to wait to proceed with establishing a state-run exchange until after the King v. Burwell ruling was 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.
In June 2015, Arkansas was one of three states that got conditional approval from the Obama Administration to operate a state-run exchange (at that point the state had a partnership exchange, which is considered federally-run).
That same month, the Supreme Court issued a ruling in the King v. Burwell case, clarifying that subsidies are legal in the federally-run marketplace. That meant there was no longer a concern that subsidies could evaporate and insurance markets would destabilize in states that use Healthcare.gov. Although Arkansas had been working towards a state-based exchange for some time, and had obtained almost $100 million in federal funding to make the switch, the Court’s ruling removed some of the incentive to proceed with the transition, since subsidies were 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.” In August 2015, he reiterated his concerns, saying: “Right now, we’re building a state-run exchange with a $99 million grant from the federal government, and I’m asking the question, why are we building the state exchange rather than relying on a continued partnership with the federal exchange?”
In September 2015, Hutchinson said that the state’s progress towards creating a state-run health insurance exchange for individual plans was “on pause at this point” and that he had communicated that information to HHS. Hutchinson went on to say that Healthcare.gov was working well, and that he wasn’t sure the state needed to push forward with plans for a state-run exchange, which involved additional risks and costs.
By June 2016, Hutchinson’s focus has turned to operating a state-based exchange but using the federal enrollment platform at Healthcare.gov, and that took effect in November 2016. Individuals can get assistance and information at My Arkansas Insurance, and are then directed to HealthCare.gov to enroll.
Arkansas health insurance exchange links
Arkansas Health Connector
My Arkansas Insurance
Website for Arkansas’ state-based health insurance exchange (run by the AR Insurance Department; enrollments are conducted via HealthCare.gov)
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.