For the first three years of exchange implementation, Arkansas had a partnership exchange for individuals, but for 2017 (starting with enrollment that began November 1, 2016), they have a state-based exchange using the federal enrollment platform at HealthCare.gov. The state has run its own exchange for small businesses since November 2015.
For individuals enrolling in coverage through the Arkansas exchange, the interface remains the same, since they are still using 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 Health Insurance Marketplace awarded a one-year contract to the Arkansas Foundation for Medical Care to provide call center service for the exchange, starting October 31, 2016. The call center is operational Monday to Saturday, 7 a.m. to 7 p.m.
The Arkansas Health Insurance Marketplace board of directors meeting minutes are available here.
As of August 2016, there were 61,189 people with qualified health plans through the Arkansas exchange, in addition to 258,000 low-income residents who were enrolled in Arkansas’ “private option” Medicaid expansion program, which uses Medicaid funds to purchase private plans through the exchange.
Few enrollees impacted by carrier exit
UnitedHealthcare is not offering plans in the Arkansas exchange for 2017 (details below). But unlike some other states where the impact of carrier exits has been significant, Arkansas officials have said that only about 550 people in the Arkansas exchange are having to be switched to another carrier for 2017.
For 2017 — in a change from previous years — HHS has implemented a protocol for mapping exchange enrollees to a different carrier if their current carrier leaves the exchange and the enrollee doesn’t actively pick a new plan for the coming year.
HHS gave states the option of determining how that process would be implemented, or doing it on behalf of the state; Arkansas chose to sort out the plan “crosswalks” at a state level, and has worked to get those 550 people mapped to new plans for 2017.
Those enrollees also have the option of logging back into the exchange during open enrollment and making their own selection, which will override any mapping that was done by the exchange. If the enrollees make their plan selection by December 15, their new plan will be in place January 1. Open enrollment continues until the end of January, but plan selections made after December 15 will have coverage effective in February or March.
Arkansas transitioned to an SBM-FP for 2017
Arkansas already had a state-run SHOP exchange for small businesses, which debuted in November 2015.
The state has also been working for years towards establishing a state-run exchange for individuals (details below), but put the brakes on that process in the fall of 2015. By June 2016, however, the state had requested approval (which was granted) from HHS to operate a state-based exchange that uses the federal enrollment platform on Healthcare.gov, starting November 1, 2016. This setup is called a federally-supported state-based exchange, or state-based marketplace with federal platform (SBM-FP).
Controversy over marketplace fee
Through 2016, SBM-FPs have used Healthcare.gov for free, but for 2017, the fee is 1.5 percent of premiums. That’s less than half the 3.5 percent of premiums charged in states — like Arkansas for 2014 through 2016 — that have a fully-federally-run exchange model. The expectation is that Healthcare.gov will increase the fee for SBM-FPs in future years, although the future of the ACA is very much uncertain at this point. The law is likely to be repealed and replaced under a Trump Administration, although the time frame for that process is still up in the air, and could be pushed out as much as three years.
Starting in December 2016, the Arkansas Health Insurance Marketplace is 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. Half of the new fee will be remitted to Healthcare.gov for use of its enrollment platform, and the other half will be used by the Arkansas exchange to cover their operations costs. The fee is essential to the exchange, as they can 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.
I spoke with a representative of the Arkansas Health Insurance Marketplace on September 12, who confirmed that they were still moving forward with their plans to operate an SBM-FP as of November, with the exchange fee taking effect in December. She noted that the controversy over the fee was still up in the air, but a few days later, on September 14, an Arkansas legislative committee endorsed the fee for the Arkansas Health Insurance Marketplace.
later in September, the Arkansas Health Insurance Marketplace board of directors voted unanimously to increase the fee to 3.5 percent starting in 2018 (with the 3 percent fee remaining in effect during 2017). If the SBM-FP fee is still 1.5 percent in 2018, the remaining 2 percent would be used by the Arkansas exchange to cover their own expected increase in costs. But it’s noteworthy that HHS has proposed increasing the SBM-FP fee to 3 percent of premiums starting in 2018, which would eat up most of the 3.5 percent fee the state-run exchange plans to collect. But we don’t yet know what sort of nuanced changes to things like exchange fees might occur under a Trump Administration in the years before a GOP replacement for Obamacare is implemented.
2017 rates and carriers
In May 2016, when carriers in Arkansas had submitted their rate proposals for 2017, 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.”
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.
United Healthcare not offering plans in 2017
The Arkansas Insurance Department confirmed that United would not participate in the Arkansas exchange in 2017. The carrier is pulling out of the state’s individual market at the end of 2016, which is the case in most of the states where United offered exchange plans in 2016.
UnitedHealthcare made headlines in November 2015 when they announced that they were considering pulling out of the exchanges at the end of 2016. 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.
United did not participate in the Arkansas exchange in 2014 or 2015, and their off-exchange enrollment in the state was just 521 people in 2015. They joined the Arkansas exchange for 2016, although they only offer plans in central Arkansas, and their market share is still quite small.
Arkansas uses a “private option” approach to Medicaid expansion, whereby Medicaid-eligible consumers are enrolled in private plans through the exchange, funded by Medicaid. As of the end of January, there were 704 private option enrollees with coverage through UnitedHealthcare. By October, the state reported that only 550 people were enrolled in UnitedHealthcare plans through the exchange, including Medicaid expansion enrollees.
73,648 people enrolled in private plans through the Arkansas exchange during the 2016 open enrollment period that ended on January 31. For perspective, the Arkansas exchange had more than 51,000 in-force enrollees as of mid-2015. Most of them are among the enrollees for 2016 (their plans were either auto-renewed, or they returned to the exchange and shopped for a different plan for the new year), but about 27,250 enrollees are new to the Arkansas exchange for 2016.
During the 2015 open enrollment period, enrollment in private plans through the Arkansas exchange totaled 65,684 people, but by the end of March 2015, in-force enrollment had dropped to 52,784. In 2016, enrollment as of August stood at 61,189.
Average benchmark premiums in the Arkansas exchange are just 4.3 percent higher than they were in 2015, which means subsidies are slightly higher too. Overall, rates increased by an average of less than 5 percent in Arkansas, but there’s significant variation from one plan to another; some increased in price while others decreased. 88 percent of the people who enrolled for 2016 are receiving premium subsidies, which is unchanged from 2015.
State-run small business exchange
On November 1, 2015, Arkansas launched My Arkansas Insurance, the new state-run small business (SHOP) exchange. Coverage is available through the exchange for businesses with 2 to 50 employees, and enrollment through the site has been smooth. The state-run SHOP exchange became available on the same day that open enrollment began in the individual market. But open enrollment for small businesses continues year-round in every state.
Prior to the debut of the state-run SHOP exchange, Arkansas was using the federally-run SHOP exchange on Healthcare.gov. Arkansas had about 200 small business employees who had coverage under the federally-run SHOP exchange, and they were transferred to the state-run exchange.
Arkansas joined Utah, Mississippi, and New Mexico in opting to run their own SHOP exchange while using Healthcare.gov for individual enrollments.
For 2016 and again in 2017, Arkansas Blue Cross Blue Shield is the only carrier offering plans through the Arkansas SHOP exchange.
The long journey to a state-run exchange for individuals
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 (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.
In June 2015, the Supreme Court ruled that subsidies are legal in the federally-run marketplace, which means there was 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 removed 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.” 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, Arkansas Governor Asa Hutchinson said that the state’s progress towards creating a state-run health insurance exchange for individual plans is “on pause at this point” and that he had communicated that information to HHS. Hutchinson went on to say that Heathcare.gov was working well, and that he wasn’t sure the state needed to push forward with plans for a state-run exchange, which involves additional risks and costs (the King verdict was reached in June 2015, so that was no longer an issue).
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.
Reform still a priority
In December 2015, Hutchinson replaced two members (including the Chairman) of the 11-member Arkansas Health Insurance Marketplace Board of Directors with his own appointees. A spokesman for Hutchinson said that the two new members “share Hutchinson’s vision of the board’s direction.” The two out-going board members had both been appointed in 2013 by former Governor Mike Beebe.
The state was also considering a 1332 innovation waiver to maximize flexibility in implementing the ACA in Arkansas, but the future of the ACA under a Trump Administration is likely to be significantly different than it would otherwise have been, making 1332 waivers less likely to be submitted and/or approved.
In February 2016, Hutchinson announced that he had hired Cindy Gillespie, one of Mitt Romney’s former healthcare advisers, to lead the Arkansas Department of Human Services. One of Gillespie’s responsibilities is overseeing the “private option” Medicaid expansion program that Arkansas has been using (Medicaid funds pay for private health plans in the exchange for eligible enrollees), and working with Hutchinson and HHS to reform the current Medicaid expansion model.
In April 2016, Hutchinson called a special session of the legislature to consider his Arkansas Works proposal to extend and reform the state’s existing Medicaid expansion program. Lawmakers approved his proposal, along with funding, in April.
New exchange carrier for 2016 – but only for one year
Five carriers offered individual health plans in the Arkansas exchange for 2016, although two of them were owned by the same parent company:
- Arkansas Blue Cross Blue Shield
- Celtic Insurance Company (Ambetter)
- QualChoice/QCA Health Plan (both owned by QualChoice Holdings)
- UnitedHealthcare of Arkansas
UnitedHealthcare of Arkansas was new to the exchange for 2016, and only offered policies in central Arkansas. They had initially planned to expand to other areas of the state for 2017, but subsequently decided to exit the exchange altogether at the end of 2016.
The other exchange carriers were offering plans state-wide for 2016.
Average rate increase less than 5 percent for 2016
Average rate increases are relatively small in the Arkansas exchange for 2016. The Arkansas Insurance Department released approved rate changes in late August. For the three carriers that were already offering plans in the Arkansas exchange, the average rate changes were:
- Arkansas BCBS = 7.15 percent increase
- Celtic (Ambetter) = 0.08 percent increase
- QualChoice/QCA Health Plan = 8.2 percent decrease
Arkansas BCBS had the bulk of the 2015 enrollees, with 79 percent of the state’s individual market share. But almost 9 percent of Arkansas’s individual market enrollees had a plan through one of the QualChoice Holdings carriers in 2015, and those policies had rates decrease of more than 8 percent in 2016.
The modest rate increase for 2016 comes on the heels of a decrease the year before; the Arkansas Insurance Department announced in October 2014 that premiums in 2015 would be two percent lower on average compared to 2014 rates.
In addition to the four exchange carriers, Coventry Health and Life only offers plans outside the exchange. And while state regulators approved a 10.5 percent rate increase for Coventry, they had only 16 enrolled members.
UnitedHealthcare had 521 enrollees in their off-exchange plans in Arkansas in 2015, and their average rates increased by 19.7 percent in 2016. For 2016, UnitedHealthcare is offering both on and off-exchange plans in Arkansas, although they’ll exit the exchange at the end of 2016.
60% drop in uninsured rate
According to Gallup data, the uninsured rate in Arkansas in 2013 was 22.5 percent. By the first half of 2015, it had fallen to 9.1 percent – a 60 percent drop. The 13.4 percentage point drop is the largest of any state in the country. The state’s acceptance of federal funds to expand Medicaid (using private coverage under a waiver) is credited with much of the state’s success in reducing its uninsured rate, as 250,000 people have gained coverage under the Arkansas Medicaid expansion program since January 2014.
According to a Kaiser Family Foundation analysis, there were still 285,000 uninsured residents in Arkansas in 2015. 44 percent of them were eligible for Medicaid, and 21 percent were eligible for premium subsidies. Navigators, brokers, and enrollment assisters have been reaching out to these people in an effort to get them enrolled.
2015 enrollment data
65,684 Arkansas residents signed up for health insurance on HealthCare.gov between Nov. 15, 2014 and Feb. 22, 2015, 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.
Effectuated enrollment in private plans through the Arkansas exchange stood at 51,436 as of June 30. Attrition is to be expected outside of open enrollment, and Healthcare.gov also increased its enforcement of documentation requirements for immigration and financial status, resulting in the cancellation of some plans and/or premium subsidies. In addition, some enrollees never paid their initial premiums, and others opted to cancel their coverage mid-year.
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), although progress towards a state-run exchange is on hold as of late 2015.
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; Hawaii also began using Healthcare.gov for enrollments in the fall of 2015.
Arkansas’ efforts to transition to 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 under a Section 1115 waiver from CMS. However, the current Medicaid expansion program is only slated to run through the end of 2016, and the state must either renew it or replace it in order to continue Medicaid expansion into 2017 and beyond.
Medicaid expansion in Arkansas
Through August 2016, about 317,000 Arkansas residents were enrolled in the Private Option expanded Medicaid in Arkansas. The state obtained a waiver from CMS that allows them to implement Medicaid expansion in a unique way, by utilizing Medicaid funds to pay premiums and most cost-sharing for eligible enrollees. You can read more here about how expanded Medicaid works in Arkansas.
The future of the program is somewhat uncertain however; it needs to be reauthorized by state lawmakers, and Congress might end up making significant changes to the ACA’s Medicaid expansion.
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, but it’s a very basic informational website at this point. Individual enrollees must use HealthCare.gov, to compare plans, see if they qualify for subsidies, and purchase coverage. Small businesses use My Arkansas Insurance.
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, and further weakened with the 2016 election. Republicans, many of whom campaigned against the Private Option, hold 24-11 and 73-27 majorities in the state Senate and House, respectively, as of 2017.
Governor 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 believed they had killed the Private Option, viewing Act 46 as just a “stay of execution.”
Arkansas health insurance exchange links
Arkansas Health Connector
Arkansas Health Insurance Marketplace Board
Website for nonprofit overseeing Arkansas’ transition to a state-run marketplace