Forthcoming Insurance Exchange Details Explained

Arkansas Insurance Commissioner Jay Bradford and State Sen. Jonathan Dismang (R-Beebe) discussed expectations and concerns of the forthcoming insurance exchange that could provide coverage to as many as a half-million Arkansans.  On Monday (Sept. 23), the feds are expected to give approval to the pricing of rate plans in Arkansas’ Health Insurance Marketplace (HIM).

Appearing on KARK’s Capitol View, Bradford said there is a frenetic rush to pull all the elements together for the new Health Insurance Marketplace by an Oct. 1 launch deadline.

“It’s certainly not going to be easy to get there by Oct. 1. It’s an arduous task, everything’s coming together at once,” said Bradford. “You’ve got the federal system, our state system, the Medicaid system – all blending in for this whole project. No one has ever done it before. .. We’ll get there. It’ll be a bumpy road, but we’re up to the task.”

The HIM was broadened by Arkansas lawmakers who adapted parts of the federal health care law to create a state-specific system known as the “private option,” which would move significant Medicaid-eligible recipients into a private health insurance system, funded initially by federal dollars. The HIM also was required under the Affordable Care Act, often referred to as Obamacare, for the purposes of providing uninsured citizens making below 138% of the federal poverty level.

Dismang, one of the architects of the state plan, said there is nervousness on behalf of all legislators regarding the launch and operations of the exchange, but the biggest worry is what health insurance plans will cost.  Monday’s release will be the first public inspection of those plans’ prices.

“The most important thing that we’re looking for right now are the rates. We’re still waiting on those to be released and have some assurances we hope from the feds that it will be Monday,” Dismang said.

Once the feds do sign off on the four insurance carriers’ plans that have been qualified for the HIM, consumers will see for the first time a matrix of choices for health insurance offerings.

There should be gold, silver and bronze plans offered by the four health groups. The pricing for the plans will have variables that could affect costs.

For instance, a smoker or non-smoker will see different rates. Age will influence pricing, as a 25-year old may have a cheaper rate than a 55-year old. Locale, or where a person lives, may cause a rate to be more or less expensive as the plans are grouped regionally. Finally, income levels may also qualify consumers for tax credits or incentives that could bring down insurance plan costs.

Bradford said he hopes to provide “plain language” examples for the public to better understand the plans.

“It’s my idea for us to have examples by age and the different categories so someone could say if I’m 31 years of age and I make $30,000 a year, I have three children – this is what it’s going to cost,” he said.

Dismang warned, however, that lawmakers predicated the model on conservative estimates. If the plans are not affordable or cost much more than projected, legislative support will quickly erode and could be problematic for future funding.

“If these rates come in higher than what these actuaries estimated during the session, then I think there will be an issue with private option,” said Dismang. “If they come in in the mid-$400’s per month, then I think we’ll have something that we’re able to work with and I think we’ll have a model that has some promise to it.”

You can watch their full discussion in the video below.