Waiver Gives States Obamacare Flexibility

Section 1332 of the Affordable Care Act, otherwise known as Obamacare, could offer Arkansas wide latitude in designing its state-based health insurance exchange, including potentially moving Medicaid recipients onto the private option, which has fewer requirements.

Legislators were told of that possibility during Wednesday’s meeting of the Arkansas Health Insurance Marketplace Legislative Oversight Committee.

The exchange provides health care options to individual Arkansans and small businesses. The 1332 waivers are available beginning in 2017. Coupled with another waiver allowed for traditional Medicaid, legislators could move recipients into the private option, which does not require as many benefits, said Rich Albertoni, associate manager of Public Consulting Group. The state has hired PCG to offer consulting services regarding the exchange.

The private option covers low-income Arkansans whose incomes are too high to qualify them for Medicaid.

Section 1332 would allow states to customize their exchanges as long as they continue to offer equally comprehensive coverage and cover as many Arkansans at a cost that doesn’t increase the federal budget deficit. The waivers would free Arkansas plans from having to provide silver and gold versions and offer flexibility regarding who is eligible for tax credits.

The waivers even would allow states to avoid the Affordable Care Act’s individual and employer mandates, said Cheryl Smith Gardner, executive director of the Arkansas Health Insurance Marketplace, after the meeting.

“It’s kind of all on the table with the 1332 waiver,” she told reporters. “That’s what gets really exciting is, essentially what it says is, if you kind of meet these … criteria, then the sky’s the limit, and why wouldn’t you ask for it?”

Gardner has been working for a year to help the state create its own exchange, which currently operates in partnership with the federal government. The state hopes to create an exchange for small businesses in 2016 and for individuals in 2017.

Gardner told legislators that much will depend on the U.S. Supreme Court’s upcoming decision in the King v. Burwell case, which challenges whether beneficiaries in states using federal exchanges are eligible for tax credit subsidies – a foundation of the Affordable Care Act. States must be prepared to innovate regardless of whether or not that happens, she said.

She said health care must head in one of two directions: to a single-payer government system, or one that is more consumer-driven. She said she supports one that is more consumer driven.

Gardner also updated legislators on progress the state is making in setting up its exchange. Planners are working with a three-year, $99.8 million federal grant from the Department of Health and Human Services. She said Arkansas had learned from the mistakes of other states, such as Oregon, which tried to do too much too soon.

She said Arkansas will be able to set up its exchange more cheaply than other states because it is the only one launching exchanges in 2016-17, so vendors will be competing for Arkansas’ business.

Earlier this year, the state entered into a contract for no more than $4.9 million with the CJRW marketing firm. It also has entered into a $7.2 million contract with hCentive for information technology services.