Legislators Question Need To Move Now On Health Care Laws

Arkansas’ efforts to write state laws and regulations to implement federal health care reform was put on hold today. Members of the House Insurance and Commerce Committee delayed a vote until Friday on HB 2138 by Rep. Fred Allen (D-Little Rock). The bill outlines a number of details of how the state would prepare for federal health care’s enactment, assuming it survives court challenges and potential Congressional changes.

An amendment to the bill was added at the beginning of the committee meeting that says if U.S. court action rules that federal health care is not constitutional, then the state legislation goes away.

The bill has been amended 10 times to accommodate representatives’ concerns.

"We are trying to hold a place in Arkansas to protect Arkansans," said Insurance Commissioner Jay Bradford. "We don’t want to send Arkansans to Washington for help."

Bradford said last year the Insurance Department fielded more than 1,000 complaints from Arkansas consumers on health insurance issues.

Arkansas has been given two $1 million grants to implement different aspects of the federal law. First, the state has begun a health benefits exchange to allow for rate comparisons and regulation of the insurance industry. In HB 2138, many details of how the state would embark on this exchange are outlined. It also directs the exchange to be "self-sustaining" by Jan. 1, 2015 and requires an annual budget to be prepared and approved by Bradford’s office.

A second million dollar grant will oversee the study of medical loss ratios. Under the new federal law, health insurance companies are required to spend 80-85% of their premiums on medical claims. The grant money will be used to assess and assist the agency’s rate review system under changes from the new law.

A third smaller federal grant has also been received by the Insurance Department. It will pay for planning to beef up consumer protection under health care reform.

A number of Republican legislators on the committee asked if it was necessary to move in this session.

Insurance Department representatives said that a January 2013 deadline for having some elements of health care established requires action in this legislative session. Bradford warned that if Arkansas doesn’t pass state laws to govern the implementation of federal health care, U.S. regulators will set the rules.

Bradford emphasized that no state money is being earmarked for federal health care reform. As he has said in previous reports, the money comes from federal grant funding.