Insurance Department Funding Bill Fails Again (updated)

A funding bill for the Arkansas Insurance Department was debated for a second day in the House of Representatives, but it met the same fate as a day earlier.

It failed 70-23, needing 75 votes to pass.

HB 1226, a budget bill for the Insurance Department, has struggled to pass because conservative House members object to funding for federal health care reform contained in the bill.

The state Insurance Department is charged with setting up health insurance exchanges and has received a $1 million federal grant to begin the process.

The budget bill also contains a number of provisions for other agency functions, including licensing of agents, criminal investigations and consumer complaint protections. Additionally, tens of millions of dollars of insurance claims related to workers comp and public school insurance claims that flow through the agency would not have authority to be paid if a bill is not passed.

While more Republicans supported the bill on the second day than the previous vote, it still did not receive enough support for passage.

House Minority Leader John Burris (R-Harrison) pushed for an amendment to the bill that would allow for the $1 million grant money to be stripped from the measure.

"The intent is in no way to shut down the Insurance Department," Burris said. "There are poeple in this chamber – much more than 25 – who have a problem with aspects of this bill."

Rep. Barry Hyde (D-North Little Rock) asked Burris why objections were not raised on the measure in Joint Budget Committee, where the bill was introduced. Burris does not sit on the budget committee.

However, the bill was debated in Joint Budget last week and an amendment by Sen. Jason Rapert (R-Bigelow) to halt Insurance Department expenditures on federal health care implementation was defeated on a roll call vote.

The House also passed over HB 2138 by Rep. Fred Allen (D-Little Rock). The bill would create health insurance exchanges in Arkansas as part of the $1 million controversial grant in the Insurance Department funding bill. It only needs 51 votes for passage.

UPDATE: HB 1226 was brought up a third time for a vote in an extended session of the House on Wednesday. On the second vote of the day, the bill failed again, 70-19.

Gov. Mike Beebe decried the votes and said he expects the session to adjourn with no budget for the insurance agency.

He pointed out that the Insurance Department budget had bipartisan support – 70 supporters – but that a GOP minority in the House was obstructing the agency’s funding in a "catastrophic" way.

“They collect a lot of money that ends up going to pay for school teachers and public schools and colleges, they regulate the insurance industry, they collect money that goes for policemen and firemen, local city and county police and fire pension funds. If they’re not there, all that’s gone,” Beebe said.

Beebe’s office also said that the Republican objections to the health insurance exchange, which is mandated by federal law, had been met by an amendment to HB 2138 that will restrict spending of the $1 million grant if Congress repeals health care or the U.S. Supreme Court deems it unconstitutional.