Arkansas Legislation and the Health Benefits Exchange

1. Cynthia Crone, APN, DirectorHealth Benefits Exchange Partnership DivisionArkansas Insurance Department Arkansas Legislation and the Health Benefits Exchange

2. Arkansas Advocates for Children and FamiliesPost - Legislative ConferenceMay 16, 2013 Summary of Acts from the 89th General Assembly relating to the Exchange (Marketplace)

3. Affordable Care Act The ACA was passed by Congress and signed into law by President Obama in March, 2010.

4. The ACA Includes such reforms as: • The elimination of coverage bans for pre-existing conditions • The elimination of annual and lifetime benefit limits • Required coverage of certain preventive care at no cost to consumer

5. Reforms - continued • Allowing children to stay on their parents’ plans until age 26 • And other market reforms like Limited Rating Increases Medical Loss Ratio At least 60% Actuarial Value Plans

6. Essential Health Benefits With at Least 60% Actuarial Value • Ambulatory Services • Hospitalization • Emergency Services • Maternity and Newborn Care • Mental Health and Substance Use Disorder Treatment • Prescription Drugs • Rehabilitative and Habilitative Services/Devices • Laboratory Services • Preventive, Wellness, and Chronic Disease Management • Pediatric Services, Including Oral and Vision Care

7. The ACA requires most peopleto obtain health insurance – healthy and ill • The goal of this mandate is to reduce uncompensated careand build a quality, sustainable health care system

8. To help cover those currently uninsured, the ACA: • Called for the creation of Exchanges to lower prices through purchasing pools and tax credits • Established expansion of Medicaid to cover adults up to 138 percent of the poverty level.

9. Exchanges • To be operational in every state • Open enrollment by October 1, 2013 • Full coverage by January 1, 2014 • If a state does not elect to operate an exchange, the federal government will operate an exchange in that state. • Arkansas did not elect a State Based Exchange in 2011.

10. Who Will Shop on Exchange in 2014? • Individuals under 400% FPL • Small Businesses with 50 or fewer employees

11. Three Exchange Models • State Based Exchange • Federal Exchange • State Partnership Exchange • Plan Management • Consumer Assistance • Both

12. In December 2011, Governor Beebe declared that Arkansas would explore the Partnership Exchange model--whereby the federal government would handle eligibility and enrollment and the state would handle: - plan management • consumer assistance Arkansas received federal funds for planning

13. What happened next? • In June 2012 the U.S. Supreme Court upheld the ACA and its mandatory enrollment provision as constitutional. • In the same ruling, the court also ruled that the federal government couldn’t force states to expand their Medicaid programs.

14. In December 2012 Governor Beebe officially Declared Arkansas would Pursue a Partnership Exchange Arkansas was awarded conditional approval as a State Partnership Exchange on January 1, 2013. Arkansas will have an Implementation Review onJune 19, 2013.

15. …and Medicaid • Our state developed an innovative and unique approach to expanding coverage to Medicaid eligible consumers without expanding the Medicaid program. • Under the Health Care Independence Act, Arkansas will use Medicaid dollars to pay the premiums for private health plans for those Arkansans under 138% of the federal poverty level.

16. The ‘Private Option’ -- Arkansas’s alternative plan for covering Medicaid eligible consumers-- received most of the attention at the Capitol during the 2013 legislative session.

17. It’s important to remember that the Private Option won’t happen without the Exchange* *Exchange = Marketplace

18. The Marketplace will serve as a purchasing pool for individuals making between 100 percent and 400 percent of the federal poverty level and eligible for tax credits. • And now it will also provide choice of private insurance plans to those in the Medicaid Private Option population up to 138 percent of the poverty level.

19. Triple Win for Healthcare • Consumers will have access to continuous coverage through the same private plan – no “Medicaid Plan” • Providers will be paid commercial rates for their services – no “lower Medicaid rate” • Insurance companies will have more lives to cover — “Medicaid pays for private plans”

20. The customer base expected to be served through the Marketplace will more than double from 211,000 to about 460,000, given the addition of the Private Option enrollees.

21. And, the Marketplace is extremely important to operationalizing the Private Option.

22. In the shadow of the Private Option legislation, two bills were passed that directly impact the operation of the Health Insurance Marketplace in Arkansas.

23. Act 1500 Arkansas Health Insurance Marketplace Act

24. Creates the pathway for Arkansas to set up a State-Based Exchange. • Initially sponsored by Senator Jason Rapert, R-Bigelow, the concept was later transferred to a bill carried by Representative Mark Biviano, R-Searcy.

25. The Arkansas Insurance Department worked with multiple stakeholders to shape the final legislation. • Others providing essential input included: • Arkansas Advocates for Children and Families • Arkansas Hospital Association

26. The bill passed each chamber by large margins. • The House approved with 78 yeas, 0 nays, and 22 not voting. • The Senate approved with 27 yeas, 5 nays, and 3 not voting.

27. Act 1500 creates the Arkansas Health Insurance Marketplace. • Structure would be a “non-profit legal entity” that is also a “political subdivision, instrumentality, and body politic of the State of Arkansas.” • Would NOT be a state agency.

28. The Marketplace is subject to the Arkansas Freedom of Information Act. • But it is exempt from other laws governing states agencies, including:

29. Exempt from: • All state, county, and local taxes • Arkansas Procurement Law (purchasing and contracts) • Uniform Classification and Compensation Act (positions and salaries) • Arkansas Administrative Procedure Act (rules ensuring certain business practices followed)

30. A special legislative oversight committee will be assigned to analyze whether rules set by the Marketplace are consistent with legislative intent. One key legislative intent is “privatizing Marketplace operations”.

31. The new Marketplace will collaborate with the Arkansas Insurance Department in selecting and monitoring plans to be sold in the Marketplace.

32. A Board of Directors will supervise and control the Marketplace. • The Board will consist of 11 members. • Must be appointed by July 1, 2013, a little more than a month away.

33. Three appointees each will be named by: • The Governor (Mike Beebe, D)

34. The Senate President Pro Tempore (Sen. Michael Lamoureux, R-Russellville)

35. The Speaker of the House (Rep. Davy Carter, R-Cabot)

36. Of the Governor’s three appointees: • One shall be a representative of insuranceagents or brokers licensed to sell insurance in Arkansas. • Two shall be consumer representatives.

37. Of the Senate President Pro Tempore’s three appointees: • One shall be a representative of a health insurance issuer. • One shall be a representative of small employers.

38. Of the House Speaker’s three appointees: • One shall be a representative of a health insurance issuer. • One shall be a member of a health-related profession.

39. The other two board members will serve by virtue of their positions in state government:

40. Insurance Commissioner, or designee (Jay Bradford currently)

41. Director of the Department of Human Services, or designee, (John Selig, currently)

42. Terms of office for initially appointed members will be staggered. • Lengths of terms will be four, six and eight years. • Subsequently appointed members will serve six-year terms.

43. The majority of the board must possess experience in one or more of the following: • Health benefits administration. • Health care finance. • Health plan purchasing. • Health care delivery. • Health policy issues related to the small group and individual markets.

44. Marketplace Staff: The Board shall hire the Executive Director who will plan for and administer the Marketplace and hire additional staff.

45. July 1, 2015, is theearliest date the Partnership’s functions would transfer to the State Marketplace. • The decision is up to the Board whether or not to pursue the changeover. • The Board may extend that deadline if it chooses.

46. Starting July 1, 2015, the Board may apply for and spend any grant to assist with the implementation of the Marketplace. • Before July 1, 2015, the Insurance Department may applyfor such grants to help with development of the Marketplace.

47. The Board’s recommendations for funding must be submitted no later than October 1, 2014. • Ongoing funding will be established by the Legislature. • Such ongoing funding would likely be in the form of carrier fees.

48. Act 1439 Concerning the Health Insurance Marketplace Navigator Programs

50. Codifies licensing program for four types of individuals who will assist potential consumers in the new Marketplace: Navigators, Guides, Certified Application Counselors, and Licensed, Certified Insurance Producers. Originally sponsored by Sen. Jason Rapert, R-Bigelow, the concept later transferred to a bill sponsored by Sen. Paul Bookout, D-Jonesboro.