Final 2 in running to build exchange described as ‘solid’
State’s insurance marketplace board looking at Virginia, California firms
The company that supplied the technology for the federally operated small-business health insurance exchanges and a firm that built parts of California’s exchange were publicly revealed Friday as the two finalists in the competition for a contract to build a small-business exchange for Arkansas.
At a meeting in Little Rock, executives with Reston, Va.-based hCentive Inc. and Mountain View, Calif.-based Get Insured each made presentations to the Arkansas Health Insurance Marketplace Board, which was created by the Legislature in 2013 and awarded a $99.9 million federal grant in December to establish Arkansas-based health insurance exchanges for small businesses and individuals.
John Norman, operations manager for the marketplace, told board members that both companies were “solid” and either one “could do a great job for the state.”
But Get Insured’s proposal was more expensive: $25.1 million for installation and operation over three years,
with up to $8.9 million proposed by hCentive.
Board Chairman Sherill Wise said the marketplace can’t afford Get Insured’s offer. But other board members expressed reservations about hiring the company that erected the federal small-business exchanges that now serve Arkansas and more than 30 other states.
Arkansas Blue Cross and Blue Shield spokesman Max Greenwood said last week that about 20 employers were using Arkansas’ exchange, with plans covering 156 employees.
The insurer is the only one offering plans in Arkansas’ federally run small-business exchange.
“If we do that exact same thing, would we expect to get more than 150 or 200 people?” asked board member Mike Castleberry, vice president of network and business development at HealthScope Benefits in Little Rock.
Norman said a state-run exchange could be tailored to suit Arkansas’ needs, even if it uses the same technology. For instance, the federal exchange currently doesn’t allow business owners to calculate their eligibility for tax credits.
An Arkansas-based exchange also could be configured to reflect the board’s policy decisions and offer business owners more options than the federal exchange, he said.
The board had initially planned to award a contract Friday but decided to put off the decision until Feb. 3. Members asked the marketplace staff to compile a written summary of the staff ’s evaluations of the companies’ proposals and differences in costs.
The Health Insurance Marketplace is working to build insurance exchanges that would replace the ones set up for the state by the federal government under the 2010 Patient Protection and Affordable Care Act. Supporters of Arkansas-based exchanges say they could be tailored to better fit the state’s needs.
Enrollment in Arkansas’ planned small-business exchange is scheduled to start in October for coverage that would start in 2016.
For individual consumers, enrollment would begin in 2016 for coverage that would start in 2017.
Marketplace staff had kept secret until Friday the names of the companies submitting bids for the small-business exchange contract. They cited an exemption to the state Freedom of Information Act that allows public records to be withheld if releasing them would give competitors or bidders an advantage over another.
At a meeting last week, members of an evaluation committee used Southeastern Conference athletic mascots as code names for the companies as they narrowed to two a list of six companies that had submitted bids.
Get Insured was codenamed the Commodores, and hCentive was code-named the Gators.
Marketplace staff members contacted the finalists after last week’s meeting and asked them to reduce the cost of their initial proposals.
Get Insured’s proposal was reduced from $34.8 million, and hCentive’s was reduced from almost $10 million.
HCentive also offered an alternative proposal, involving less flexibility to make modifications to the company’s software, that would cost $6.6 million over three years.
In addition to building the federal small-business exchange, which went online Nov. 15 in 33 states, hCentive built the technology for the individual marketplace in Massachusetts, replacing a competitor’s “faulty solution,” according to hCentive’s precompared sentation to the board.
The company also provided the technology for the small-business and individual exchanges for Colorado, New York and Kentucky.
Get Insured built the “consumer, issuer and agent-facing” components of California’s exchange, the small-business exchanges for New Mexico and Mississippi and the individual and small-business exchanges for Idaho.
Executives with both com- panies said their exchanges all went online on time with no major technical problems.
Norman said hCentive scored slightly higher in a technical evaluation by the staff in two areas: corporate experience and functional requirements. Get Insured scored higher in one area: project management and work plan.
But he said the difference between the two companies’ scores was only 12.5 points “out of thousands.”
“These are splitting hairs,” he said.