Insurance hub’s fill-in promoted to director’s job

The interim director of the state agency responsible for Arkansas’ health insurance exchange was promoted to the director post Wednesday, but with a pay raise of less than half of the $35,000 that a committee had recommended.

After an hourlong closed session, the Arkansas Health Insurance Marketplace board of directors unanimously approved increasing Angela Lowther’s annual salary by $13,000, to $143,000.

The vote came three weeks after the board’s personnel committee recommended that Lowther keep her interim title but get a pay increase that would have raised her salary to $165,000, the same salary that the previous director, Cheryl Gardner, started with in 2014.

“It was just the consensus of the board that [the smaller increase] made sense associated with the role and the position and historical compensation involved,” said Mike Castleberry, a board member whose term as chairman ended Wednesday.

He noted that in 2014 Gardner was one of only a few people in the country with experience running a state-based health insurance exchange and could “demand a different compensation package.” Gardner had been director of policy and strategy for a Utah exchange serving small businesses for about two years.

At its Sept. 6 meeting, the committee recommended that the board revisit in six months the matter of filling the director’s position, when board members might know more about the future of the agency.

Making interim director Lowther the director, rather than soliciting applications from other candidates, also “just made sense” to board members, Castleberry said.

“I think she’s proven herself,” Castleberry said. She’s communicated with legislators and other state officials.

“She’s well-respected and has great relations with all of

them,” he said.

The board, which elects officers every September, appointed Greg Hatcher of Little Rock to succeed Castleberry as chairman.

Gov. Asa Hutchinson said in a statement that he was “pleased with the board’s decision to make Angela Lowther the permanent director of [the Arkansas Health Insurance Marketplace].”

“As far as her salary goes, AHIM is independent from the Governor’s office and therefore salary determinations are left to board’s discretion, with oversight from the legislature,” Hutchinson said.

Created by the Legislature in 2013, the marketplace had planned to use money from a $99.9 million federal grant to set up state-run health insurance exchanges that individual consumers and small businesses would use instead of the federally managed healthcare.gov.

Such exchanges allow consumers to shop for coverage and apply for subsidies offered under the 2010 federal Patient Protection and Affordable Care Act.

The Arkansas marketplace set up the small business exchange in 2015. But at Hutchinson’s request during his first year in office, the agency scrapped its plans to use its remaining grant money to build an exchange for individual consumers.

Instead, the marketplace took responsibility for certifying the plans sold through the healthcare.gov website in Arkansas and for helping consumers enroll in plans.

Non-Medicaid plans offered through the federal website cover about 55,000 Arkansans, while the small-business exchange plans cover about 450 people.

Enrollment in the small-business exchange will end Nov. 15 because Arkansas Blue Cross and Blue Shield, the only insurance company offering plans through the exchange, is dropping out.

Meanwhile, a subcommittee of the Legislative Council is studying whether the marketplace’s responsibilities should be shifted to the state Insurance Department, a move that Insurance Commissioner Allen Kerr said would save consumers millions of dollars.

Rep. Deborah Ferguson, D-West Memphis and a chairman of the subcommittee, said she opposed the $35,000 pay increase recommended by the board’s personnel committee and voiced her objections to board members.

“We’re still trying to decide the future of the marketplace at all,” Ferguson said, adding that “the original scope of the job was much bigger” when Gardner was hired in 2014.

Lowther said she was “thankful for the opportunity and the vote of confidence” by the board.

She became interim director in February after Gardner accepted a job as director of the agency responsible for New Mexico’s health insurance exchanges.

A 2013 graduate of the University of Arkansas at Little Rock’s William H. Bowen School of Law, Lowther, who is 37, worked as a personal-injury attorney for a year and a half before starting work at the marketplace in 2015 as an insurance carrier liaison. She was promoted last year to director of policy and compliance.

At Wednesday’s meeting, the board also tentatively approved a recommendation from Lowther that it increase the fee it charges to insurers from 3 percent to 3.75 percent of the premiums of plans sold in Arkansas through healthcare.gov starting in 2019.

This year, half of the fee collected in Arkansas goes to the federal government to help pay expenses associated with healthcare.gov, while the other half funds the state marketplace.

The federal fee will increase next year from 1.5 percent to 2 percent, and Lowther said it could increase in 2019 to 2.5 percent.

She said the remaining portion of the recommended 3.75 percent fee reflects an expectation that enrollment in Arkansas’ exchange plans will decrease at a rate of 12.5 percent each year, as it has in previous years.

Increasing the fee to 3.75 percent would make Arkansas’ fee higher than the 3.5 percent paid by insurers to the federal government in states that do not have their own exchanges. Insurers pass the fee along to consumers through higher premiums.

But Lowther said the full increase approved Wednesday may not be necessary if enrollment exceeds her projections. For instance, if the state receives federal approval to scale back enrollment in its expanded Medicaid program, many of those affected could end up enrolling in coverage through healthcare.gov, which would provide more fees to the marketplace.

Lowther said her projections didn’t account for such an increase because proposed Medicaid changes had not been approved by the federal government as of Wednesday.

She said the board vote was needed Wednesday because state law requires the marketplace to report its recommended fee for 2019 to the Legislative Council by Sunday.

“We don’t have all the facts we would like to have,” she said.