State set to lose unused insurer exchange funds

LITTLE ROCK — The state agency responsible for Arkansas’ health insurance exchanges expects to lose access to about $80 million when a federal grant expires at the end of this year, agency officials told lawmakers on Thursday.

The money is from a $99.9 million grant that was awarded to the Arkansas Health Insurance Marketplace in 2014 to build exchanges where individual consumers and small

businesses could shop for health plans.

The marketplace, created by the Legislature in 2013, set up the small-business exchange in 2015.

But at the request of Gov. Asa Hutchinson during his first year in office, the marketplace scrapped its plan to use the remaining grant money to establish an enrollment system for individual consumers.

Instead, the agency took over responsibility for certifying the plans sold on the individual exchange and providing information to consumers while continuing to rely on the federal enrollment system that allows consumers to sign up through healthcare.gov.

Angela Lowther, the marketplace’s acting director, said Thursday that the agency has spent about $20 million in grant money so far and expects to spend about $1 million more by the end of the year.

At a meeting of the Legislative Council’s Arkansas Health Insurance Marketplace Oversight Subcommittee, Lowther said restrictions on the grant make it unlikely the marketplace will spend the remaining funds unless the state decides it wants to build its own enrollment system for individual consumers after all.

Even that would likely require federal officials to grant an extension allowing the money to be spent after the end of this year.

“The chances are not good that they would approve that,” Lowther said.

Lowther spoke during the first meeting of the subcommittee, which was created this year to study and monitor the marketplace and make recommendations on its future.

Legislation passed during a special session this year gave those duties to the Legislative Council and abolished the Arkansas Health Insurance Marketplace Legislative Oversight Committee, which had been responsible for monitoring the marketplace.

Subcommittee Chairman Rep. Deborah Ferguson, D-West Memphis, said after the meeting that she wasn’t troubled by the prospect of the state losing the remaining grant money.

She noted that in 2015, the U.S. Supreme Court upheld the authority of the federal government to subsidize coverage for consumers in states that did not set up their own exchanges.

“That sort of made the decision for us that we would stay with the federal exchange, and not move forward with the individual exchange,” Ferguson said.