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Compromise better than ending private option

The debate over whether to continue funding the so-called private option appears to have come down to two choices: End the program or continue it with provisions that would prohibit state outreach efforts on behalf of the private option and the Arkansas Health Insurance Marketplace.

The directors of the state Insurance Department and the Department of Human Services say the latter option would be detrimental to the goal of expanding health care coverage in the state, but they prefer it to ending a program that has already provided insurance to thousands of Arkansans.

The House on Thursday adopted amendments to the private option — Arkansas’ program that uses federal Medicaid money to provide private health insurance to people earning up to 138 percent of the federal poverty level — including one that would ban the state from using any appropriated money to promote the marketplace or fund the activities of the in-person assisters who have been helping people enroll.

The Legislature is deciding this session whether to appropriate $915 million in federal funding to continue the program, under which about 97,000 Arkansans have already obtained health insurance, according to DHS. Rep. Nate Bell, R-Mena, proposed the amendment last week, saying it was an attempt to reach a compromise between legislators unwilling to vote for the private option and legislators unwilling to vote for a budget that does not include the private option.

DHS Director John Selig told a legislative panel last week, “The administration disagrees with this. I think the governor believes in the private option — certainly we do — and believes you should do outreach and let people know what’s available to them in the system. That said, I think we even more strongly are comfortable saying on behalf of the governor that the most important thing is to make sure that 100,000 people don’t lose coverage that they just got.”

State Insurance Commissioner Jay Bradford echoed that sentiment in an interview.

“We would like to go forward” with public outreach, Bradford said. “We feel like from a business point of view, that’s a proper way to educate the public what their options are. However, the more important part is the private option, and it’s the prerogative of the Legislature to make those changes.”

Gov. Mike Beebe told reporters last week he was willing to accept the amendments to get the private option renewed.

State officials previously projected that about 500,000 Arkansans would obtain insurance through the insurance marketplace, about half of them under the private option. Selig said in an interview that he believes participation in the private option could reach 250,000 even with the proposed changes.

“We don’t do any outreach on the private option now,” he said. “It seems to be through word of mouth, through brokers, through other means that people are signing up.”

Bradford said ending outreach on the marketplace surely would put a damper on enrollment. He said the department has not made any projections yet on what the impact would be.

“It might take us a little longer to get there because we don’t have those methods there to educate people,” he said. “But as long as the private option stays in effect, it’s going to not only mean a lot to working Arkansans, especially young people, young families, (but also) the fact that they’re in the private insurance system helps everybody.”

Bradford said the population that is eligible for the private option is important to bring into the insurance pool because those are the people most likely to be receiving care they cannot pay for at hospital emergency rooms, which raises medicals costs for everyone, and because people who have jobs but lack insurance solely for economic reasons tend to be younger and healthier than people who have lacked insurance for other reasons.

Insurance companies like to enroll young, healthy people because the lower risk of claims makes up for people with higher risk, Bradford said.

“They supplement old guys like me,” he said.

If fewer young, healthy people sign up for insurance because of the lack of outreach, insurance companies are likely to find Arkansas a less attractive market and premiums are likely not to be as low as they otherwise might be, Bradford said.

But he also said that outreach will continue and likely increase in the private sector.

“Medical facilities will be holding their own outreach at their expense, and the agents, you got hundreds of agents that have gone through the process and have been trained and tested, they’re going to be out there and explaining the commercial process, that’s certainly intact,” he said.

Barring the funding of guides, navigators and other in-person assisters would mean that more than 500 people would lose their jobs when the new fiscal year begins July 1, Bradford said, but he noted that all of those people signed acknowledgements that their jobs would exist only as long as the funding existed.

The Insurance Department would continue to help people enroll in the marketplace, he said, with the difference being that “we’re not initiating it.”

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