LITTLE ROCK — A state legislative panel heard updates Thursday on enrollment in the so-called private option and the Arkansas Health Insurance Marketplace and discussed a report on the impact on businesses if the private option were to be discontinued.
Enrollment in the private option, the state’s program to use federal Medicaid money to provide private insurance to low-income Arkansans, is “going well” with more than 85,000 Arkansans now participating in the program, state Department of Human Services Director John Selig told the House and Senate committees on Public Health, Welfare and Labor.
Selig’s testimony came while the future of the program is in doubt because of recent developments. One state senator, Missy Irvin, R-Mountain View, who voted for the program last year said this week she plans to vote against reauthorizing it, and Jonesboro Republican John Cooper, who opposes the private option, won a special election last week to replace Democrat Paul Bookout, a supporter of the private option who resigned last year.
The private option only passed with one vote to spare in the Senate, so the apparent loss of two “yes” votes jeopardizes its chances for renewal in the fiscal session that begins Feb. 10.
State Medicaid Director Andy Allison told the panel that among people who enrolled in the program in December and January, about 30 percent have incomes between 100 percent and 138 percent of the federal poverty level, whereas the people who enrolled in October and November, the program’s first two months, tended to have lower incomes.
Selig said the private option is bringing younger, healthier people into Arkansas’ insurance market.
“We continue to feel strongly that this relatively young, healthy population is helping the insurance market as a whole and ultimately will probably help keep all of our rates down because you’re putting at this point close to 100,000 clients into the market that should be attractive to the insurance carriers,” Selig said.
State Surgeon General Joe Thompson said he wanted to call to the panel’s attention to a report by Jackson Hewitt Tax Service estimating that if Arkansas abandons the private option, businesses in the state with 50 or more employees will be exposed to between $27 million and $40 million in tax penalties for failing to provide affordable insurance to employees.
Sen. Cecile Bledsoe, R-Rogers, chairman of the Senate public health panel, said she was under the impression that the mandate for businesses to offer coverage to employees had been delayed until 2015. Thompson said that was correct.
“There are those who are thinking that possibly it will be appealed. Is that not correct?” Bledsoe asked.
“I think there are probably people thinking that all aspects of this could be modified in a thousand different ways,” Thompson said.
Sen. Jane English, R-North Little Rock, said Jackson Hewitt’s report assumes that Arkansas employers will want to move their low-income employees into the private option.
“I find it very hard to believe that business people around the state of Arkansas will say, ‘I don’t want to have to provide insurance and follow those mandates and pay these costs; I would rather have my employees go on the private option,’” she said.
Thompson said that for some employers, meeting the requirements of the federal Affordable Care Act may not be possible without the private option.
“Particularly with companies that have low-wage, high-turnover jobs — convenience stores, restaurants, those things — if the employer mandate is in effect, then they are really behind the 8-ball because their administrative costs, their overhead, the length of time somebody is on those plans becomes prohibitive,” he said.
Also Thursday, Debbie Wilhite, chief operating officer of the federally facilitated Arkansas Health Insurance Marketplace, testified that by Sunday, 14,684 Arkansans had enrolled in health insurance plans through the marketplace. The number was obtained by compiling data provided by insurance carriers, she said.