An employee of the state’s health insurance exchange spoke to the Kiwanis Club of Pine Bluff this week about changes Arkansans may see in their insurance under the next presidential administration.
President-elect Donald Trump has promised to repeal and replace the Affordable Care Act (ACA), also known as Obamacare, as have leaders of the Republican Congressional majority.
Arkansas residents are currently required to have health insurance under the individual mandate of the ACA. The Arkansas Health Insurance Marketplace, also known as My Arkansas Insurance, offers insurance to individuals, group plans for small businesses and partially subsidized plans for employers of people who qualify for Arkansas Works.
More than 200,000 low-income people are enrolled in Arkansas Works, formerly known as the “private option.” With the private option, the state received federal money to purchase insurance for people near or below the federal poverty line.
Arkansas did this rather than expanding Medicaid.
Those four options cover the state’s population. Citizens sign up for insurance on the federal website healthcare.gov, which the state rents from the federal government as an online platform.
Bruce Donaldson, a broker/navigator and outreach manager with the Arkansas Health Insurance Marketplace, told the Kiwanis Club Wednesday that there is a lot of uncertainty about what will happen once Trump takes office. But he said he has been closely watching the situation in Washington, D.C. for clues on what is to come.
The new president and Congress could repeal the law with no replacement; repeal the law with a replacement; or revise it, he said.
Current features of the ACA that could be eliminated, Donaldson said, include the individual and group mandates, as well as the federal agency responsible for regulating health insurance under the ACA, which is the Center for Consumer Information and Insurance Oversight (CCIIO).
“I think [Trump’s] idea is to get rid of the federal level of this thing, and block grant to the states, and let the states decide what to do with their own population,” Donaldson said.
That could mean that states would be charged with building their own websites for citizens to sign up for health care, which Donaldson said would be expensive. He believes the Republicans want to preserve popular elements of the ACA, such as the requirement that people with pre-existing conditions receive coverage, and the ability of children to stay on their parents’ insurance plan until age 26.
Premiums rose sharply in other states this year. Drastic increases did not happen in Arkansas, he said, because of the more than 200,000 people enrolled in the private option, now known as Arkansas Works.
“There are [roughly] 200,000 of the working poor, basically healthy, [who] are subsidizing the sicker people,” Donaldson said.
Donaldson said there has been a lot of talk about letting insurers compete across state lines, but he said it is more difficult than it seems.
“Let’s say QualChoice wants to sell in Utah. Does QualChoice have a provider network in Utah? No. that’s the biggest cost to a carrier is to go out and contract with providers and get discounts.”
The term carrier refers to an insurer or an insurance company. Provider is a term for anyone who provides health care, such as doctors, nurses, nurse practitioners, physical therapists and others, according to a My Arkansas Insurance fact sheet.
Each state also has different insurance regulations, as one Kiwanis member pointed out, and Donaldson added that the insurance commissioner in Arkansas cannot regulate an insurer in, for example, Utah.
The federal government paid 100 percent of the cost for Medicaid expansion in recent years, but beginning in 2017 the state will have to pay five percent of the premium, Donaldson said. That number increases incrementally to 10 percent by 2020.
“That’s tens of millions of dollars,” he said. “We can’t print money. That’s a big, huge cost.”
The partially subsidized plans offered to employers by My Arkansas Insurance, Donaldson said, are an effort by the state to reduce some of the cost the state will have to pay to the federal government starting this year to fund the law. Under the option, called Arkansas Works-ESI, employers with employees who qualify for Arkansas Works can put those workers on their own group health insurance plans by contributing 25 percent of the premiums. The Arkansas Department of Human Services will then pay the other 75 percent of the premiums.
Finally, the incoming administration and Congress may revise what some have called the “Cadillac” plans by allowing insurance companies to offer different benefits. Currently, every individual or small group insurance plan offered under the ACA must include 10 “essential” benefits, which include things such as emergency room trips, mental health and pediatric services.
“[The current plan is] costing a lot of money,” Donaldson said. “So they’re saying, we will allow carriers to offer different benefits. What you need is better than what you need, so maybe we don’t want to have all of this rich coverage. Maybe we want to have a high deductible and have a medical savings account to help you pay that high deductible. So I think they’re going to go back to saying, not the one-size-fits-all plan they we have now… It’s a very rich plan. I helped design it. It’s beautiful. But as you can see, across the states, the premium increases are incredible. So we have to get a handle on that.”