The Affordable Care Act requires states to create health insurance exchanges, new health insurance administration programs that inform citizens about the availability of health plans for individuals and small employers. Each state must construct its own exchange under regulations by the federal Department of Health and Human Services or the federal government will operate one for the state. States may work together to create regional exchanges. The exchanges will provide information about coverage, cost, customer satisfaction and other data. The exchanges must be self-sustaining by 2015.
In 2010, Governor Mike Beebe directed the Arkansas Insurance Department (AID) to lead planning efforts for the state’s health benefits exchange. Later that year, the Insurance Department applied for and received a $1 million federal planning grant to determine how the exchange would be handled in Arkansas. AID used this funding to pay for two full-time employees, to contract with First Data Government Solutions for background and research and to fund intergovernmental agreements with UAMS.
During the 2011 legislative session of the Arkansas General Assembly, a bill was introduced to create the “Arkansas Health Benefits Exchange” as a nonprofit legal entity. The bill did not pass, but the issue was referred to interim study.
In December 2011, Insurance Commissioner Jay Bradford announced that the agency was discontinuing planning efforts toward a state-run benefits exchange. The Insurance Department instead opted to pursue federal grant funding to support the development of the Federally-Facilitated Exchange Partnership model in Arkansas. Under the partnership exchange model, the exchange is federally operated, but states have the option of handling two functions: in-person consumer assistance and plan management. In February 2012, the agency was awarded $7.6 million to support that planning effort.
Arkansas then elected to handle both the consumer assistance and the plan management functions for the partnership exchange. In September 2012, AID received an $18.6 million Level I "B" grant to continue support for its planning process. (See AR's Level One "B" Grant: Budget and Project Description below.) In January 2013, the U.S. Department of Health and Human Services gave Arkansas conditional approval to establish a State Partnership Exchange.