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Senate committee approves transfer of state insurance marketplace into Arkansas Insurance Department
Summary
After oversight testimony and public comment, the Senate Insurance & Commerce Committee voted to transfer the state health insurance marketplace into the Arkansas Insurance Department, arguing the move reduces duplication and may allow elimination of the marketplace fee for plan year 2020; opponents warned of marketing conflicts and consumer remedies loss.
The Senate Insurance & Commerce Committee voted to adopt an amendment and pass legislation transferring operations of the state health insurance marketplace into the Arkansas Insurance Department (AID). Committee members cited oversight findings, duplicated functions and potential savings as reasons for the change.
Ryan James, legislative liaison and communications director for the Arkansas Insurance Department, told the committee that marketplace fee arrangements are complex but said AID could absorb marketplace duties without continuing the roughly 1% marketplace fee for plan year 2020 if the transfer is approved. "For plan year 2019 ... that fee is baked into the rate filings," James said, explaining any elimination of the marketplace fee would only apply beginning in plan year 2020. He also said the federal technology fee assessed to carriers was expected to fall from 3% to 2.5% for state-based exchanges using the federal platform in plan year 2020.
Representative Nate Bell, speaking in opposition during the public-comment period, argued the marketplace performs active marketing and customer-service functions that a regulator would not. Bell warned of conflicts of interest and limits to consumer remedies under state sovereign immunity if marketing operations are folded into the regulatory body, saying, "If a person ... seeks assistance ... they complain right back to the same people that they just had the problem with." He also disputed some budget figures and said there are federal grant opportunities that could be affected.
The bill's sponsor placed audit findings on the record, citing a Bureau of Legislative Audit review and saying the marketplace's reported cash reserve had recently fluctuated to roughly $1.5 million. The sponsor argued AID already performs many of the marketplace's technical functions and that consolidating operations would reduce redundancy and improve legislative oversight.
A motion to adopt the bill, as amended, was seconded and approved by voice vote. The chair announced the bill had passed the committee. The legislation's next step is the House record and any further floor action required by the Legislature.
Notes: Plan-year fee figures, AID appropriation amounts and other fiscal numbers were discussed in committee testimony and are described here as presented by witnesses and the sponsor.
