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Legislators Consider Ending Ark Health Insurance Marketplace

Updated: Apr 13

Arkansas Insurance Commissioner Allen Kerr told state legislators yesterday that consolidating the Arkansas Health Insurance Marketplace (AHIM) into the Arkansas Insurance Department would save the state millions of dollars annually.

AHIM was created by the state legislature in 2013 to manage small business and individual health insurance exchanges through Obamacare.

While AHIM is required to report to an oversight committee, it’s an independent commission with its own board of directors. However, that could change.

Act 5 of 2017 requires Legislative Council to study “various aspects” of AHIM to determine its future direction.

Kerr told legislators yesterday that consolidating AHIM into AID would allow the exchanges to be run for a fraction of its current cost.

Kerr said:

The bottom line is we’ve got an extra middle man…that’s what it amounts to. What we would not spend from the efficiencies that we would have by moving this operation under AID…you’d have more money to go into the (Medicaid) Trust Fund over time.

According to a recent analysis done by AHIM, projected total expenses for 2019 are approximately $19 million.

Kerr said he believes AID could run AHIM for less than $1 million dollars.

Kerr said in a letter to lawmakers on the AHIM oversight subcommittee:

Our evaluation indicates that immediate roles could be eliminated due to duplicative services relate to the policy development, secretarial support, legal services, plan management certification (policy review and recommendations), management of health insurance staff and services, customer service call centers, health education presentations, website maintenance, and data analytics roles. There are additional possibilities for further board or management simplifications that could be utilized as well. We have pursued various options that this committee may investigate as we move forward under the Affordable Care Act in Arkansas. Some of the options, particularly as they relate to IT and accounting, may require additional resources at AID. However, this could potentially be eliminated or reduced depending on the decisions related to how to operationalize the decisions moving forward. It is also worth noting that these decisions would be in addition to any currently needed positions, such as the additional position previously requested for data analysis and management operations. Even so, from our analysis, it appears that replacing some or all of the functions of AHIM within AID has the benefit of reducing taxes, government spending, and consolidating functions that are duplicative in nature.

The oversight subcommittee took no immediate action on the proposal yesterday. We’ll see if anything comes of this idea or if the status quo will remain.

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