Updated 

Insurance executives report fewer than 170 enrolled in Arkansas marketplace


LITTLE ROCK — Insurance company executives told a state legislative panel Wednesday they have enrolled fewer than 170 Arkansans in health insurance plans through the Arkansas Health Insurance Marketplace.

Cal Kellogg, executive vice president and chief strategy officer of Arkansas Blue Cross Blue Shield, Michael Stock, president and CEO of QualChoice of Arkansas, and John Ryan, CEO of Arkansas Health & Wellness Solutions, were asked about enrollment numbers while testifying before the legislative oversight committee on the marketplace.

Four insurance carriers sell plans through the marketplace, which launched Oct. 1. The fourth is the national Blue Cross Blue Shield.

Kellogg said he has seen fewer than 100 enroll, Stock said he has seen about 50 and Ryan said he has seen fewer than 20.

Enrollment has been hampered by technical problems with the federal marketplace site, which Arkansans must use to enroll because the state chose not to run its own exchange. The Obama administration has said it expects to have the site fixed by the end of November.

“We’re concerned that the longer that it goes for the website not functioning, the more frustrated that younger, healthier people are as they try to use that website,” Stock told the panel. “Combined with a variety of other factors, we may not see the volume of participation in the marketplace that we expected to see — and that we based our pricing on.”

Lawmakers also asked about national news reports of cancellation letters being sent by insurers to some customers who bought plans in the individual insurance market. The federal Affordable Care Act sets new standards for those plans and will cause some plans to go out of compliance on Jan. 1, although plans that were in effect on March 23, 2010, the day the act was signed into law, are grandfathered in.

The executives told the panel that they have not had to send any cancellation letters to Arkansas consumers because the state Insurance Department has allowed them to amend non-grandfathered plans so they can remain in effect until Dec. 31, 2014. Those plans will be exempt from the new standards set by the federal law throughout 2014.

State Insurance Commissioner Jay Bradford testified that he issued a directive authorizing the companies to amend the plans so consumers would have more time to make adjustments.

Rep. John Burris, R-Harrison, said that although the executives were not using the word “cancellation,” some Arkansas consumers would still lose their plans.

“The plane didn’t crash, it just suffered from a reduction in airspeed and altitude,” he said. “They’re essentially the same thing.”

Rep. Deborah Ferguson, D-West Memphis, said she recently learned that Blue Cross Blue Shield’s new fee schedule reduces Medicaid reimbursements for specialty doctors by 15 percent. She said the change would force those doctors to see people “at a loss” and said that if the fee schedule is not changed, “there are going to be a lot of people that voted for this private option that are not going to vote the appropriation.”

The private option is the state’s plan to use federal Medicaid money to subsidize private insurance plans through the marketplace for the working poor.

Kellogg said it was his understanding that part of the state’s philosophy was to encourage greater use of primary care, and that spending more on primary care means that “the money has to come from somewhere.”

Sen. Linda Chesterfield, D-Little Rock, told Kellogg that legislators would like the company to take another look at the fee change.

“I will definitely carry that message back,” he said.

Also Wednesday, Deputy Insurance Commissioner Cynthia Crone told the panel that according to their latest estimate, state insurance officials believe they could maintain the state marketplace site for $399,000 a year.

The site, Arkansas Health Connector, connects visitors to the federal marketplace website and contains information about the marketplace. It has not been updated since Sept. 30 because the Legislative Council declined to review a $4.5 million proposed contract for promotion of the marketplace.

Crone previously said she thought the website could be maintained for $500,000.

Sherrill Wise, chairman of the marketplace’s board of directors, told the panel the board hopes to choose a director in mid- to late-February. The board has discussed hiring an interim director but feels it would be better to get a permanent director hired as soon as possible because “the learning curve on this is very steep,” she said.