LITTLE ROCK — As many as seven insurance companies could end up selling plans in Arkansas through the health insurance exchange in its first year, which would be good for consumers, according to state Insurance Commissioner Jay Bradford.
“It’s going to be eventually a more competitive product for the consumer,” Bradford said.
On Monday, four insurance companies — Arkansas Blue Cross Blue Shield, the national Chicago-based Blue Cross Blue Shield, Celtic Insurance Co. of St. Louis and Qual Choice of Arkansas — submitted letters of intent to sell insurance through the exchange, which is required under the federal Affordable Care Act to be fully operational Jan. 1.
On Wednesday, United Security Life and Health Insurance Co. of Bedford Park, Ill., submitted a letter of intent. Monday had been the deadline for submissions, but Bradford said the deadline was not hard and fast.
Bradford said federal officials have said one or two other nationwide insurance companies, in addition to national Blue Cross Blue Shield, may seek to participate in the exchange in Arkansas, possibly bringing the total number of insurers to seven.
The exchange is required to offer at least two plans in each of seven service areas in the state to ensure competition. Bradford said Arkansas Blue Cross Blue Shield and the national Blue Cross Blue Shield will offer plans statewide, so “right now we’re there.”
“What I can’t answer until the end of these negotiations is of the other companies, how many territories they’ll have,” Bradford said, but he said that with the level of interest shown so far, it appears likely that three or more plans could be available in each area.
“We want as many choices as we can get. It’s better for the competitive climate and then it gives our consumers additional choices,” he said.
The largest health insurance company in the nation, UnitedHealth Group of Minnetonka, Minn., has not expressed interest in selling insurance in Arkansas through the exchange. Bradford said the company is generally staying out of insurance exchanges for now but may get involved after the first year.
A call to UnitedHealth Group seeking comment was not immediately returned Friday afternoon.
Enrollment in the exchange begins Oct. 1. Coverage will begin Jan. 1.
State Rep. John Burris, R-Harrison, said it would be “great” if seven insurance companies offered plans through the exchange in its first year, but “I’m happy with five.”
“I think we’re already at the threshold now where we’ve ensured the competition that we need to keep prices competitive for consumers,” he said. “I’d point to the fact that before you had two companies (Blue Cross Blue Shield and Qual Choice) with almost the entirety of the market share, and now we’re already talking five and potentially more, and I think that number grows as it goes on. I think it’s good news for the consumer.”
Burris was one of the leading proponents of the so-called “private option” for expanding health care coverage by using federal medicaid dollars to buy private insurance through the exchange for people earning up to 138 percent of the federal poverty level, a plan that was approved by the state Legislature this year but still needs federal approval.
People earning between 138 percent and 400 percent of the federal poverty level will be eligible for federal subsidies to help them buy insurance through the exchange. Between that population and the population included in the private option, upwards of 500,000 people are expected to obtain insurance through the exchange.
People who obtain insurance under the private option will not have to worry about plan costs, but Bradford said the companies that serve them will still have to be competitive because the state is not going to approve unreasonably costly plans.
“You won’t be able to get a Mercedes plan” through the exchange, he said.
Bradford said that in addition to increasing competition, the insurance exchange will lower health care costs by increasing the number of insured Arkansans.
“People are going to be getting early treatment on various health issues. In the long run, it’s going to save a lot of money,” he said.
He also noted that more insured Arkansans means less uncompensated care at hospitals.
“You’re paying for the uncompensated care within your premiums, the people who have insurance now,” Bradford said.
The insurance companies are supposed to submit full applications by June 30, although Bradford said that also is not a hard and fast deadline. State and federal officials must approve the plans and determine what service areas they will cover by July 31 — a deadline that is not flexible.
And what happens if the state does not receive a federal waiver allowing the private option?
“That would not be good news, because that’s our method to cover 200,000 people,” Bradford said, but he added that he doubted the federal government would reject the plan after approving it in concept.
“I’m thinking very positively about that aspect of it, frankly. I think it’s going to happen,” he said.