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ahimpromise-brokenCan the Arkansas Health Insurance Marketplace (AHIM) financially stand on its own without state tax dollars, as lawmakers were promised when the Legislature passed Arkansas Works?

Apparently not, the Arkansas Health Insurance Marketplace Legislative Oversight Committee learned on Wednesday. The state Department of Human Services has contracted with the Marketplace to administer Medicaid subsidies for employer-sponsored insurance as part of Governor Hutchinson’s Arkansas Works. The state of Arkansas submitted the details in its supporting documentation to the federal government back in June of 2016 as part of its application for Obamacare waivers for Arkansas Works.

DHS looks for this contract (along with the premium fee and some other “arrangements”) to provide Marketplace funding for 2017, when its $99.9 million federal operations grant expires. It’s odd the contract has already been signed by the Director of the Arkansas Health Insurance Marketplace, Cheryl Gardner, and Human Services Department Director Cindy Gillespie, though Gardner has yet to present it to the AHIM board for its approval (she says she will do that next week). Gardner asserts the contract is not required to keep AHIM financially stable.

Problem is, DHS plans to start paying the Arkansas Health Insurance Marketplace in October, 2016 for developing the contracted program — about $2.9 million over the next 9 months. And that’s taxpayer money. Money the lawmakers were promised would not be used. Like the AHIM’s headlong rush to set and collect its own premium fees, this contract looks like an end-run around required legislative approval for funding.

As Senator Jason Rapert pointed out in Wednesday’s committee meeting,

If your operation [Arkansas Health Insurance Marketplace] is dependent upon you getting this arrangement, which is going to be state tax dollars, that’s a whole different matter from you just [getting] an opportunity to provide a service.

He verbally reminded legislators they were told when they created the Marketplace that it would not be supported by state tax dollars.

Governor Hutchinson’s Arkansas Works plan includes a focus on subsidized job-based health insurance via Medicaid expansion — and Gardner justifies the contract by pointing to the experience she claims AHIM has with small group insurance because of the small-business exchange (SHOP) they’ve run for about a year. She says AHIM already knows small businesses and small business insurance brokers, adding “Even the optics of DHS all of a sudden going out to small businesses and saying, let us do your insurance, it frankly didn’t make sense because DHS has always done Medicaid.”

Hutchinson’s spokesperson said:

The money “is not a subsidy to the Marketplace. DHS could have procured stand-alone technology and consulting, but the alternative allows DHS to use functionality and technology already in place in Arkansas” to provide Medicaid subsidies for employer-sponsored health insurance.

Of course, if we didn’t have a state-run plan to provide Obamacare via job-sponsored insurance (Arkansas Works), none of these funding shell games would be needed, but it’s much too late for that now.

When Arkansas Works was passed, the Governor and plan proponents promised the Legislature that state tax dollars would not be used, but Obamacare in Arkansas continues to give lawmakers heartburn. They were misled, and so were Arkansas taxpayers.