Analysis: Arkansas Health Exchange Faces Steep Odds in 2012

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Arkansas’ top insurance official says he’ll “go down fighting” in favor of the state setting up insurance exchanges under the federal health care overhaul. It’s a fight he’s entering as the clear underdog — with the odds stacked against him.

Insurance Commissioner Jay Bradford said he hasn’t given up on the idea of implementing the exchanges and said he may push for them during the fiscal session that begins in February. A reluctant governor, deep Republican opposition and a high vote burden are the biggest obstacles in his way.

“I think it would be a very appropriate and very businesslike decision to give us the authority to go forward with the exchange during the fiscal session, but the mathematics of that are pretty difficult,” Bradford told reporters after briefing the Legislature on the exchange.

The mathematics include the two-thirds vote he would need in both the House and Senate to even consider the exchange, since it’s not a budget matter. Add to that Gov. Mike Beebe’s objection to considering the exchange during the fiscal session, and it becomes a nearly impossible task.

“The governor, from the point that it became law in ’08, has been pretty consistent that the fiscal session is not the time to take up policy matters,” Beebe spokesman Matt DeCample said.

A renewed push for legislation on the health insurance exchange faced an uphill battle before Bradford floated the idea before the Legislature last week. A group of Republicans effectively held up the Insurance Department’s budget for days over objections to the exchange, a new insurance market to be set up under the law by 2014.

Supporters of the legislation to authorize the state to set up the exchange referred the measure to an interim study rather than a vote, paving the way for the Insurance Department’s budget to win approval.

That move, however, didn’t prevent the state from moving forward. Bradford said his department has been holding a series of hearings and planning sessions for the exchange around the state using a $1 million grant from the federal government, and he hopes to receive another federal grant later this year.

That grant will require approval from an interim legislative committee. But any future grants after that will require the state to have the authority to set up an exchange, a condition that Bradford says must be met by June 2012.

That leaves only three options: an executive order from Beebe, a push during the fiscal session or a special session. Beebe has already ruled out calling a special session or creating the exchange through an order.

With the governor dismissing the idea of taking up the exchange during the fiscal session, it’s hard not to view the issue as dead.

“(Beebe) thinks the best opportunity for the exchange to be put under state control has come and gone,” DeCample said.

That’s a sentiment that Republican leaders in the Legislature say they share with Beebe, and warn that any renewed bids for an exchange are going to face the same level of opposition and skepticism.

“I guess last time they cried wolf,” House Republican Leader John Burris said. “I don’t know that crying wolf again is going to be very effective.”

Rep. Fred Allen, who sponsored the exchange legislation this year, said he thinks attitudes may have changed enough to win support for the idea. Allen says he’d like to talk with Bradford about a strategy for the exchange legislation if there is another push.

“I think we have to go back to the drawing board and come up with a totally different approach,” said Allen, D-Little Rock.

For now, Bradford admits a successful crack at the exchange legislation is a longshot. But he also says that many factors could sway things in his favor, and points to the ongoing legal challenges that eventually will land the overhaul before the U.S. Supreme Court.

“I can’t just sit around and wait and not do anything,” Bradford said.