Arkansas Governor Temporarily Halts Insurance Exchange

Published October 20, 2011

Arkansas Gov. Mike Beebe has reversed plans to seek a federal health insurance exchange grant after encountering strong opposition from Republicans in the state legislature. Although the Democrat Beebe’s late-September decision could be viewed as a nod toward bipartisanship, some legislators characterize it as a political ploy to advance the implementation of President Obama’s health care law in the state.

The dispute over whether to accept a federal grant for establishment of an exchange is part of an ongoing fight in Arkansas over implementation of Obama’s law. Earlier this year, Republicans in the legislature stopped a bill that would have granted legislative approval to the establishment of a health insurance exchange.

In light of the opposition to creating an exchange, Beebe sought input from the General Assembly before he applied for an establishment grant from the federal government. In response, six Republican legislators wrote to the governor stating they “believe a cautious ‘wait and see’ approach is the right policy.”

In their letter, the legislators noted, “creation of a Federally designed [health insurance exchange] has the potential to bankrupt a state’s Medicaid budget, and also leaves a state little control on deciding how their exchange can function and be funded.”

Although Republican legislators are generally united against creating an exchange at this time, they do not hold a majority in the General Assembly. In the state Senate, Democrats hold a 20-15 edge, and in the House they have a 53-46 majority.

Only Temporary Reprieve

According to David Kinkade of the Advance Arkansas Institute, this decision was only a temporary reprieve, because the governor does not need legislative approval to move forward.

“Beebe is trying to build a movement of support for a health insurance exchange. He is lining up the Chamber of Commerce and insurers to help him move forward with the grant,” Kinkade said.

Since Beebe could have applied for this grant without legislative approval, he certainly did not need the approval of the minority party in the General Assembly. In Kinkade’s view, this reversal by Beebe is a tactic to tag the minority party as obstructionist.

“I don’t think the issue for the grant is settled yet,” Kinkade says. “I fully expect the Beebe administration to come back and try to get this grant later.”

Moving Forward on Exchange

Kinkade points out the Arkansas Insurance Commissioner is continuing efforts to work toward establishing an exchange. Only weeks after the governor’s decision to halt pursuit of the exchange grant, Democratic Commissioner Jay Bradford held a summit to explore exchange development.

In announcing this summit, Bradford sounded confident Arkansas would establish a health insurance exchange.

“I hope our citizens will take advantage of this opportunity to contribute to the Exchange planning process and the ongoing effort to keep the Exchange under state rather than federal control,” Bradford said.