Ark. drops plans for state-run insurance exchange

Arkansas has dropped plans for a state-run health insurance exchange, or marketplace, and will instead rely on one created by the federal government.

State Insurance Commissioner Jay Bradford said in a statement that he was abandoning administrative planning for a state-run version of the exchange after legislative opposition “quashed the state’s efforts to meet federal requirements for implementation of its own exchange by the January 1, 2014, deadline.”

The Patient Protection and Affordable Care Act required states to certify plans to launch a state-run exchange by 2013 or for the federal government to create and operate an exchange in the state.

A volunteer advisory group Bradford appointed in April to address policy issues surrounding a state-run exchange recommended ending the effort because of opposition from legislators.

“The Steering Committee and I believe insurance is local and local regulation is preferable,” Bradford said.

The Arkansas Insurance Department received a $1 million federal grant in September 2010 to plan the exchange.

Last week, HHS awarded nearly $220 million in grants to 13 other states and modestly increased flexibility in the program to encourage more states to pass laws establishing marketplaces. So far, only 13 states have passed legislation to statutorily create exchanges, but HHS officials said they hoped their recent action will encourage more legislatures to act when many legislative sessions begin in January.