Arkansas Senate Votes to Delay State Insurance Exchange Plans

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Arkansas lawmakers voted to put the state’s plans to set up its own insurance exchange under the federal health law on hold while the nation’s highest court weighs a legal challenge over tax subsidies granted through the overhaul.

The bill was approved by the state Senate on a 25-0 vote the same day the U.S. Supreme Court heard oral arguments over the 2010 health law. Opponents of the law argued before the court that only residents of states that set up their own insurance markets can get federal subsidies to help pay their premiums. The administration says the law provides for subsidies in all 50 states.

The legislation now heading to the Arkansas House would prohibit the state from setting up an exchange until after the high court has ruled. The measure requires the Legislature to decide whether to set up the exchange if justices side with opponents of the law.

“It’s going to be important for the Legislature to weigh in if there’s a dramatic change,” Republican Sen. Jim Hendren of Gravette said before the vote.

Arkansas is among roughly three dozen states that did not set up their own exchanges — online marketplaces where consumers can shop for policies — and relies on the federal healthcare.gov site. The Legislature voted in 2013 to set up a nonprofit that will establish an exchange for Arkansas to replace the one the federal government is running for the state.

Hendren presented his proposal as a compromise approach, noting there’s an effort by some House Republicans to repeal the 2013 law and prohibit Arkansas from establishing a state-run exchange.

In a related issue, a Senate panel endorsed a proposal requiring Arkansas to seek federal approval to freeze enrollment in the state’s “private option” Medicaid expansion by the end of the year. Created as an alternative to expanding Medicaid under the federal health care law, the private option uses federal funds to purchase private insurance for the poor.

State officials have told lawmakers the federal government has told them they can’t freeze enrollment, but supporters of the measure said they want still want the state to make a formal request. The Legislature voted last month to reauthorize the private option another year while a task force looks at alternatives for covering people on the program.