LITTLE ROCK — Establishment of an Arkansas-based health insurance exchange for the individual market is "on pause at this point," Gov. Asa Hutchinson said Thursday.

LITTLE ROCK — Establishment of an Arkansas-based health insurance exchange for the individual market is "on pause at this point," Gov. Asa Hutchinson said Thursday.


The governor also discussed feedback he has received to reforms he has proposed as part of a plan for continuing some form of Medicaid expansion.


Speaking to the Governor’s Advisory Council on Medicaid Reform, Hutchinson said, "The federal exchange that we currently operate under is proven and is working. The state exchange is unknown and carries risk associated with it. It is not clear that the individual state exchange is needed, depending upon the reforms that are adopted by the Legislature."


In a speech last month, Hutchinson said he was willing to continue accepting federal funding for Medicaid expansion if the state is allowed increased flexibility in shaping Medicaid reforms. In that speech he outlined a proposed reform plan containing seven elements, some of which would require federal Medicaid waivers.


Hutchinson said Thursday, "Under my framework that I provided, there is no need for the individual state-based exchange to be developed separately from the federal exchange."


He acknowledged that the Legislature may pursue reforms that would justify a state-based exchange.


"I think it’s prudent to put it on pause for now and recognize that if there is some justification for it later we can revisit it, but I quite frankly don’t anticipate the need for the state-based exchange in Arkansas and so it’s on pause at this point," he said.


The Arkansas Health Insurance Marketplace Board has been using a $99 million federal grant to prepare for the switch to a state-based exchange for the individual market, with coverage to begin in January 2017. Hutchinson said Thursday, "I know those are federal dollars, but federal dollars are our dollars."


Hutchinson said he has advised U.S. Health and Human Services Secretary Sylvia Burwell that he has asked the marketplace board to put plans for establishing a state-based exchange on hold. He said he also told Burwell about the Medicaid reforms he has proposed and said she was "cautious" but "indicated that she is happy to work with us on each of these."


Discussing his reform plan, Hutchinson told the advisory council that the element that has received the most feedback is his proposal to eliminate coverage for non-emergency medical transportation.


"I recognize that we’re a unique state, we’re a rural state, we have those that have exceptional needs, and we need to provide some hardship exemptions or other exemptions if we adopt that element of eliminating non-emergency medical transportation," he said.


The part of the plan that "raised the most eyebrows" is the proposal to restrict the Medicaid expansion program known as the private option to working people and enroll others in traditional Medicaid, Hutchinson said.


"If you really like that, you better raise your voice because there’s not very many voices in support of that being articulated at the present time," he said.


Another part of the plan is to require people in the expanded Medicaid population to participate in employer-sponsored insurance when it is available, with premium assistance provided. Hutchinson said a consultant has advised that about 7,700 people would be affected and that the state would save about $29 million annually if the requirement were adopted.


One part of the plan is to require work training for the unemployed and under-employed in the expanded Medicaid population. Hutchinson said this could affect tens of thousands of people.


"In some areas of the state where you have insufficient work training programs, you might have to substitute those with community service or charity work of some kind," he said.


In a letter to Burwell explaining why he was putting a state-based exchange on hold, Hutchinson noted that a legislative task force is due to make recommendations on Medicaid reforms in December. However, a consultant has advised the marketplace board that if potential vendors still do not know what would be required of them by Nov. 1, it will be too late to plan a state-based exchange for implementation in 2017.


A reporter asked the governor Thursday how late he believed the state could make a decision and still have the option of launching a state-run exchange with coverage starting in 2017.


"That’s a technical question, but the important thing is that we have an exchange that works right now, so whatever we do, we have a federal exchange that continues," he said. "In my conversation with Secretary Burwell, I don’t anticipate any problem. They’ll work with us on that."


Hutchinson has not asked for a delay in the launch a state-run small business exchange, which is set to begin providing coverage in January 2016.