By Eric Boehm | Watchdog.org
Like a child that blows his entire allowance on candy and bubblegum, then gets angry when his parents won’t let him have more money, the Arkansas Department of Insurance says the state Legislature is blocking their promotional efforts for Obamacare after the department already burned through $4 million in taxpayer cash to advertise the health insurance exchanges.
In May, the department signed a contract with a Little Rock-based public relations firm to promote the Arkansas Health Connector, a website designed to inform Arkansans of their health insurance options under Obamacare and ultimately to funnel them towards the health insurance exchange. Arkansas is one of seven states operating a joint federal-state health insurance exchange after declining to run their own.
But just as the exchange went online, the connector went dark.
When the Arkansas Legislative Council reviewed the contract in June, they voted against releasing the second round of cash. Without it, the department was unable to renew their contract with Mangan-Holcomb Partners, the PR firm running the various promotional efforts related to the Arkansas Health Connector.
The contract expired on Sept. 30 and was supposed to be replaced with a new one beginning Oct. 1, to coincide with the launch of the federal exchanges.
State officials say the second round of promotions were going to be the “action phase,” encouraging residents of the state to buy coverage, after the first round was focused on building “awareness” of the new health care regulations.
But the department spent the first round of grant dollars on efforts that some viewed as propaganda, rather than useful information about the coming changes to Arkansans health insurance.
State Sen. Bart Hester, R-Benton, said his constituents demanded an end to the taxpayer-funded advertising campaigns.
“They said ‘you better not be spending my tax dollars on advertisements for Obamacare,’” Hester said. “If my constituents don’t want Obamacare, how I can vote in favor of spending $4 million to promote it?”
A review of the contract signed by the department with Mangan-Holcomb revealed some of those questionable expenses, including more than $26,000 used to develop and market an Arkansas Health Connector iPhone app and another $144,000 spent on social media and search engine advertising.
“There were just so many things that made us question how the money was being spent,” said Hester, who said he thought the money should have been used to inform Arkansans of how the changes would affect them on an individual level, rather than blatant promotion of a federal program.
When the Legislature decided not to renew the contract and release the second part of the federal grant, the Arkansas Health Connector was left in the lurch. The website has not been updated since mid-September and the promotional efforts were forced to cease, just as the federal exchanges went online.
Cynthia Crone, deputy commissioner of the Arkansas Insurance Department and leader of the Arkansas Health Connector project, said the department spent the first round of funding on “outreach and education,” because it was expecting to get a second dose of funds beginning Oct. 1 to focus on enrollment.
“Stopping outreach and education funds is detrimental,” she told Watchdog.org last week. “We now need our ‘action phase’ — Get Enrolled — to become active. Now is the time to market the healthier groups.”
Crone blames Republicans in the Legislature (only one vote against renewing the contract came from a Democrat) for cutting off funding in order to score political points and to strike a blow against the health exchange program.
Hester does not deny that there was a political motivation behind the vote — in his words, it was “a political move, but the right political move to represent the people of Arkansas” — but he says the primary reason for shutting off the grant was to save taxpayer money, regardless of whether that money flowed from Little Rock or Washington, D.C.
If it hurts enrollment in the Obamacare exchanges, well, he said he doesn’t really mind that side effect.
The Arkansas Health Connector is not a vehicle to sign up people for health insurance, but is purely a promotional enterprise designed to increase awareness of the federal exchange. Arkansas is one of 36 states that decided not to run its own health insurance exchange, meaning residents of the state are left to struggle with the glitch-plagued national exchange at Healthcare.gov.
And like the promotional efforts funded in other states, the grant for the Arkansas Health Connector was appropriated and awarded by the federal government, not from the state.
Crone said the advertising blitz was effective, and could have done more if it was allowed to continue. She said internal polls from the department showed a 30 percent increase in awareness — from 24 percent to 54 percent — between June and September of this year. And the department has bragged about having more than 36,000 visitors to the Arkansas Health Connector website during the first few days of October.
But does that awareness translate into people signing up? In many places, it seems like the answer is no, although the federal government has released only limited information about the number of people who have successfully navigated the exchange.
Last week, U.S. Rep. Steve Womack, R-Ark., tweeted that only 18 people from his home state had signed up.
“They burned through $4.3 million with very little impact on the influence of the state,” said Jason Cline, director of the Arkansas chapter of Americans for Prosperity, which launched an ad campaign — without taxpayer dollars, he brags — aimed at stopping the ads from the Arkansas Health Connector.
Some parts of the ad campaign raised red flags with Cline’s group and with lawmakers in Little Rock. In addition to the thousands of dollars used for iPhone apps, bus wraps and pro-Obamacare tweets, the department also paid Mangan-Holcomb more than $150,000 for “multicultural marking consulting,” though the contract does not specify any particular use for the money aside from general “consulting services.”
And The Arkansas Times, a liberal newspaper and accompanying website that gave editorial support for Obamacare and the Medicaid expansion that came with it, scored a $13,000 advertising contract with the Arkansas Health Connector.
Time will tell if the promotional efforts were worth the price tag, or if the Legislature’s maneuver to shut off the funding in Arkansas will be a crippling blow the federal health exchange that already is dealing with enough of its own problems.
But if the goal was to undermine the Arkansas Health Connector project, it seems to have worked. Unique visitors to the website fell from 13,000 on Oct. 1 to 808 on Oct. 20, according to Crone, who blames the decline on the funding issues.
Hester said the people will have their say in the end.
“It doesn’t matter if we spend $20 million trying to get people to sign up. If they don’t want to do it, they are not going to do it,” he said.
Boehm is a reporter for Watchdog.org and can be reached at EBoehm@Watchdog.org. Follow him on Twitter at @EricBoehm87
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