Baucus sees a health-reform 'train wreck,' fearing insurance exchanges won't be ready

Max Baucus (J. Scott Applewhite, AP)

Senator Max Baucus, who as Senate Finance Committee chair helped write the health-care reform law, has become the highest-ranking Democrat to publicly voice concerns about its implementation, saying he thinks it’s headed for a collision with itself.

“I just see a huge train wreck coming down,” the Montanan told Health and Human Services Secretary Kathleen Sebelius during a budget hearing.

Matt Gouras of The Associated Press notes that polls show that Americans are confused by the complex law, which is designed to cover about 30 million uninsured people through a mix of government programs and tax credits. Baucus told Sibelius he’s “very concerned” that new health insurance exchanges will not open on time in every state and residents will not have enough information to make choices even if they do open on time, as Kentucky's seems likely to do.

"The administration’s public-information campaign on the benefits of the Affordable Care Act deserves a failing grade,” Baucus lectured. “You need to fix this.” Baucus’ office later told Gouras that the senator still thinks the Affordable Care Act is a good law, but questions its roll-out.

Sebelius said that the administration is on track to fully implement exchanges in January, and to be open for open enrollment on Oct. 1, 2013, reports Gouras. Kentucky is among the states that have chosen to build a fully state-based exchange. Others have chosen a state-federal partnership exchange, or defaulted into a federally facilitated exchange. The map below shows the lay of the land about that decision. Yellow states have defaulted to a federal exchange, light blue states are planning for a partnership and blue states have chosen a state-based exchange.

Map provided by the Kaiser Family Foundation

Lawsuit alleges state health insurance exchange is unauthorized

Tea Party activist David Adams filed a lawsuit Monday challenging Gov. Steve Beshear's legal authority to create Kentucky's health insurance exchange without approval from the General Assembly. The governor created the exchange by executive order to offer health insurance plans for Kentuckians under federal health reform, but did not ask the legislature to approve it.

Adams claims state law requires the exchange to get legislative approval, and he seeks an injunction against it. The law allows the governor to temporarily reorganize units of state government and calls for them to be approved by the General Assembly.

Beshear's office says he exercised his constitutional authority to meet the requirements of federal law, reports Jack Brammer of the Lexington Herald-Leader.

Adams said in a telephone interview, "There is nothing in the constitution that allows him to set up a new bureaucracy that taxes, gains fees or spends money without legislative approval." He added, "This isn't about politics. It is simply about gubernatorial authority in the absence of legislative approval."

Kentucky has received about $250 million from the federal government to cover the initial costs of exchange, but Adams said that is being spent rather quickly and funds will be exhausted by 2014, he said. The state will be responsible for all funding for the exchange beginning in 2015; it plans to fund it with fees from participating insurance companies.

Kentucky is one of 17 states that the federal government approved to build its own exchange, which will be operated by the Cabinet for Health and Family Services and is expected to help insure more than 600,000 Kentuckians. (Read more)

Confused or concerned about the impact of health reform on Kentucky businesses? There's a seminar for that.

To address possible confusion or concern of business people and the public about the Patient Protection and Affordable Care Act, or "Obamacare," health-care reform experts will address its impact on small and large companies across Kentucky at half-day seminars in Lexington and Louisville on May 8 and 9.

The Kentucky Health Care Reform Seminar will include specific discussions about expected cost increases and tax implications for businesses once reform is implemented, including the role of the health insurance exchange and the changing ways that coverage premiums will be determined. The seminar will be presented by The Iasis Group Inc., The Lane Report and the Kentucky Chamber of Commerce, says a chamber release.  

Guidance to employers will be provided on complying with the new rules surrounding insurance reforms and insight to whether Kentucky companies can truly afford it. The seminar is part of a statewide partnership that includes Commerce Lexington, Greater Louisville Inc., the Kentucky Society for Human Resource Management and the Northern Kentucky Chamber of Commerce (Click here for more details or to advance register)

Newly formed Kentucky Health Cooperative gets OK to offer plans in state's health insurance exchange

The new Kentucky Health Cooperative's health-insurance plans have received approval from the state Department of Insurance and will be available on Kentucky's insurance exchange market when it opens in October.

“This is a red-letter day for Kentuckians,” Janie Miller, CEO of the cooperative, said in a news release. “Although health-care cooperatives have offered quality care and lower overhead expenses to members since the 1930s, they’re the ‘newest kid’ on Kentucky’s health insurance block. Efforts are underway to help the public become familiar with the cooperative concept.” The cooperative was formed with a mixture of private capital and federal loans.

Miller, a former secretary of the state Cabinet for Health and Family Services, said the cooperative is like member-owned and member-operated credit unions, rural electric cooperatives and food co-ops. “Think agriculture cooperative extension offices, and consider the impact such organizations have made,” she said. “Doing so makes it easy to imagine the potential, similar value to the citizens of our Commonwealth offered by a health cooperative.”

Joe Smith, chair of the cooperative's board of directors, said “A gateway has been opened to individuals and small businesses seeking more affordable, consumer-friendly, quality-driven health insurance options.”

Details about the cooperative plans offered to individuals and businesses with 50 or fewer employees on the nw state insurance exchange will be announced in the coming months. (Read more at the KYHC website)

Essential-benefits rule expands mental-health and substance-abuse coverage; Ky. needs more facilities to treat newly eligible

The Department of Health and Human Services has defined the 10 "essential health benefits" insurance plans must provide, and it included benefits for mental health and treatment of substance-abuse disorders..

Nearly 20 percent of Americans don't have access to mental-health services and over 30 percent have no coverage for substance-abuse treatment. This rule will expand mental health and substance-abuse treatment benefits to 62 million Americans, according to HHS.

Expanded coverage for mental health and substance abuse treatment programs in Kentucky could bring about a dramatic shift in the delivery of these services. There is already a shortage of treatment options and centers for Kentuckians, and those suffering from addiction have not had coverage for such treatment; the proposed rule will change that.

Recovery Kentucky, a public-private partnership with residential facilities, was created to help Kentuckians recover from substance abuse. It has 10 centers, in Campbellsville, Erlanger, Florence, Harlan, Henderson, Hopkinsville, Morehead, Owensboro, Paducah, and Richmond, according to the 2012 Justice & Public Safety Cabinet report, which included the map below. 

Health-insurance plans must cover the 10 essential benefits beginning in 2014, so the state must prepare for the newly insured in addition to newly covered services. The rule defines what must be covered in insurance plans and bans discrimination based on age or pre-existing conditions. Among the core package of items and services, known as “essential health benefits" are items and services in the following categories:

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

States are given flexibility in implementing the federal health-care reform law with a benchmark approach. The Kentucky Department of Insurance has recommended that the Anthem Preferred Provider Organization plan serve as the “benchmark” plan for the Kentucky Health Benefit Exchange. HHS will review the recommendation and accept public comments prior to making a final decision. (Read more)

Health reform will let insurers charge smokers up to 50 percent higher premiums, which is likely to have a big impact in Kentucky

"Millions of smokers could be priced out of health insurance" because the health-care reform law will let health-insurance companies charge smokers as much as 50 percent more starting next year on individual policies, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation," The Associated Press reports.

The provision is likely to have a major impact in Kentucky, where 29 percent of adults are smokers, a figure exceeded by no other state, and where 25 to 30 percent of people under 65 are estimated to have no health insurance.

"For a 55-year-old smoker, the penalty could reach nearly $4,250 a year" AP reports. "A 60-year-old could wind up paying nearly $5,100 on top of premiums. Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration."

A state health insurance exchange, now being created under the law, will be a place to buy insurance with tax credits depending on income. Gov. Steve Beshear has said he wants to expand the state Medicaid program to cover people in households with incomes up to 138 percent of the federal poverty level, but many Republicans in the legislature are opposed to that because the state would ultimately have to pay 10 percent of the expansion's cost.

The provisions to discourage smoking would allow employees covered by employer plans to avoid penalties by joining smoking-cessation programs,"but experts say that option is not guaranteed to smokers trying to purchase coverage individually," AP reports.

There is concern about the provision's effect on older smokers who "could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge. . . . Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options," AP reports, citing Karen Pollitz, a health-insurance expert with the Kaiser Family Foundation and former deputy director of the Office of Consumer Support in the U.S. Department of Health and Human Services.

Pollitz notes that the reform law lets insurers charge older customers up to three times as much as their youngest customers; charge the full 50 percent penalty on older smokers while charging less to younger ones; and does not allow smokers to use tax credits to offset the cost of the penalty.

And there's a good argument to charge the full penalty, insurance consultant Robert Laszewski told AP: "If you don’t charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers,” said Laszewski. “They are going to have to play defense." (Read more)

Health-care law addresses the most common chronic health problem in children, tooth decay, by requiring coverage for kids

Tooth decay is children's most common chronic health problem, and the 2010 federal health-care law addresses this problem by requiring insurers to cover pediatric dental services. But some advocates are concerned that the new benefits may not be sufficiently comprehensive or affordable, Michelle Andrews writes for The Washington Post.

She notes that by the time children enter kindergarten, more than a quarter of them have decay in their baby teeth. As they age, the problem gets worse and nearly 68 percent of those age 16 to 19 have decay in their permanent teeth, according the the Centers for Disease Control and Prevention. 
   
Beginning next year, the Affordable Care Act requires individual and small-group health plans cover pediatric dental services, unless a plan has a specific exemption under the law. Those services are already part of the Medicaid benefit package, but most Kentucky dentists don't accept Medicaid.
For the expansion to private insurance, "Coverage requirements will be determined by each state within guidelines set by the federal Department of Health and Human Services," Andrews writes.

Jill Midkiff, chief spokesperson for the Cabinet for Health and Family Services, said Kentucky is awaiting the publication of the final rule from HHS, which will define essential health benefits for each state and provide further guidance relating to coverage of benefits. Although no specific publication date for this rule has been announced, she said its release is expected within the next several weeks to allow insurers to modify existing health plans to be made available to individuals and small businesses for purchase through health exchanges by Oct. 1. (Read more)

Haynes: Medicaid case managers threatened, and more bumps ahead, but state beginning to see advantages of new system

By Al Cross
Kentucky Health News

Some Medicaid case managers' lives have been threatened because they have tried to get Medicaid patients to go to primary-care doctors instead of emergency rooms, Health and Family Services Secretary Audrey Haynes said today.

Haynes, right, and two key legislators talked about managed care, the possible expansion of Medicaid under federal health-care reform, and the insurance exchange being set up under the law, at the Kentucky Chamber of Commerce's annual policy conference in Lexington.

The case managers work for insurance companies that oversee Medicaid under contracts with the state. Haynes said the cases of threats have been reported to police.

One key to making managed care work is more prevention, Haynes said, but "People want to go to the emergency room." She mentioned one case of a Medicaid recipient who had gone to emergency rooms 57 times in 30 days.  Under federal law, hospital emergency rooms generally cannot refuse to treat patients who present themselves.

"They will abuse the emergency room because that is the system they know," said Republican Sen. Tom Buford of Nicholasville, chairman of the Senate Banking and Insurance Committee.

Haynes said, "Our people are getting sicker, especially folks on Medicaid, and we can't allow people to use high-intensity . . . high-cost services."

Haynes, an appointee of Democratic Gov. Steve Beshear, and her cabinet have come under fire for not putting more pressure on managed-care companies to make timely payments to hospitals, doctors and other providers. She was not asked about that, but alluded to it: "There have been lots of bumps in the road, and some of them may continue."

But she said the state is only beginning to see what can be gained from the new system, which is supposed to save hundreds of millions of dollars. "We were one of the last states to look at managed care," she noted.

Buford said "I don't disagree with anything she has said," but said the Beshear administration rushed into managed care. "I don't think there's much we can do. We are in this lady's hands on this issue and we'd better support her."

Buford predicted that Beshear would try to expand the Medicaid program to households earning up to 138 percent of the poverty level, a key part of the federal reforms but one the Supreme Court said must be optional for states, not mandatory.

"It will be difficult for him to say no to the expansion of the Medicaid rolls," which the federal government would entirely cover in the first two years, Buford said. That would be reduced to 90 percent by 2020, but Buford predicted that the federal government will ask the states ot accept less because it won't have the money.

Haynes said Beshear would like to expand Medicaid, and a "deep-dive economic analysis" is being done now, with the help of the federal Department for Health and Human Services, to establish the financial parameters. "We probably won't know for several months because we're still getting a lot of guidance from HHS," she said.

Haynes said expanding Medcaid would bring $10 billion to $12 billion to the state, having a significant economic impact, and the managed-care companies came to the state expecting the expansion.

She said HHS is calling the state's effort to set up the insurance exchange, a marketplace for health coverage, a model for other states.

However, Buford said the Senate, which has 24 Republicans and 14 Democrats, in a state that voted against President Obama by a similar margin, will probably allow Beshear to re-issue the excutive order creating the exchange rather than adopting it into law. "That would be impossible to make it through the state Senate in the next two years," he said.

Buford said he favors a federal exchange as "the best bang for your buck on premium costs," but said the state is too far into its own exchange to do that now. However, when the grant funds being used to create it run out, "I don't know what this exchange will be," he said, indicating that the legislature would not authorize the fees on insurance companies that the exchange plans to levy to finance its operations.

Buford made many criticisms of the reform law, but Rep. Susan Westrom, chair of the House Health and Welfare Committee, asked, "If this is such a horrible thing," how would it be passed by Congress and "upheld by the Supreme Court?"

Health reform's exchange won't attract many new insurers to Ky. because it's a small, sickly state, former Medicaid boss says

Kentucky is unlikely to attract many new insurance companies when it starts its Health Benefits Exchange a year from now, a former state Medicaid commissioner told Dawn Marie Yankeelov for a story in The Lane Report.

“Kentucky is not a big attractor,” said Elizabeth Ann Johnson, a lawyer with Stites and Harbison in Lexington office. “We are a small state for insurers, and we have a sicker population statistically – we see high Medicaid use. I would be surprised to see new players flood into the state.”

The exchange, required by the federal health-reform law, will be a "web-based marketplace that includes information necessary so Kentuckians can compare price and quality as they shop for health insurance," Yankeelov notes. "It also will assist employers in facilitating enrollment of their employees into health plans, enable individuals to receive insurance-premium tax credits and subsidies, and qualify small businesses for tax credits. . . . The average employer and employee in Kentucky will be able to find information on the exchange through a planned Navigators program, an outreach and education program that will be staffed by employees trained and certified to discuss the exchange."

University of Kentucky researchers have estimated that as many as 2.4 million Kentuckians may use the exchange. "The high end of this estimate includes approximately 1.4 million individuals currently receiving employer-sponsored insurance through their large employers," Yankeelov notes. Her story has other good background information on the law, the exchange and the problem of the uninsured, who make up about 15 percent of Kentucky's population. Read it here.

Health Benefit Exchange advisory board forms panels to help draft application Kentuckians will use to obtain health insurance

At its first meeting yesterday, the Kentucky Health Benefit Exchange Advisory Board created committees: Behavioral Health, Dental/Vision, Education/Outreach, Navigator/Agent, Qualified Health Plans and Small Business, reports Jodi Mitchell of Kentucky Voices for Health. (Illustration from The Lane Report)

Exchange officials urged the Navigator, Qualified Health Plans and Small Business committees to meet immediately to provide feedback for the draft of the insurance application that must be filed with the federal government by Nov. 16. The Navigator Committee will meet Thursday, Oct. 4 at 1:30 at the exchange offices at 12 Mill Creek Park, off Millville Road near Frankfort.

Anyone interested in serving on the committees is asked to email Carrie.Banahan@ky.gov as soon as possible.  Meetings of the committees will be posted on the Cabinet for Health and Family Services open-meetings site and will soon be available on a new exchange site. The next full meeting of the Advisory Board will be Oct. 25 at 1:30 p.m. at the exchange offices.

More information on state exchanges, which will serve as marketplaces for health insurance under the federal reform law, is available here.

Republicans reject governor's executive order creating health benefits exchange; move is only symbolic for now

Republican legislators voted yesterday against Gov. Steve Beshear's executive order creating the Kentucky Health Benefits Exchange, required by federal health reform. Sen. David Givens of Greensburg offered a motion to the legislative Health and Welfare Committee that said Beshear doesn't have authority to create new agencies, but only to rearrange existing agencies with the legislature's approval, Nick Storm of cn|2 Pure Politics reports.

Democrats at the meeting were caught off guard and ultimately walked out after raising objections, Storm reports. They claimed Beshear was following federal law, and said the legislature should consider the matter when it reconvenes in January. Legislators hoped they would get answers from the Cabinet for Health and Family Services about costs and operations of the exchange, which they didn't get at their meeting last month.

The exchange will match up the uninsured with private health insurance companies, and is designed to serve those who make too much to qualify for Medicaid but don't have employer-sponsored insurance. After Democrats left the meeting, Republicans voted to report the committee's findings to the Legislative Research Commission and the governor. The vote remains symbolic unless it is cited in a lawsuit challenging the exchange, which now seems likely. (Read more)

Governor names board to guide creation of insurance exchange

Gov. Steve Beshear today appointed the board to make recommendations for the state health-insurance marketplace required by federal health reform.

The Health Benefit Exchange Advisory Board, originally planned to include 11 members, was expanded to 19. Beshear explained in a news release, “We need the insight and experience of a variety of Kentuckians to ensure that the exchange not only meets the requirements of the law, but also meets the needs of Kentuckians who will be looking for affordable health insurance.”

"The Health Benefit Exchange will facilitate the purchase and sale of health plans in the individual market; assist small employers in facilitating the enrollment of their employees in health plans; provide one-stop shopping by helping individuals enroll in health plans Medicaid and KCHIP; enable individuals to receive premium tax credits and premium subsidies; and qualify small businesses for tax credits," the release said.

Three public officials will serve as ex-officio representatives, including Insurance Commissioner Sharon Clark, whom Beshear named chair of the board. The other ex-officio members are Medicaid Commissioner Lawrence Kissner and Stephen R. Hall, commissioner of the Department for Behavioral Health and Developmental and Intellectual Disabilities. The other appointees represent various private interests and "will serve for staggered term limits of two or three years as designated by the governor, to ensure the board maintains an experienced membership," the release said.

Consumer advocates or representatives are represented by:
• David Allgood of Louisville, director of advocacy at the Center for Accessible Living.
• Andrea Bennett of Louisville, deputy director of Kentucky Youth Advocates.
• Tihisha Rawlins of Louisville, associate state director of AARP.

Providers based in health-care facilities are represented by:
• Ruth Brinkley of Louisville, president of KentuckyOne Health.
• Julie Paxton of Prestonsburg, an attorney for Mountain Comprehensive Care Center.
• Ed Erway of Lexington, chief revenue officer at  University of Kentucky Healthcare.
• Donna Ghobadi of Lexington, vice president of revenue cycle at Central Baptist Hospital.
Providers not based in health-care facilities are represented by:
• Connie Hauser of Barbourville, a physical therapist.
• John Thompson of Lexington, a dentist.
• Dr. Michael Huang of Lexington, a general internal medicine physician at Kentucky Clinic South, part of UK Healthcare.

Insurers are represented by:
• Deborah Moessner of Louisville, president and general manager at Anthem Blue Cross & Blue Shield.
• Jeff Bringardner of Louisville, president of Humana Inc. Kentucky.
• Carl Felix of Frankfort, chief operating officer at Bluegrass Family Health.

Other representatives are:
• Marcus Woodward of Ashland, a Democratic activist and health-insurance broker, representing insurance agents.
• Gabriela Alcalde of Louisville, a health policy officer at the Foundation for a Healthy Kentucky, representing individual purchasers of health benefit plans.
• Joe Ellis of Benton, an optometrist, representing small employers.

New website explores and outs of Affordable Care Act; useful tool for reporters

One of the most complex and far-reaching pieces of legislation to pass in recent years is the Patient Protection and Affordable Care Act, the federal health-care reform law that, among other provisions, requires Americans to buy health insurance or pay a penalty.

But because of its complexity, journalists can shy away from delving into stories about it. With state insurance exchanges and Medicaid expansion sure to be hot topics during the election season and the legislative session, it’s important to have reliable sources of information about the law. The American Public Health Association has a website that answers many if not most of the questions reporters, and the public, often have.

The website:
• Reviews the fundamentals about the Affordable Care Act and links to information about Medicaid expansion, insurance exchanges and the individual mandate.

• Looks at the implementation timeline of the law.

• Includes fact sheets about the ACA’s prevention funding program, which allows seniors and others to get free preventive care including mammograms and other screenings.

• Breaks down the U.S. Supreme Court’s decision to uphold the law.

The website is a useful tool in any health reporter’s arsenal and is worth a look. (Read more)

Legislative committee delays vote on state insurance exchange, though the move is only symbolic

Kentucky legislators have made another symbolic move against creating a health insurance exchange, with the Interim Joint Committee on Health and Welfare delaying a vote on its creation until next month's meeting. The exchange is one of the cornerstones of the Patient Protection and Affordable Care Act and would allow individuals earning up to to 133 percent of the federal poverty level to buy health insurance through a state-run marketplace.

Rep. Addia Wuchner, R-Florence, made the motion to table the vote on the order Wednesday, saying she does not have enough information about the cost of the exchange and how it will operate. "All we have is the executive order" from Gov. Steve Beshear creating the exchange, Wuchner said. The exchange must be in operation by Jan. 1, 2014. The first year, it will be paid for by the federal government. The second year, it will cost $67 million, but the state will use grant money to pay that sum, reports Beth Musgrave for the Lexington Herald-Leader. In the long term, fees from insurance companies are supposed to pay the costs.

If the committee opts to reject the order, Beshear can override it, Musgrave reports. It's the second time the legislative has acted against the creation of an exchange. Earlier this summer the Capital Projects and Bond Oversight Committee voted along party lines against a lease that would have housed employees of the exchange. Finance Secretary Lori Flanery has the power to overturn the vote and rent the space. (Read more)

State insurance exchanges are good for farmers and other rural residents, farmers union president writes

Farmers and rural Americans have much to gain from state health-insurance exchanges under federal health reform, since "Rural residents often have the hardest time getting health insurance," the president of the Wisconsin Farmers Union argues in an op-ed piece in Madison's Capital Times.

People who live in rural areas "are predominantly self-employed and run small businesses, with insurance costs too high because of small risk pools," Darin Von Ruden points out. "They often pay way too much for terrible coverage. Some are uninsurable because of the high-risk nature of farming. Many can't pay high premiums for the current system of individual and family coverage." Insurance exchanges will "broaden risk pools" and bring down the overall cost, he argues. 

Wisconsin has been one of the firmest states against implementing federal health-care reforms, including the exchanges, which will be marketplaces where people can choose from a variety of state-approved health-insurance plans. This month, Republican Gov. Scott Walker said he would not take any action to implement the law until after the November elections. After the U.S. Supreme Court upheld the law, Democratic Gov. Steve Beshear of Kentucky issued an executive order creating a Kentucky exchange. States have the option to run their own exchange or let the federal government do it for them.

Von Ruden said exchanges are "critical" for Wisconsin's farmers and rural communities. "It's disappointing, to say the least, that our legislative majority would be dragging their feet on getting this done," he writes. "I can't imagine why any of them would want to wait on this. Creating our own state exchanges keeps the control in Wisconsin." He concludes, "Every American deserves health care that is comprehensive, affordable and accessible, regardless of occupation or geographic area." (Read more)

Forums set to explain state insurance exchange and its new opportunities for coverage, little known to most who will be eligible

By Tara Kaprowy
Kentucky Health News

Now that Gov. Steve Beshear has issued the order to create a state health insurance exchange, the state is scheduling public forums to explain it. Rachel Klein, the executive director of Enroll America, said 78 percent of uninsured Americans "have no idea that there is new health coverage coming." 

Klein's nonprofit organization, based in Washington, D.C., is working with local and state groups like the Kentucky Voices for Health coalition to help spread the word that many will be eligible for health care under the exchange, part of national health reform.

Under the exchange, people who earn up to 400 percent of the federal poverty level will be able to buy private health insurance, and most will have their premiums partly paid for through federal subsidies. They will be able to get information about various policies and enroll online.

Officials from the state Department of Insurance and Cabinet for Health and Family Services will hold six educational forums in the coming days to talk about the exchange the federal health-care reform law. Here is the schedule:

• Erlanger: 1-3:30 p.m. July 25, Northern Kentucky University, The METS Center
• Louisville: 1-3:30 p.m., July 26, University of Louisville Shelby Campus
• Prestonsburg: 1-3:30 p.m., July 27, Big Sandy Community and Technical College
• Somerset: 1-3:30 p.m., Aug. 1, Somerset Community College
• Paducah: 1-3:30 p.m., Aug. 16, West Kentucky Community and Technical College
• Owensboro: 8:30-11 a.m., Aug. 17, Owensboro Community and Technical College

Once the exchange is set up, Klein said it will be important for the sign-up process to be easy. States should make the application itself easy to read and be sure there is a lot of help available to those enrolling, she said. "It's hard to underestimate the incredible need for assistance," Klein said. Another key piece is to make sure the exchange's technology "coordinates well with other systems that are already in existence," she said.

The exchange will include the federal-state Medicaid program. Kentucky has the option of expanding its program up to 133 percent of the federal poverty level (with a sort of fudge factor up to 138 percent). Right now, only those earning up to 59 percent qualify. Expansion would cover almost 300,000 more Kentuckians, Democratic U.S. Rep. John Yarmuth of Louisville said last week. The  has not yet released an exact number of how many would be affected.

As of last Friday, Kentucky was the 16th state to commit to an exchange. States have until Nov. 1 to inform the federal government if they intend to set up an exchange, and have until Jan. 1, 2014 to get them up and running.

KVH said it will also help educate the public. Executive Director Jodi Mitchell said she is staying connected with the state to keep abreast of the status of the exchange. "The cabinet is going to do it the way the cabinet is going to do it," she said. "The challenge is for us to keep involved and hold them accountable as they proceed."

Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Beshear tells feds he plans to create an insurance exchange

Gov. Steve Beshear. Photo by The
Courier-Journal

Gov. Steve Beshear has re-confirmed his plans to create a state health insurance exchange, this time telling the federal government of his intention.

Beshear sent a letter to Health and Human Services Secretary Kathleen Sebelius Tuesday saying he plans to issue an executive order soon to create the exchange, The Courier-Journal reports. After the U.S. Supreme Court upheld the federal health-care reform law, Beshear announced he would create the exchange.

The exchange will be a marketplace to shop for different packages of state-approved health insurance and will be available to people who earn up to 400 percent of the federal poverty level. To offset the cost of their premiums, those participating in the exchange will receive subsidies in the form of tax credits. The Medicaid program will also fall under the exchange's umbrella.

If they choose to run their own exchange rather than have the federal government do it for them, states must have it up and running by Jan. 1, 2014. Beshear said Kentucky has been "systematically preparing to meet the implementation deadlines set forth in the law." It has already received more than $65 million from the federal government to plan for the exchange's creation.

Kentucky is the 16th state to commit to creating an exchange. (Read more)

Who is on Medicaid already? Not all poor Kentuckians, foundation president says on op-ed distributed to Kentucky newspapers

By Susan Zepeda
President and CEO, Foundation for a Healthy Kentucky

In the wake of the recent Supreme Court decision upholding much of the Affordable Care Act, states have many factors to weigh. Importantly, SCOTUS affirmed the right of states to opt out of the expansion in Medicaid coverage envisioned under Affordable Care, without penalty. Some state and national leaders have been heard to say that the poor are “already covered under Medicaid.”

Currently, nearly 15 percent of Kentuckians lack health insurance, including approximately 290,000 low-income adults who are uninsured and would be eligible for the Medicaid expansion. It may surprise many to know that about eight out of 10 uninsured Kentuckians are working adults. According to the Kaiser Family Foundation, Kentucky could benefit the most, compared to other states, as a result of the Medicaid expansion — with about 57 percent of our uninsured adults newly eligible for coverage.

While many believe that Medicaid provides coverage for all low-income individuals, Medicaid coverage is actually quite complex, with significant state-to-state variation. In Kentucky:
• Working parents are eligible for Medicaid only if they earn 62 percent or less of the federal poverty level - less than $8,926 per year for a family of two.
• Jobless parents are eligible if their total income is 36 percent or less of the federal poverty level – less than $5,144 per year for a family of two.
• Pregnant women are eligible if their income is up to 185 percent of the poverty level (about $20,665) but lose this eligibility, dropping to the lower income limits above, after the child is born.
• Legal immigrants, child or adult, in the U.S. for less than five years, are not eligible for Medicaid. Undocumented immigrants are not eligible for Medicaid coverage regardless of how long they’ve been in the U.S.

Susan Zepeda

In short, not all Kentuckians living in poverty are covered by Medicaid. If Kentucky does not take the option of expanding Medicaid, many individuals and families living in low-income and poor households will be left without health-insurance access.

The new law also creates health insurance exchanges, and places limits on out-of-pocket expenses on health insurance depending on income level. While these subsidies will allow many low-income parents and individuals to purchase health insurance, they appear only to be available for families above the poverty level.

And other pieces of the law were developed with the assumption that all states would expand Medicaid coverage. Because of this assumption, cuts to other federal health funding are built into the continuing roll-out of the Affordable Care law: For example, nationally Disproportionate Share Hospital (DSH) funding has provided an average of 95 percent of uncompensated care costs for state-owned hospitals; 69 percent of uncompensated care for local public hospitals; and 38 percent of uncompensated care for private hospitals. The law will reduce DSH funding by $14 billion over 10 years, starting in 2014.

This funding decrease to key providers was supposed to be offset by the increase in Medicaid coverage, since the number of uninsured individuals seen at hospitals would drop significantly under the Medicaid expansion. If Kentucky opts out of the Medicaid expansion, however, state, local, and private hospitals could be faced with sharp increases in uncompensated care (care provided but not paid).

The coming months will present opportunities for our state leaders to look at the sometimes difficult health realities of our Commonwealth and make decisions that will best serve the health of all Kentuckians. To quote the late Daniel Patrick Moynihan, “Everyone is entitled to his own opinion, but not to his own facts.”

Susan G. Zepeda is president and CEO of the Foundation for a Healthy Kentucky, a non-profit, non-partisan philanthropic organization that invests in communities and informs health policy through research, education and grant making.

As high court upholds health care law, Beshear orders creation of state insurance exchange; questions remain about Medicaid

Journalists wait to hear the Supreme Court's ruling.
(Associated Press photo by Evan Vucci)

By Tara Kaprowy
Kentucky Health News

Voting 5-4, the U.S. Supreme Court has upheld the federal health-care reform law, the core of which requires individuals to get health insurance or pay a fine.

The decision means about 280,000 more Kentuckians will qualify for Medicaid, and about 220,000 will qualify for insurance under a state exchange where they can choose from various policies. More than 900,000 Kentuckians who were previously denied coverage for pre-existing conditions will now also be able to get coverage.

"More people will have access to health insurance is the short answer when it comes to the impact this will have in Kentucky," said Anne Hadreas, attorney for the Kentucky Equal Justice Center. "People with low incomes and moderate-income people will not have to worry about choosing between getting a breast cancer screening and putting food on the table."

Those who are newly eligible will be able to get health insurance in two ways. Individuals with an income as much as 400 percent above the poverty level will be able to buy insurance through a state insurance exchange, an insurance marketplace where people can choose from several plans. As he said he would, Gov. Steve Beshear ordered the creation of such an exchange today, noting that "Kentucky has been systematically preparing to meet the implementation deadlines set forth in the bill as a precautionary matter." Individuals who are part of the exchange will get federal subsidies to help pay their premiums.

The other means to get coverage will be through the law's expansion of Medicaid coverage. People who have an income 133 percent above the federal poverty level will qualify for Medicaid starting in 2014.

Though the Supreme Court also upheld the the law's Medicaid expansion, it ruled the federal government could not take away existing Medicaid funding from states that decide to opt out of the expansion. If Kentucky opts to expand Medicaid, it will eventually cost the state money. For the first five years, the federal government will foot the bill for those who are newly eligible. But in 2019, states will have to start paying 10 percent of that sum. Beshear has expressed concerns over how the state will do that. Spokespersons for Beshear and Senate President David Williams both said they are researching the matter.

John Barro of Bloomberg News predicts that all states will opt for expansion because the federal government will pay for it in the early years. "That's a pretty big carrot," he writes. "States that refused to expand Medicaid will be rejecting nearly free federal money. Such a rejection would be tantamount to saying that government health insurance for low-income people is so undesirable that a state is not even willing to pay 10 cents on the dollar for it." For more on Medicaid, the states and the politics of the issue, see this post on The Rural Blog.

At the center of the Supreme Court debate was whether the government can force people to buy health insurance, a provision often referred to as the individual mandate. Insurance companies agreed to stop denying coverage due to pre-existing conditions because of the mandate, which grows their pool of customers by 30 million people. But if the mandate had been struck down and insurance companies still couldn't refuse customers because of pre-existing conditions, premiums would have skyrocketed.

The Obama administration said the individual mandate was constitutional under the commerce clause of the Constitution, which states that Congress can use its powers to regulate interstate commerce. Chief Justice John Roberts rejected that argument but sided with the court's four liberal justices because a penalty for refusing to buy health insurance — which is part of the mandate — is the equivalent of a tax.

Aside from more Kentuckians being eligible for health insurance, the law will mean:
• Children will be able to stay on their parents' insurance up to the age of 26.
• The Medicare "doughnut hole" in prescription drug coverage will be eliminated, something that will impact 129,000 Kentuckians.
• Health plans will be required to cover preventive services like screenings.

And, though "today's ruling is no way going to diminish the toxicity and politicking on both sides," most people agree children will benefit, said Terry Brooks, executive director of Kentucky Youth Advocates. He said the law provides additional oral health coverage, allows foster children to keep health insurance coverage until the age of 25; and provides "a dedicated stream of revenue for school-based health services."

But Sen. Mitch McConnell, R-Ky., issued a statement calling the law "terrible," saying it has "limited choices," "increased health care costs" and "made it harder for American businesses to hire." He said Congress must act to repeal what he called a misguided law.

Williams called the ruling a victory for President Obama and Beshear but not for Kentucky's small- or medium-size businesses owners.

Whether Kentucky has the medical infrastructure for 500,000 more people having health insurance is uncertain. In Jefferson County alone, 455 primary-care doctors will be needed by 2020 — almost as many who work in medical practices now, Patrick Howington reported for The Courier-Journal this year. "I think the provider shortage is definitely a concern," said Jodi Mitchell, executive director of Kentucky Voices for Health. "That's something to be looking at."

As for how individuals should proceed, Mitchell said Kentuckians "need to stay informed during implementation and stay engaged."

Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Former head of Massachusetts health exchange says it's better to offer fewer, well-defined plans than set general criteria

With  Kentucky stakeholders discussing their options to set up a state-run health insurance exchange — something Gov. Steve Beshear said last week he intends to do if the Affordable Care Act is upheld by the U.S. Supreme Court — research shows the fewer plans offered in the exchange, the better.

An article in Health Affairs says officials should follow the lead Massachusetts' health-reform system when creating their own exchanges. "A hands-on exchange with the power to set standards on top of the federal health-care law will help prevent consumers from being 'overwhelmed' by the process of buying insurance," reports Sam Baker for The Hill's global affairs blog.

The Health Affairs article's lead author, Rosemarie Day, is a former deputy director of the Massachusetts exchange. She said consumers prefer choosing from "a handful of carefully vetted, clearly described health-care plans," Baker reports. The model used in Utah to allow any plan that meets criteria to be featured in the exchange is less popular, the paper found, but was more popular among conservatives.

"Findings from consumer research emphasized the value of limiting insurance plan choices on the exchange," the analysis states. "Specifically, early focus groups showed that consumers wanted four to six carrier options at 'low, medium and high' benefit levels." (Read more)