In a little under seven months, more than 330,000 Kentuckians in need of health coverage will be able to buy insurance—many at reduced rates—through a state-based insurance market that will be available online.
The state-based market, or “exchange,” is one of 17 state-based exchanges being organized in 16 states and the District of Columbia to comply with the federal Affordable Care Act, known far and wide as Obamacare, which requires most Americans to have health insurance coverage beginning Jan. 1. During open enrollment from Oct. 1 of this year through March 31, 2014, individuals, families, and small businesses will be able to research costs, determine eligibility for assistance, and buy health coverage via the state-based web site “Kynect.ky.gov”. Coverage will begin on Jan. 1, 2014 unless a current challenge to the exchange—which was created in 2012 by Executive Order of Gov. Steve Beshear—is upheld by the courts, upending the planned effective date for coverage.
Right now, five insurance companies (Anthem, Humana, Bluegrass Family Health, United Healthcare, and Kentucky Health Cooperative) indicate that they will offer coverage through the exchange. Combined with an expansion of the state Medicaid program under Obamacare and coverage by the Kentucky Children’s Health Insurance Program, the exchange should increase the number of insured Kentuckians to more than 600,000.
And, at least initially, the exchange won’t cost the state any money. It is being funded through Jan. 1, 2015 with federal dollars and with self-generated revenue thereafter, according to state officials.
While it remains to be seen how smoothly the state-based exchange will work in Kentucky, competition in the new marketplace is expected to be robust, both here in the Bluegrass and in states where exchanges will be run entirely by the federal government. Federal officials told the media in May that the federal law is drawing more individual health market competition into states, especially those states where the federal government will operate exchanges.
In 19 states with federally-run exchanges (27 states will have federally-operated exchanges, according to the Kaiser Family Foundation), preliminary applications filed by insurers have shown increased competition among insurers, even in states “long dominated by a few carriers,” a May 31 article in The New York Times states. The article says that at least one new insurer is expected to enter the market in three-fourths of states with federally-run exchanges, with health plans offered by five or more companies available to each consumer.
Competition, of course, lowers costs, which is why having only one or two companies dominating a state’s individual insurance market is never a good thing. Kentucky struggled for many years to increase the number of individual health insurers here after around 40 insurers left the states when “guaranteed issue” legislation passed the General Assembly in the 1990s. Under guaranteed issue (repealed by the state in 2000), insurers must issue coverage to applicants regardless of their health status or preexisting health conditions. Kentucky also had something called “community rating” at the time (repealed in 1998) which prohibits insurers from basing premiums on health status, preexisting conditions, or gender.
Several years after the repeal of guaranteed issue and community rating, Kentucky has five private insurers operating in the state’s individual insurance market, according to the state Department of Insurance. Only two of them, Anthem and Humana, are among the five companies that have filed an intent to operate under the state’s exchange, which means more companies are entering the market here. In other words, we should see some of that increased competition we’re hearing about in The New York Times here at home, too.
But all that aside, Obamacare remains very controversial.
The lawsuit pending here in Kentucky challenges whether Kentucky’s exchange is legal, since it was created by order of the Governor and never given the approval of the Kentucky General Assembly. Moreover, millions of Americans contend that the federal government should not be able to force people and businesses to buy health insurance. Opponents of Obamacare also call it a “job killer,” and there is some evidence to support that claim based on recent news reports of part-time workers who have had their hours cut by large employers. (Large employers are required under Obamacare to offer coverage to part-time workers who are on the clock at least 30 hours per week.)
Those who support Obamacare call attention to the benefits it will provide the newly-insured, including coverage for “essential benefits” like doctor’s visit, prescriptions, emergency care, pregnancy care, hospitalization, pediatrics, and more. And, they are quick to add, insurance rates will be reduced through subsidies and tax credits based on income. Small businesses will also find coverage affordable, supporters say, with tax credits available to many businesses with 25 or fewer full-time employees.
We will not know the full effect of Obamacare until probably sometime in 2015. For now, it is important for Kentuckians to be aware of the state exchange, the Kynect web site, and the options available to us as January 2014 approaches.
Have a good week.