Health Insurance Exchange Details Still Unknown
In less than four months, a cornerstone of the nation’s health care law will begin to take shape: the mandate that all individuals have health insurance.
But as the start of open enrollment draws near, key details about Ohio and Kentucky’s insurance exchanges – including what plans will be offered and how much they’ll cost – remain unknown.
Across America, an Oct. 1 deadline is approaching for states and the federal government to get web-based health insurance exchanges running and ready to enroll millions of people. The online marketplaces will serve as the main way for individuals and small businesses to compare health insurance plans, costs and find out if they’re eligible for subsidies or other cost-saving benefits.
Starting Jan. 1, the federal Patient Protection and Affordable Care Act requires everyone to have health insurance, or pay penalties.
Ohio is among 32 states that have opted to let Washington run their health insurance exchanges. Kentucky and 18 other states will run their own.
In both states, major public education programs aimed at spreading the word about how the exchanges will work are weeks to months away from being in full swing.
Kentucky launches education campaign
In Kentucky, Gov. Steve Beshear announced this month a public-education campaign for his state’s exchange.
Called kynect, and accessible at http://www.kynect.ky.gov, the site will eventually serve as Kentucky’s main exchange web portal. For now, the site offers general information about how the exchange will work. More information, according to the site, will be available as enrollment gets closer. The Kentucky Office of the Health Benefit Exchange, within the Kentucky Cabinet for Health and Family Services, will oversee its operations.
Anthem Blue Cross and Blue Shield, Bluegrass Family Health, Humana, Kentucky Health Cooperative and United Healthcare have submitted letters of intent to offer plans.
By September, state health officials said they expect to have a full list of health plans and their rates available at kynect.com.
Reagan Hunt, executive director of Kentucky Voices for Health, said work is also underway to connect with nonprofits, churches, community health departments and extension offices to help get the word out about the exchange.
“The state has enough money to do the outreach and education that needs to be done,” said Hunt. “We’re going to be ready.”
Ohio’s top insurance official, Lt. Gov. Mary Taylor, said she still doesn’t have “a good sense of how many plans will be sold on exchange at this point.”
State insurance officials face a July 31 deadline to review plans to be offered on the exchanges. Ohio’s plans are expected to be filed by insurance companies within “the next couple of weeks,” Taylor said in a recent interview.
The Ohio Department of Insurance will have regulatory authority over the insurance plans being sold on the exchange, but the federal government will be solely responsible for setting it up and running it.
So far, no insurance plans have officially filed with the department, Taylor said. United Healthcare has informed Ohio that it will not offer a product on the exchange, she said.
Anthem Blue Cross and Blue Shield is “preparing to offer a product on the exchange, but that is not definitive,” said Kim Ashley, a spokeswoman for the company.
Part of the challenge involves changing and yet-to-be-established rules coming from the federal government that insurance companies must follow in order to offer plans on the exchange, Taylor said.
For example, Ohio insurers that offer plans on the federal government’s exchange for individuals must also offer plans on the exchange for small businesses, known as Small Business Health Options Program (SHOP). The same isn’t true, however, in states such as Kentucky that are running their own exchanges.
The SHOP exchange is intended for small businesses with 100 or fewer full-time employees to find affordable health insurance. Starting next year, the federal government will impose penalties on businesses with 50 or more full-time employees that don’t provide health-insurance coverage to workers logging 30 or more hours a week. If those employers choose not to offer health coverage, they will face a penalty of $2,000 for each full-time worker, excluding the first 30.
To complicate matters, last month, the federal government proposed delaying the SHOP program’s full roll out to 2015 in states that are using the federally-run exchanges.
How will exchanges enroll the uninsured?
More than 20 million Americans are expected to turn to the exchanges as they open for business this fall.
Many will be checking to see if they’re eligible for federal subsidies to help offset their health insurance costs or for Medicaid. Tax credits will be given to those earning less than 400 percent of the federal poverty level, about $46,000 a year for one person, or $94,000 for a family of four. Roughly 916,000 people in Ohio and 375,000 in Kentucky are expected to be eligible for those credits, which will only be offered to those buying plans on the exchange.
“One of the biggest challenges the exchanges will face is how to enroll the nation’s millions of uninsured,” said Sam Gibbs, senior vice president of eHealthInsurance. The Mountain View, Calif., firm was the nation’s first to sell Internet-based health insurance in 1998 and it’s licensed in all 50 states.
Insurance experts say a robust pool of exchange buyers will be needed in each state to keep costs low and spread the risk for insurance companies.
In the absence of effective public education programs, those risks increase, experts say. “The larger the pool of people enrolled, the better,” says Gibbs. “If you only get people who have been denied insurance before because of a pre-existing condition or illness, it’s going to get really expensive, early.”
The federal government announced in April plans to spend $54 million to hire nonprofit groups and individual “navigators” to educate and enroll consumers in the federally run exchanges.
Ohio will get about $2.26 million. Kentucky’s share is $4.7 million. Groups applying to be navigators are preparing their applications now, said Mary Wachtel, senior health policy associate at Columbus-based Health Policy Institute of Ohio.
“A lot of these folks will be newly eligible for health insurance, and may have no history of insurance or recent history, so it makes sense that they would need help,” she said. “While I think $2.3 million is significant, it’s likely not adequate given the needs and the consumers coming to the exchange.”
In addition to the$4.7 million sent to Kentucky to fund public education efforts this year, another $6.6 million will be given to the state in 2014.
That is in addition to about $15 million coming to Kentucky over both years to help cover the costs of navigators, said Jill Midkiff, a spokeswoman for the Cabinet for Health and Family Services.