Non-profit led insurance exchange urged

0 | Health Reform

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Rep. Brenda Landwehr, R-Wichita.

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— A key player in the state’s health reform debate says she will ask Gov.-elect Sam Brownback to consider putting a nonprofit agency in charge of a yet-to-be-formed health insurance exchange.

“If we’re going to have one, I’d rather have one that’s run by a nonprofit agency than one that’s run by the government,” said Rep. Brenda Landwehr, R-Wichita.

The Affordable Care Act requires states to have exchanges up and running by Jan. 1, 2014. The Web-based exchanges will be the portal through which many of the state’s estimated 340,000 uninsured will purchase coverage, most with the help of federal subsidies.

States have the option of having their exchanges run by a nonprofit agency, the state or the federal government.

Republican Insurance Commissioner Sandy Praeger is the state official tabbed with much of the responsibility for implementing the reform law. She said Landwehr isn’t alone in proposing that a nonprofit entity run the exchange.

“The decision of what the exchange will look like is up to the governor and to the Legislature, but I have to say I’m hearing a lot of support for it being run by a nonprofit,” Praeger said.

Landwehr, a critic of the federal health reform law, said she would try to meet with either Brownback or his staff within the next 10 days to discuss how to move forward with its implementation pending the outcome of several legal challenges.

“I feel like we’re between a rock and a hard place,” she said, addressing a Tuesday roundtable discussion hosted by the Joint Committee on Health Policy Oversight.

“We’re here to do what’s in the best interest of the state, but we don’t know if (health reform) is going to be repealed or if the federal government is going to come through with all the funding like it says it will,” said Landwehr, the committee’s chairwoman.

Landwehr said she would also encourage Brownback to “look for ways” to monitor and coordinate the state’s response to health reform initiatives.

“This is a major moving target,” she said. “No one knows what it is right now.”

Several health officials took part in the discussion.

Bill Sneed, a lobbyist representing several health insurance companies in Kansas, said it’s economically unrealistic to expect insurance companies to cover high-risk populations – people with pre-existing conditions, for example – if the mandate requiring most Americans to buy health insurance is rescinded.

“For this to really work,” he said, “everybody’s going to have to be insured.”

A federal judge in Virginia on Monday upheld most of the reform law but ruled that the so-called individual mandate was unconstitutional. Previously, two other federal judges declared the mandate constitutional. The competing rulings make it all but certain that the issue will be decided by the U.S. Supreme Court.

Jerry Slaughter, executive director of the Kansas Medical Society, said the state’s doctors are eager to see many of the estimated 340,000 Kansans who today are uninsured qualify for Medicaid or receive help in purchasing private coverage. But he said many of his members are concerned about their physical and financial capacity to care for large numbers of new Medicaid patients.

“The assumption has always been that if we can get Medicaid to pay 80 percent of what Medicare pays, we’ll be all right," Slaughter said. “But Medicare just barely covers the cost of providing care. That’s why, in the provider community, you’re hearing a fair amount of angst.”

Six of the committee’s 12 members attended the Tuesday session. Six were absent.

Last week, committee members agreed to encourage Brownback and Gov. Mark Parkinson to consider supporting Praeger’s pursuit of a federal “early innovator” grant that, if successful, could cover much of the cost to develop an exchange.

Grant applications are due Dec. 22.

Praeger assured the committee that her office would meet the deadline.