Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Small business owners were told Tuesday to brace for change, expect to pay more for their employees’ health insurance and to hang on to their insurance agents.

“It’s looking more and more like (health) insurance brokers are going to be getting paid less when health reform takes place,” said Ken Daniel, director of governmental affairs at the Topeka Independent Business Association. “That means the good ones are going to be harder to find. So, if you’ve got one now, keep him.”

Daniel, who’s also a member of the Kansas Health Policy Authority board, was part of a five-member panel that addressed health reform issues during a two-hour forum at Washburn University. The event was sponsored by the National Federation of Independent Business, the Topeka and Wichita independent business associations, and the Kansas Association of Insurance Agents.

Other panel members:

• Linda Sheppard, director of the Health and Accident Division at the Kansas Insurance Department ;

• Melissa Hungerford, executive vice president of the Kansas Hospital Association;

• Brad Clothier, chief operating officer with Preferred Health Systems, a health insurance company;

• Thomas Byron, an independent insurance agent for more than 35 years.

Byron said there “wasn’t any doubt” in his mind that health reform will force insurance companies to put together benefit packages intent on keeping down premiums. At the same time, he said, companies will find themselves having to meet expanded-coverage mandates that will result in fewer choices.

“Choice in this process is just going to get smaller and smaller and smaller,” he predicted.

Not allowing insurers to exclude people with pre-existing medical conditions from their plans will be popular, he said, but it will also limit the companies’ options when putting together benefit packages.

Byron said he‘s worried that under health reform the low-cost health savings accounts and high-deductible policies that many small businesses now offer employees will be ruled inadequate and will be eliminated.

Consumers having fewer choices, he said, will lead to higher costs.

Others on the panel said they were concerned that physician offices and safety-net clinics in Kansas will not be able to keep pace with the thousands of uninsured low- and modest-income adults who, under reform, will become insured.

Starting in 2014, many of these adults will be eligible for Medicaid.

Hungerford said the hospital association supports the Medicaid expansion. But the Kansas system for figuring out who’s eligible, she said, is already gridlocked.

“Our concern is that the Medicaid backlog we have now is already significant,” she said. “Adding a whole slew of new people is just going to overwhelm the administrative process.”

Kansas Health Policy Authority officials have said the state’s clearinghouse for processing Medicaid and children’s insurance applications has a 20,000-appication backlog. The authority oversees the state's Medicaid program.

Despite the pitfalls accompanying reform, Hungerford said hospitals remain optimistic.

“All of us can point to the disconnects between costs and mandates and penalties and how all this is going to work,” she said. “But at the same time, we all know the system is broken the way it is now. There have to be changes. There have to be different incentives. We can’t keep going the way we’ve been going.”

Sheppard encouraged the audience to be patient, noting that many of the regulations governing reform have yet to be worked out.

“There’s a lot of work to be done in a short amount of time,” she said. “I can tell you my office is participating in two or three (national) conference calls a day on this.”

Dick Knoll, who owns a four-employee travel agency in Topeka, was among those who attended the forum.

“We don’t offer health insurance to our employees now,” he said, “but after today, I have a better idea of what my options are going to be down the road. I see there’s a lot of uncertainty. I know I’m going to have to do something, but I’m not going to make any drastic changes right away.”