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Sept. 3, 2012
TOPEKA State insurance regulators are preparing a recommendation for Gov. Sam Brownback on what basic benefits should be available to Kansans who seek health insurance through the new online purchasing exchange that federal officials expect to be operational here within about 16 months.
A three-hour hearing to collect public input on what should constitute the state’s “essential health benefits” benchmark plan is scheduled for Wednesday. It is set to start at 9 a.m. in Shawnee Room A at the Maner Conference Center, which is next to the Capitol Plaza Hotel in Topeka (map).
“Our plan is to get some summary information (including a recommendation) over to the governor within a week or so after the hearing is over, and at that point it will be up to him to decide if he wants to make an election,” said Linda Sheppard, director of the accident and health division at the Kansas Insurance Department. Sheppard also is the agency’s project manager for matters dealing with implementation of the Affordable Care Act, the controversial federal health reform law that Brownback has pledged to have no part of until after the November presidential election.
Brownback, like other conservative Republicans, opposed the Affordable Care Act, first as a U.S. senator and then when he campaigned for governor in 2010. In August 2011, under pressure from GOP party activists, he spurned a $31.5 million federal “innovator” grant to Kansas to help the state create a health insurance exchange model for use here and possibly in other states.
He then said his administration would have nothing to do with “Obamacare” until after the U.S. Supreme Court ruled on the reform’s constitutionality. After the court largely upheld the law in June, he said he would do nothing to implement it until after the election.
Republican presidential nominee Mitt Romney and most Republicans running for Congress have vowed to repeal the law as a first order of business, if elected. In Kansas, conservative Republicans continued to use the reform law to bludgeon more moderate opponents in the party’s August primaries and were mostly successful with the tactic.
Insurance Commissioner Sandy Praeger is a moderate Republican who helped craft portions of the Affordable Care Act as part of her work on behalf of the National Association of Insurance Commissioners. She has consistently said that the law has shortcomings but allows flexibility to states in how it is implemented in some areas, and that Kansas should exercise those options in order to have programs more in tune with the state’s needs and desires.
The health reform law stipulates that the federal government will run the insurance exchanges in states that choose not to create their own and will have them up and running by Jan. 1, 2014. Likewise, in states where governors decline to choose the models for “essential benefits” offered through the exchanges, the federal government will do so.
Sheppard said if the federal government chooses the benchmark plan for Kansas, it could be one that is less affordable than a plan selected by those more familiar with the Kansas market.
Spokesmen for Brownback this week said they were unable to say whether the governor would pass on making a recommendation regarding essential benefits as he did on returning the exchange grant.
According to Sheppard, federal officials have set a Sept. 30 deadline for hearing from governors on their benchmark plan choices, though she also said there were unofficial indications from federal officials that the deadline might be “soft.”
She said the insurance department intended to adhere to the published deadline.
Federal health officials also have set a Nov. 16 deadline for states to indicate whether they intend to partner with the federal government on the exchanges. A partnership approach still would leave the federal government in charge of the exchange but would allow state officials more input on how it is put together and managed.
Under regulations developed by the U.S. Department of Health and Human Services, states are free to choose the core benefits for plans offered through the exchange so long as they meet broad federal guidelines and match benefits found in the state’s most widely used basic insurance plans.
• Ambulatory patient services
• Emergency services
• Maternity and newborn care
• Mental health and substance abuse disorder services, including behavioral health treatments
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive services and chronic disease management
• Pediatric services, including oral and vision
A consulting firm, Milliman Inc., prepared an analysis for the insurance department that considered the possible benchmark plans that Brownback could choose from to meet the state’s essential benefits requirement. It concluded that none of the nine were sufficient to meet the broader federal requirements and that the cost difference between the most and least expensive was less than 1 percent.
Milliman concluded that in order to meet federal guidelines, the state likely would need to add pediatric vision care, pediatric oral health care and habilitative services to whatever existing plan it chose as its essential benefits benchmark. There is no generally accepted definition of habilitative services, and HHS guidelines remain somewhat murky on what they would entail with respect to the benchmark plan that a state chooses.
Milliman also reported that the state might need to supplement benefits for treating mental health and substance abuse disorders and preventive services.
Also noted in the firm’s findings was that one potential benchmark offered through the State Employee Health Benefit Plan covered autism services, which the other potential benchmarks did not.
Should Kansas choose the State Employee Health Benefit Plan as its benchmark, that could have consequences for premium costs, though the report found that those potential added costs were “not well defined.”
A major concern in the state’s selection of a benchmark plan is finding the balance between adequate coverage and cost.
“The state has to develop a benchmark that will provide an adequate package while at the same time not creating a benefit package that is so expensive that it will be unaffordable to the consumers we're trying to help,” said Anna Lambertson, executive director of the Kansas Health Consumer Coalition. “We're still looking at the data the insurance department provided … to develop our comments” for Wednesday’s public hearing.
Lambertson said her organization was still reviewing the potential consequences of including autism services in the benchmark plan.
“I do know the autism coverage is a concern for us,” she said. “I don't know if it would push the cost up … but it's one of those benefits that kind of hangs in the balance.”
Insurance department officials said they were expecting a number of individuals and organizations to present testimony Wednesday and that they plan to release a full list of speakers and a meeting agenda Tuesday.
The KHI News Service is an editorially independent initiative of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Find more about the News Service at khi.org/newsservice or contact us at (785) 783-2529.