Kansas insurance officials hope to give federal insurance exchange a local flavor

And are sharing employers' frustrations with the IRS regulations dealing with the Affordable Care Act

2 | Health Reform, Insurance

— Kansas is among the states where federal officials will run the new health insurance exchange but the state’s top insurance regulators said they hope to inject a local flavor.

Insurance Commissioner Sandy Praeger said her agency has been in discussion with the feds about having some of the more complex calls to the exchange’s toll-free helpline roll over to her department so that Kansas consumers come in touch quickly with local people more familiar with the Kansas insurance plans offered in the exchange and the governing regulations.

“We’re discussing how we can make a quick, relatively seamless transfer,” of appropriate calls to the Kansas Insurance Department, Praeger told KHI News Service.

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Insurance Commissioner Sandy Praeger.

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“Our expectation is if you call the 800 number and if you have really simple questions like ‘I don't think I have the proper web address for the exchange or my password isn't working,’ a very operational question, they would handle it,” said Linda Sheppard, the insurance department’s director of health care policy and analysis. “But if it’s questions specifically related to anyone's benefits or coverage, those would be forwarded to us.”

The department already routinely fields calls from consumers with complaints about denials of insurance claims or delays in processing, so it only makes sense to carry that practice forward with implementation of the Affordable Care Act, Praeger said.

The exchange or marketplace is scheduled to be operational in each state by Oct. 1 with coverage purchased through the exchange effective Jan. 1.

'Hiccups along the way'

Some Republican officials have questioned whether the exchanges will be up and running by Oct. 1. Praeger, who has been generally supportive of the new law, is not among them. But she predicted it wouldn’t be a smooth start.

“Oh, I think they'll be up and running,” she said. “There will be some hiccups along the way. That's putting it mildly, especially if you look at how the Medicare prescription drug program rolled out in the Bush administration and this is much more complicated.”

Praeger was instrumental in securing Kansas a $31.5 million grant intended to help the state build its own exchange, but the funding was subsequently rejected in 2011 by Gov. Sam Brownback.

The following year, Praeger tried to pursue another grant that would have allowed the state to develop an exchange in partnership with federal authorities. But Brownback shot that down, too, apparently confidant that the U.S. Supreme Court would find the health reform law unconstitutional. Kansas was among the states that unsuccessfully challenged the law.

But the high court upheld most of the Affordable Care Act’s key provisions, including the exchange and the mandate that persons who can afford health insurance must buy it or pay a tax penalty.

Sheppard said the insurance department still had some funding remaining from an earlier federal grant that would allow the agency to do some limited “outreach and education” to the public about the Affordable Care Act, which is commonly referred to as Obamacare.

Praeger said the department had purchased the domain name for a new website it plans to launch soon that will offer information about the Affordable Care Act and the exchange.

She and Sheppard said they have been speaking to various groups about the law and its requirements.

“We're very busy,” Sheppard said. “Right now our biggest number of questions is coming from employers. It’s very frustrating because there is still a lot of confusion as relates to employer responsibility. That’s something we're still trying to get some information and clarification on (from federal officials). Employers are getting very anxious now.”

'The IRS and basic English'

The main questions employers have, she said, deal with how to count employees, particularly part-time ones, to determine whether their firms meet the law’s definitions of a small employer.

“It’s confusing because these regulations that relate to employer responsibility were issued by the Internal Revenue Service,” Sheppard said, “and I think that's all I need to say about that. They need to learn basic English and learn to communicate.”

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Linda Sheppard

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Sheppard said the IRS rules dealing with employer responsibility were not “clear cut” and could apply uniquely to each employer. She and Praeger said for that reason they were encouraging employers with questions about the regulations to contact an attorney or accountant.

“We are not in a position to counsel each employer,” Sheppard said, “so we are encouraging them to reach out to a tax attorney or CPA or whatever. But the truth is, there are a lot of these employers that say ‘I can't afford to go out and hire someone for $200 an hour.' It’s frustrating for them and us, but we really are not in a position to tell you the right answer for your particular situation. We don't have the time or people resources and those are questions that have potential liability if the answer is not the right answer.”

'Heartburn'

Praeger said her “heartburn in this,” was the fact that Kansans soon will be hearing more and more about the exchange and many with low-incomes will assume they qualify for coverage through it. But because Kansas policymakers chose against expanding the state’s Medicaid eligibility, tens of thousands of people who otherwise might have received benefits won’t.

In Kansas, the exchange will be open to people who don't already receive affordable coverage through an employer.

But people below the federal poverty level will not qualify for the subsidies available for those earning between 100 percent and 400 percent of the poverty guidelines. The law was written with the assumption that most people below the poverty line would be included in Medicaid, but the U.S. Supreme Court ruled that states could not be compelled to broaden their Medicaid programs and Kansas is among the states where policymakers have chosen not to open up the program. Kansas has one of the most restrictive Medicaid programs in the nation.

“The irony is we're going to have people who are too poor to get the assistance because it is not available,” Praeger said. “It was anticipated (when the law was passed) that everyone would do the Medicaid expansion. That's going to be tough. How do you explain that to people? They’ll probably be the most anxious to get it and probably be the most in need and they'll still get sick and just have to go to the emergency room.”



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Comments

k99js06 (Jennifer Sullivan)June 19, 2013 at 4:11 p.m.

The exchange will actually be open to anyone who is a citizen/legally present and is not incarcerated. Financial assistance to help with premiums ("premium tax credits") will be available to people who meet the above requirements and: (1) don't have an affordable/adequate offer of employer-based coverage, (2) have income between 100 (not 138) and 400 percent of the federal poverty level, and (3) are not eligible for Medicaid. Since Kansas is not expanding Medicaid, those with income between 100 and 400 percent of the federal poverty level will be eligible for premium tax credits. If the state were expanding Medicaid, Medicaid would be available for those with incomes up to 138 percent of the federal poverty level, and premium tax credits to purchase exchange coverage would be available between 139-400 percent of the federal poverty level.