KHI News Service

Health insurance exchange hinges on legislative support

But lawmaker says that is lacking

By Dave Ranney | June 22, 2011

The federal health reform law requires that all 50 states have a health insurance exchange plan in place by Jan. 1, 2013 and an operational exchange by Jan. 1, 2014.

Kansas may not make the deadlines.

“We will know, obviously, by the end of the next legislative session whether it’s feasible for us to continue working on this,” Kansas Insurance Commissioner Sandy Praeger said, referring to her department’s ongoing effort to design a Kansas exchange.

If the Affordable Care Act is not struck down as unconstitutional, states that don’t meet the deadlines will have a federally designed system imposed upon them.

Audio clip

Praeger on exchange legislation

Forward motion

“We need to keep moving forward,” Praeger said.

Preager met Wednesday with more than 20 members of a steering committee charged with assembling the basic framework for a Kansas-specific exchange and a plan to present to the Kansas Legislature.

Several members of the committee said it had become clear that before an exchange could be put in place, several Kansas laws would need to be modified. Those changes would require approval from both the Legislature, which has Republican majorities in both chambers, and Gov. Sam Brownback, who also is Republican.

Brownback opposed the Affordable Care Act while in the U.S. Senate and also while campaigning for governor last year. Many state legislators also campaigned against the law.

Nonetheless, legislative “buy-in” for a Kansas-specific exchange has become imperative, Praeger said, and she sees no other option than to seek approval of the enabling legislation in the coming legislative session.

“If we can’t make the case to the Legislature next year, then we’ll have to decide that maybe Kansas isn’t going to have its own exchange,” she said.

Unhappy with "Obamacare"

But Rep. Brenda Landwehr, a Wichita Republican who has been among the federal law's most outspoken critics in the Legislature, said there's little reason to hope she and fellow legislators will buy-in.

“The political reality is that there are a lot of people in the Legislature who aren’t happy with Obamacare, who don’t understand why this (exchange) is being put together by a steering committee instead of a legislative committee, and why we can’t wait until after the election in 2012,” Landwehr said in a telephone interview with KHI News Service.

“I don’t know how anything will get passed next year because I’m telling you, the temperature on this has not changed since the elections last November,” she said. “Not one bit.”

Last month, Landwehr, a conservative Republican who heads the House Health and Human Services Committee, agreed to chair a steering committee working group tasked with figuring out how Medicaid could be blended with private insurance in an exchange. Currently, she is the only legislator on the exchange steering committee.

Moving targets

Landwehr said concerns over the Jan. 1, 2013, deadline may be exaggerated.

“Some of those deadlines appear to be moving targets,” she said. “I think that as we get into this, the federal government is going see that this (opposition) is a much bigger deal than they thought it was going to be.”

The situation is complicated by Kansas being one of 10 states to receive an “early innovator” grant from the fedearl government aimed at developing exchange models for replication in other states.

If the development of an exchange stalls in the Legislature, Praeger said, the federal government will likely cut off whatever might remain of its $31 million grant.

“As part of the review process, at some point we’re going to be asked: ‘You got this money, how are you spending it?” she said.

Other items raised by steering committee members:

• Matt All, chief counsel for Blue Cross Blue Shield of Kansas, said the company intends to include a low-cost “bronze plan” in its exchange menu despite the expectation that insurers will have to offer only so-called “silver” and “gold” plans.

Bronze plans are expected to appeal to young, healthy adults willing to trade less coverage for lower premiums.

• Members approved a call for making sure that local insurance agents and brokers have a role in helping the public understand the exchange.

• Several members said their subcommittees’ planning efforts have been delayed due to delays in the issuance of federal regulations to guide them.

Preager said she’d been told to expect the regulations “sometime around the Fourth of July.”

She later joked: “Let’s hope that means before the end of the year.”