KHI News Service

“Kick-off” for a Kansas health insurance exchange

About 125 people attended the insurance commissioner's launch meeting

By Mike Shields | January 27, 2011

Insurance Commissioner Sandy Praeger spoke to a gathering of about 125 people today, the kick-off event for developing a plan for a Kansas health insurance exchange, which needs to be operational by Jan. 1, 2014 to meet the demands of federal health reform.

Praeger asked the various officials and industry representatives in the room to sign up for one or several of eight work groups with the goal of having a plan crafted by midsummer.

"I think this is an exciting time, an exiting project," Praeger said. "It's a wonderful opportunity and if we get moving on this, I don't think we'll have any trouble meeting the deadlines."

Reform linchpin

State or regional health insurance exchanges are a linchpin of the federal reform law enacted last year and will provide the infrastructure for enrolling millions more Americans in private and government health plans.

At least 500,000 Kansans are expected to eventually get their insurance through an exchange and likely many more than that.

The exchanges will handle the expanded Medicaid population and also people currently insured through individual or small-group private plans. It also will be the purchasing venue for people who qualify for the new federal subsidies (tax credits) to buy private coverage.

The credits will be available -on a sliding scale pegged to income- for Kansans whose annual earnings are 400 percent or less of federal poverty guidelines. More than half of Kansans earn less than 400 percent of poverty, which is about $88,000 a year for a family of four.

The federal government will operate exchanges in states that choose not to run their own.

Better Kansas than the feds

So, despite opposition to the health reform law from Gov. Sam Brownback and most Republicans in the Kansas Legislature, Praeger predicted there would be little appetite among them for letting the federal government define and operate a Kansas exchange.

State Rep. Jim Denning was among those who had questions at the exchange meeting. Behind him waiting for a turn at the microphone is mental health advocate Rick Cagan.

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The federal health reform law was approved in March 2010, and California within months passed its exchange legislation, becoming the first state to respond. It is in the process of naming members to its fledgling exchange's governing board and hiring staff to run it.

Massachusetts and Utah had exchanges predating the Affordable Care Act.

Utah's is very basic, essentially a Web portal linking consumers with insurance company Websites. It won't meet the new law's requirements and plans are underway there to revamp it.

Massachussett's exchange or connector is well developed as a result of state health reforms enacted there in 2006.

Innovator grant

Praeger said Kansas is in the running for a federal "innovator" grant and with it could become a front-runner state in developing its exchange and perhaps become a model for others. She said the grant request was for $21 million to $28 million.

There will be eight work groups involved with developing the state's exchange plan. Praeger announced the groups' chairmen and asked audience members to sign up for membership. She also said the effort would be guided by a steering committee of up to 40 people.

The work groups and their chairmen are:

  • Focus and Business Operations Issues - Matt All, chief counsel for Blue Cross Blue Shield of Kansas.
  • Governance/Legal/Legislative - Jeff Ellis, an attorney with the Kansas City law firm Spencer Fane. Ellis also led the legal work group for the recently formed Kansas Health Information Exchange, Inc.
  • Background Research - The Kansas Health Institute.
  • Consumer Outreach/Education/Information - former Attorney General Bob Stephan.
  • Insurance Market Issues - Marlee Carpenter, executive director of the Kansas Association of Health Plans.
  • Funding/Financial - Doug Farmer, a vice president at the Sunflower Foundation and former director of the State Employee's Health Benefit Plan.
  • Agents/Brokers/Navigators - Leroy Brungardt, a former top regulator at the Insurance Department.
  • Medicaid Integration and Interagency Communications - Andy Allison, executive director of the Kansas Health Policy Authority.

The Affordable Care Act requires that the secretary of the U.S. Department of Health and Human Services certify by Jan. 1, 2013, if a state will be able to operate a qualified exchange or must default to federal management.

Praeger said the governor and Legislature will need to approve the state's exchange plan and/or approve any needed changes in state law to make it happen. She said her intention was to present the plan to the 2012 Legislature, though if the work groups determine there is something that cannot wait until then it would be possible to present the information to the current Legislature before it adjourns for the year this spring.