The Obama administration official charged with getting new online insurance marketplaces up and running in all 50 states said today that the federal government will be ready to flip the on switch in the states where it will operate them.
Those states include Kansas and Missouri, where Republican officials opposed to the federal health reform law blocked efforts to establish state-run marketplaces.
Marilyn Tavenner, who heads the Center for Medicaid and Medicaid Services in the U.S. Department of Health and Human Services, said critical information technology systems necessary to match consumers to coverage plans and identify those eligible for federal subsidies have been tested and are ready to go.
“We have 34 states that are in the federal exchange and we will be ready Oct. 1,” Tavenner said during a visit here.
'Very reasonable rates'
All states have submitted lists of the insurance companies that will offer plans in their marketplaces and the premiums they intend to charge for coverage, Tavenner said. The pricing information is currently being reviewed by CMS and will be made public in September on an agency website designed to help consumers understand the health reform law.
Tavenner met privately at the Guadalupe Center with a small group of social service providers and business representatives. Her Kansas City stop was part of a nationwide tour to educate people about the health reform law, which Tavenner acknowledged remains unpopular with a majority of Americans.
Like many advocates of the reform law, she said she believed that public opinion would turn in its favor after people learn more about it and benefit from its provisions.
“This is not something that happens Oct. 1; that everyone changes their mind,” she said. “It’s probably something that takes two or three years.”
Critics of the law, including both U.S. senators from Kansas, Republicans Jerry Moran and Pat Roberts, say even if the marketplaces open on schedule, consumers will be shocked when they see the premium increases necessary to cover the cost of insurance industry reforms.
Earlier this week, the Heritage Foundation, a conservative think tank, estimated that premiums for individual policies sold in Kansas would go up 61 percent. The analysis, which the foundation said was based on projections compiled by congressional committees, also predicted premium increases between 61 percent and 106 percent in Missouri.
“These predictions of gloom and doom, it’s not what we’re seeing. What we’re seeing are very reasonable rates.” - CMS Director Marilyn Tavenner
“Obamacare’s most onerous insurance regulations will directly cause insurance premiums to skyrocket, particularly in the individual and small-group markets,” Alvene Senger wrote in a foundation blog posting.
The reform law is forcing insurance companies to abandon some tactics they have long used to control risk. For example, the law prohibits insurers from imposing annual or lifetime benefit caps. It also requires them to offer coverage to all, even those that previously might have been excluded due to pre-existing health conditions.
Tavenner called the Heritage projections “total speculation,” noting that premiums have gone down in some states that are running their own marketplaces and have already published rate information.
“These predictions of gloom and doom, it’s not what we’re seeing,” she said. “What we’re seeing are very reasonable rates.”
Tavenner said she didn’t expect significant rate increases across the board but acknowledged that individuals in some specific consumer groups likely would pay more. Healthy young adults, for example, could see increased premium costs because the law was written to help protect older, sicker adults from big increases.
Andy Corbin, chief executive of Blue Cross Blue Shield of Kansas, the state’s largest private insurer, has said the plans his company will offer in the new marketplace will vary greatly in cost. But he said in general they “will probably be more expensive” than the individual and small-group policies the company now sells in the open market. But he said in many cases the amounts consumers actually pay would be lower because of federal tax credits available to thousands of people expected to use the exchange or marketplace.
The credits, available only through the exchange, will be calculated on a sliding scale. The subsidies will be available to those with annual earnings between 100 percent and 400 percent of the federal poverty level. For individuals, that means earnings between about $11,000 and about $46,000. For a family of four, that would mean those with annual household incomes between about $22,000 on the low end and $92,000 on the high end.
According to estimates by researchers at the Kansas Health Institute, the parent organization of KHI News Service, there are about 149,000 currently uninsured Kansans who could get coverage and credits through the exchange and another 44,000 who currently have individual policies. That’s a total of about 193,000 Kansans.
Families USA, a pro-reform lobbying organization based in Washington, D.C., have estimated that even more Kansans will be eligible for premium tax credits. Its estimate is 250,000 people.
Issue Brief: Insurance Exchange Will Provide Many Kansas Consumers With New Options
KHI researchers have estimated that -all told - as many as 500,000 Kansans could get coverage in the new marketplace.
CMS officials said the exchanges would be paid for by fees assessed against the companies that offer coverage through them.
Kansas roles, nonetheless
And though Kansas Gov. Sam Brownback chose against state participation in the operation of the marketplace, Kansas officials will be allowed some input, CMS officials said.
“Kansas let us know that they would like to play a more active role in the plan management area of the Marketplace, and we were happy to work with them to provide that flexibility,” said Julie Brookhart, a regional spokesperson for the agency.
Also, Kansas officials have said they will be on schedule for Oct. 1 with a new, digital Medicaid eligibility and enrollment system that is required to be interconnected with the federal exchange hub. The federal government mostly paid for the state’s new system.
Brookhart confirmed that Kansas was on schedule with that element of the exchange.
“The Kansas Eligibility and Enforcement System (KEES) is on schedule to be functional, to include the ability to be utilized as an interface with the Federal Data Services Hub,” she said in an email to KHI News Service.
She said officials at the Kansas Department of Health and Environment, the state’s lead Medicaid agency, were working “closely with CMS to ensure that their system design, implementation and operation meets federal guidelines, but, most importantly, works towards the long-term vision of integrated, high quality and cost effective health and human services provided by the state of Kansas to its residents.”
CORRECTION: An earlier version of this story incorrectly state that tax credits would be available to those earning between 138 percent and 400 percent of federal poverty guidelines. Because Kansas has chosen not to expand its Medicaid eligiblity, the actual range is between 100 percent and 400 percent.
(Staff writer Mike Shields contributed to this report.)
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