KHI News Service

Work starts on defining Kansas ‘essential benefits’

Basic health coverage requirements for the pending insurance exchange soon to be determined

By Dave Ranney | August 15, 2012

The Kansas Insurance Department has scheduled a public hearing to collect input on what basic benefits should be included in the health insurance plans that will be available through the state’s new online insurance exchange after Jan. 1, 2014.

“A number of our stakeholders have a great deal of interest in what the basic plan might look like, what the benefits would be and what the costs might be,” said Linda Sheppard, director of the department's division of accident and health insurance. “This hearing is meant to give everybody the opportunity to either submit written testimony or sign up to speak.”

The three-hour hearing is scheduled to begin at 9 a.m. Sept. 5 in Shawnee Room A at the Maner Conference Center, which is next to the Capitol Plaza Hotel, 1717 SW Topeka Blvd.

Actuarial analysis

Department officials said they would distribute an actuarial firm’s analysis of what might have to be added to existing plans to meet the “essential health benefits” requirement in the federal Affordable Care Act and what the added benefits might cost.

The analysis by Milliman, a national consulting firm, is not yet available but will be posted on the department’s website prior to the hearing, officials said.

Sheppard said the department would send email notices to more than 460 people who have participated in earlier hearings, letting them know about the meeting and the analysis.

After the hearing, Sheppard’s boss, Kansas Insurance Commissioner Sandy Praeger, will prepare a proposal for Gov. Sam Brownback, who will have final say on the essential health benefits that the state will submit for federal review.

Praeger’s recommendation is due to the governor on or before Sept. 24.

Under the Affordable Care Act, states are allowed to define the essential health benefits that insurance companies will be required to include in their exchanges’ individual and small-group plans.

Brownback, a Republican and an outspoken opponent of the Affordable Care Act, has said his administration would do nothing to implement the law until the outcome of the November general elections is known.

GOP presidential candidate Mitt Romney has pledged to see the law repealed as one of his first official acts should he be elected.

Governor has until Nov. 16

If there is to be a “partnership exchange” that would include policy-setting roles for both the state and federal governments, Sheppard said, the governor has until Nov. 16 to submit a “blueprint” to U.S. Department of Health and Human Services Secretary Kathleen Sebelius.

Otherwise, Sheppard said, the Kansas insurance exchange will be run by the federal government, assuming the health reform law stays on the books.

Sebelius, a Democrat, is a former governor of Kansas.

Under the Affordable Care Act, a state’s so-called “benchmark plan” is required to include at least 10 basic benefits:

• Ambulatory patient services.

• Emergency services.

• Hospitalization.

• Maternity and newborn care.

• Mental health and substance abuse treatment.

• Prescription drugs.

• Laboratory services.

• Preventive and wellness services and chronic disease management.

• Habilitative and rehabilitative services and devices.

• Pediatric services, including oral and vision care.

Most of these benefits, Sheppard said, already are in many of the individual and small-group plans sold in Kansas.

But, she said, there may be some coverage shortfalls in the areas of mental health, pediatric dental care and habilitative services.

“We’re not sure what all is included in ‘habilitative services,’” Sheppard said. “That’s one of the things we’re looking for clarification on.”

Cost concerns

Scott Day, a spokesman for the Kansas Association of Health Underwriters, said habilitative services could be construed to include non-medical day services for an autistic child that typically are not covered now.

“I’m not here to judge who’s in and who’s out,” Day said. “Our concern is the cost. How is it that we’re going to make this affordable, if it’s going to cover everything that every group that’s out there lobbying has a passion about?

“We think this could double or triple premiums,” he said. “We think we should be able to sell a male an individual policy that doesn’t cover maternity, but this says we have to (include it). We’d like to be able to have a non-diabetic plan for people who aren’t diabetic, but the ACA says we can’t do that. Forcing everybody to cover everything is just going to drive the price up.”

Sheldon Weisgrau, director of the Topeka-based Health Reform Resource Project, said the ACA’s essential-benefits requirement was designed to prevent insurance companies from selling low-premium policies that provide minimal or inconsequential coverage.

'Apples to apples'

“The idea is for there to be a standard benefit package that will have to be in every plan so that consumers, when they log onto the exchange, will be able to compare apples to apples,” Weisgrau said.

Soon, he said, Praeger and, ultimately, Brownback will address the challenge of coming up with a system that balances affordability with adequate coverage.

“That’s where the rubber hits the road,” Weisgrau said, noting that each plan in the exchange will have four “metallic levels” — bronze, silver, gold and platinum — designed to let consumers strike a similar balance between how much they’re willing to pay and how much risk they’re willing to take on.

States, he said, are not required to design an essential benefits package from scratch. Instead, they’re free to go with one of the three largest small group plans, one of the three largest state employee health plans, one of the three largest plans for federal employees or the largest non-Medicaid HMO plan operating in the state.

“Realistically,” Weisgrau said, “if there’s a default plan, it would be to go with the largest plan in the small-business market, which in Kansas is Blue Cross Blue Shield.”

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