Kansas Starts Developing Insurance Exchange
KANSAS CITY, Mo. – The Kansas Department of Insurance is holding its first public meeting today to start developing a state health insurance exchange. Under the federal health law, state exchanges are designed as places where people can shop for government-certified health insurance. The programs are scheduled to begin in 2014, but Kansas Insurance Commissioner Sandy Praeger says how exactly these exchanges will work - and their success - depends a lot on what states do to prepare for them right now. She recently spoke with KCUR's Elana Gordon about what's at stake in today's meeting and in the coming months.
PRAEGER: We have a lot of work to do to have that exchange ready to start taking enrollees in January of 2014. There are numerous decision points that have to be made about how it's going to be governed - do we have a market where companies can sell inside the exchange and outside the exchange? Some of these are going to be legislative decisions and others will be made through this work group process that we're establishing.
But we have to certify by January of 2013 that we'll be ready on January of 2014. So the Secretary has to certify that we've done all the background work, that we've figured out the technology for how to merge information on Medicaid, the new subsidized health plans, along with the private insurance market - because all of those have to be made available on this exchange. So there are just a lot of decision points.
GORDON: How will the development of an exchange affect health insurance in the state?
PRAEGER: It will give people a greater ability to make side-by-side comparisons about health plans. The exchange is the only place that people will be able to, that are qualified, buy insurance and receive a subsidy to help them with their premium. So, getting the technology developed that helps supplies the subsidy and transfers the payment to the plan, it's just from an IT standpoint incredibly complex.
GORDON:There's been a mix of where states are at right now - some places like California have been charging ahead with the exchange, others are in limbo. Where is Kansas at?
PRAEGER: I guess I think we're ahead of many states. For one reason, Kansas received a Health and Human Services grant. It's a grant to completely redo our eligibility system for Medicaid. The state received the grant and is in the process of contracting for services to develop the new system. We've also applied for an early innovator grant to be a pilot project state [for an exchange]. I had a conference call with HHS on our submitted budget, which I took as a good sign. I think what makes Kansas attractive [for the grant] is we will already be in the process of retooling Medicaid eligibility. That will put us ahead of many states that are having to deal with it. If we get an early innovator grant, we can develop those enrollment options alongside enrollment for the Medicaid program. That would put us ahead from a technology standpoint.
GORDON: Congress right now has been debating a repeal of the federal health law - how does all this all affect the implementation process?
PRAEGER: Well, we just keep saying it's easier to pull the plug than it is to jump start. And this is the law as it is currently written. And we're really under a fairly aggressive timeline even though it seems like it's several years away. I don't want to get left in the dust because we were waiting to see what happens in terms of a potential repeal or not wanting to participate. Our state legislature directed us in December to apply for the early innovator grant because they know it's better for Kansas to run an exchange then to have federal level run it. So I'm just moving forward with that early support, trying to be as responsive as I can be.
GORDON: What kind of roadblocks do you anticipate?
PRAEGER: There are some decision points, there could be questions raised about how we set up the exchange, whether we allow for markets inside the exchange and outside the exchange. I don't necessarily view them as roadblocks, but there may be some healthy debate about some of those decision points - whether we have it as a standalone state agency, within an existing state agency, whether we have the exchange as a private non-profit. So there are decision points if we can't get to an agreement on in a timely fashion, could present problems in terms of being able to meet the timelines.
GORDON: Who makes those decisions?
PRAEGER: Most of the really critical decisions will have to be made by the legislature and the governor. The decidions about whether it's a private nonprofit or a quasi-public or in an existing state agency - that's definitely a legislative decision. There are other decisions about whether we want to define small group as two to fifty as we currently do, or the law says can expand that small group definition up to a hundred. And that would be a legislative decision, too, because that's in our statue. So wherever there's any expressed authority needed, we'll have to go to the legislature to get it.
GORDON: And what does that timeline look like for when you need certain legislative authority?
PRAEGER: We don't believe we need to go to the legislature this year. The whole idea behind creating these work groups and inviting anyone who has an interest to serve on one of these work groups - and one of them will be the governance question - the goal there is to get as much input as we can, get all the interested parties around the table having the discussion, building a good case for making a decision one way versus another, so when we go to the legislature we've already built support for what we think works best for Kansas based on the input from consumers, small businesses, and the insurance companies and the insurance agents. So, we think if we do our work well this year, we can then go to the legislature next year and get the critical decisions passed.
GORDON: What happens if the state chooses not to support developing the exchanges?
PRAEGER: Then the fallback position is the federal government through HHS would hire most probably a nonprofit entity to run the exchange for Kansas. I know we have legislators that don't like the Affordable Care Act and would like to repeal certain provisions of it - most particularly the individual mandate. But if the law is not repealed, then these fallback positions are the federal government taking over an awful lot of the regulation of insurance in Kansas. And I just don't think our legislators want that to happen either. So I guess we're sort of on a dual track here. We're going to have some that are still going to be working for repeal, but at the same time they know that if it isn't repealed, they still want to have Kansas retain control.
GORDON: Commissioner Praeger, thanks for speaking with me.
PRAEGER: You're welcome Elana, it's always a pleasure.
Funding for health care coverage on KCUR has been provided by the Health Care Foundation of Greater Kansas City.
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