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Kentucky continues planning for state health benefit exchange

If upheld, governor will create exchange by executive order

FRANKFORT, Ky. (May 3, 2012)—Gov. Steve Beshear today outlined the state’s ongoing efforts to prepare for the possible implementation of key provisions of the federal Affordable Care Act (ACA).

The case regarding the validity of the ACA remains pending before the United States Supreme Court, and a decision is anticipated in late June. If upheld, the state has only through the end of this year to demonstrate its readiness to run a health insurance exchange, or the responsibility will default to the federal government. Several interest groups representing employers, health care advocates and citizens, including the Kentucky Hospital Association, the Kentucky Chamber of Commerce, Kentucky Voices for Health and Anthem Blue Cross Blue Shield, have said the state should not allow the federal government to operate the exchange for Kentucky.

If the law is upheld by the Supreme Court, Beshear today said he will issue an executive order to establish a Kentucky health benefit exchange.

“While no one can predict what the Supreme Court will ultimately decide, it is imperative that the state prepare for any decision,” he said. “The steps we have taken to date, and the planning process we are putting in place helps ensure the state is able and ready to follow the law, if upheld, and also guarantees we don’t have the federal government running our insurance market.”

The health benefit exchange, a requirement of the ACA, will facilitate the purchase and sale of health plans in the individual market, assist small employers in facilitating the enrollment of their employees in health plans, provide one-stop shopping by helping individuals enroll in health plans, Medicaid and KCHIP, enable individuals to receive premium tax credits and premium subsidies, and qualify small businesses for tax credits.

Officials from CHFS and the Kentucky Department of Insurance will meet with insurers, providers, agents, consumers, employers and advocates in the coming weeks to solicit input on the development of a Kentucky exchange.

“The commonwealth believes it is best positioned to operate an exchange for the full benefit of Kentuckians,” said CHFS Secretary Audrey Tayse Haynes. “Kentucky understands the unique regional and economic needs of our citizens, as well as the health insurance needs of small businesses. We have existing working relationships with insurers, agents, advocates, health care providers and other business partners. By establishing a state-operated exchange, we can also better ensure coordination and integration of eligibility determinations and enrollment with the Medicaid program.”

In February, Kentucky received a $57.8 million grant from the U.S. Department of Health and Human Services (HHS) to continue planning for and implementation of programs and systems required by ACA. These efforts include building an end-to-end eligibility and enrollment system to serve both Medicaid and exchange participants.

The grant funds, along with a $50 million project in the recently enacted budget (HB 265), provide funding toward meeting the Medicaid eligibility requirements under the ACA. The most significant functionality requirements for health insurance affordability programs involve the Medicaid Program and relate to the expansion of eligible people and the associated simplified eligibility rules. Other requirements include easy, online access, real-time eligibility determinations and enrollment for most Medicaid or KCHIP applicants, and the necessary interfaces with the Health Benefit Exchange. The grant will fund a significant portion of the state’s requirements with 100 percent federal funds, with the remainder of the requirements funded at a 90/10, federal-state matching rate.

Kentucky previously received two federal health insurance exchange planning grants totaling $8.6 million. These grants provided the necessary resources to conduct the research and planning needed to build a better health insurance marketplace and determine how exchanges would be operated.