Kansans will have limited control over developing a health-insurance exchange before the Nov. 16 deadline, the state’s insurance commissioner says.
On June 25, the U.S. Supreme Court upheld the Patient Protection and Affordable Care Act, giving states such as Kansas little time to organize a state-run plan, said Insurance Commissioner Sandy Praeger, the state’s chief regulator of the companies selling the health insurance policies consumers will be required to buy.
“That opportunity is lost,” Praeger said.
The federal government will determine how Kansas consumers buy health insurance – required under the Affordable Care Act, either through a partnership with Kansas, or done wholly in Washington, D.C., she said.
Praeger, a Republican, started planning in 2010 for just such a state-run exchange, using a $32 million federal early innovator grant. The federal Department of Health and Human Services offered the grants to Kansas and other states to help develop model electronic market places, allowing consumers to shop and compare health insurance online.
But the Kansas GOP made the 2010 elections largely a referendum on President Obama and conservative frustration over his health plan and other policies. Republicans scored their biggest wins in 46 years in those elections, and their hostility toward the health-care law led Kansas Gov. Sam Brownback – a Republican and Obamacare opponent – to return the money.
The state instead ordered a far more costly, $135 million system designed to screen applicants for social services programs, but which might also be useful for an insurance exchange. Kansas, like all states, faces the Nov. 16 deadline for submitting its exchange plans to regulators at the U.S. Health and Human Services. If that doesn’t happen, federal officials could prescribe a plan of their own.
Thursday’s Supreme Court ruling could prove costly for Kansans in other ways.
No one yet knows how much it will cost Kansas’ 350,000 uninsured residents to buy coverage, which will be required beginning in 2014. Those costs aren’t yet calculated.
But if the premium costs are anywhere near the almost $2,200 a year for individuals as reported in a national survey by eHealthInsurance.com – a Mountain View, Calif. online broker – the total tab would be almost $769 million a year.
That’s equal to more than a fourth of the $3 billion in personal and business income taxes Kansans paid in 2011.
The potential total bill for Kansas taxpayers tops those premium costs many times over, according to a study completed last year by the Kansas Policy Institute, a Wichita think tank that advocates free market solutions for public policy questions.
The study, by former Federal Reserve Bank of Cleveland economist Jagadeesh Gokhale, concluded that the Affordable Care Act would require $4.7 billion additional general fund spending for Medicaid, the state’s largest health plan, between 2014 and 2023, the first 10 years universal coverage would be required.
That total could change. Legal experts were still parsing the Supreme Court’s ruling late this past week.
Until then, “Medicaid spending accounts for 18 percent of state revenues, but under the ACA will hit 31 percent in just 10 years,” said Dave Trabert, the Institute’s president. “That doesn’t allow much room for spending on other state priorities such as education.”
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