June 28, 2012

State leaders ponder how to proceed under health care act

Kansas leaders have started wrestling with what the state should do now that the U.S. Supreme Court has upheld nearly all of the federal Affordable Care Act.

Kansas leaders have started wrestling with what the state should do now that the U.S. Supreme Court has upheld nearly all of the federal Affordable Care Act.

Among the major issues: Whether to proceed with setting up an online health insurance marketplace or exchange as required by the act, and how to respond to a part of the ruling that allows states to opt out of Medicaid expansion.

Gov. Sam Brownback said he wants to wait until after the general election in November to do anything about setting up an online exchange. The act requires each state to have one in 2014.

“Stopping ObamaCare is now in the hands of the American people,” Brownback said in a written statement released soon after Thursday’s court ruling. “It begins with electing a new president this fall.”

He predicted that if Mitt Romney unseats President Obama, who championed the law, states may no longer face a requirement to set up exchanges to help consumers buy health insurance.

And U.S. Rep. Mike Pompeo, R-Wichita, said he and others would work to repeal the law in Congress so that states wouldn’t have to follow it.

But Kansas Insurance Commissioner Sandy Praeger said the state needs to move ahead now to have some control over the exchange.

States must submit their plans for an exchange by Nov. 16 to the U.S. Department of Health and Human Services. Kansas has not started to set one up because of opposition to the law by Brownback and fellow Republicans who dominate the Legislature.

Last year, Brownback returned a $31.5 million federal grant intended to assist the state with the computer infrastructure for a state-based exchange. Praeger said legislative opposition probably would have kept work on an exchange from moving forward even he hadn’t returned the money.

But Praeger said the state needs to move forward now “with the goal of doing as much as we can here in Kansas to keep the control local and to keep the implementation local as much as we can.”

Kansas no longer has the option to set up a state-based exchange, she said, but it still has a chance to get into an exchange partnership with Health and Human Services if it can get its plans filed earlier than Nov. 16 so it can apply for additional federal funds.

If the state runs out of time, HHS would run the exchange, although it would work closely with the state, and the state still would license the insurance companies that HHS would deem eligible to join the exchange, Praeger said.

Praeger said that although Kansas and other states might believe the federal health care law would go away if Romney is elected, the court’s ruling means the state has an obligation to act, she said.

“It’s been the law of the land since 2010,” Praeger said. “What’s the harm in preparing for the eventuality that things won’t change?”

Kansas House Insurance Committee Chairman Clark Shultz, a Lindsborg Republican, said state officials ought to at least discuss what options Kansas has should an exchange be required.

“It seems that we should at least have something in mind on how we go forward if we need to,” Shultz said.

Kansas House Minority Leader Paul Davis, a Lawrence Democrat, predicted that even if Romney is elected, he’ll have to consider creating exchanges as part of any plan for reforming the health care system.

“He is going to have to deal with the rising cost of health care and the limited options that consumers have in the marketplace,” Davis said.

Praeger said the Supreme Court ruling “is the first step in creating a health care system in this country that works for all of our citizens.”

The next step is to find ways to bring costs under control and get everybody covered, she said.

Figures for Kansas

Kansas has about 350,000 residents who don’t have health insurance coverage, or 12.7 percent of the state’s population, according to U.S. Census Bureau figures. About 53,000 are children.

More than half of all Kansans — 53.5 percent — are covered by employment-based health insurance, while more than a quarter — 28.1 percent — are covered by a public health insurance plan such as Medicaid, Medicare or the Children’s Health Insurance Program, according to the Kansas Health Institute’s 2011 Annual Insurance Update released in March.

Portions of the Affordable Care Act have been in place in Kansas since it was passed. A recent National Health Interview Survey indicated that about 25,000 young adults in the state aged 19-25 have gained health insurance through the act, which allows them to remain on their parents’ insurance plans.

The provision of the act requiring government and pharmaceutical companies to close the coverage gap for Medicare Part D prescription drug coverage beneficiaries — known as the “doughnut hole” — also has had an impact in the state.

According to the Kansas Health Institute, 42,000 Kansans received a $250 rebate check in 2010, and last year, 41,000 Kansans received the 50 percent discount on brand-name drugs. So far in 2012, about 3,600 Kansans have received discounts on drugs because of the act.

Overall, Affordable Care Act funding to Kansas government and private entities is about $88 million so far.

But Pompeo said the law has been making things worse for Americans by driving up health care costs and making it harder for small businesses to hire workers.

“I am disappointed that the Court did not side with the majority of Americans who are concerned with this law,” he said in a written statement. “However, since the Court didn’t reject the law, Republicans in Congress must now vote to repeal ObamaCare in its entirety and to enact common sense, step-by-step reforms that protect Americans’ access to the care they need, from the doctor they choose, at a lower cost.”

Rep. Tim Huelskamp, R-Fowler, called Thursday “a definitive date in the advance toward government tyranny.”

“Today, a slim majority of the Supreme Court turned our Constitution on its head, and ruled that the federal government, in effect, can force upon the American people anything it damn well pleases – as long as it is called a tax,” Huelskamp said in a written statement.

But state Rep. Jim Ward, D-Wichita, applauded the ruling.

“I’m excited to know insurance companies will no longer be able to discriminate against you because you’ve been sick in the past, or discriminate against women, and it’s a good idea to eliminate arbitrary caps on necessary benefits,” he said. “I think these are all good steps. Now, we as a state have to decide how to move forward with uninsured and under-insured people. Ideological and political statements don’t help cover anyone.”

Medicaid funds

Kansas Attorney General Derek Schmidt, who added Kansas to the list of states that challenged the law, said the court’s majority declared the act to be “nothing more than an old-fashioned tax-and-spend program.”

But he also noted that the court rejected the federal government’s effort “to transform the Medicaid program from a federal-state partnership into a centralized program run by Washington, from Washington and solely for Washington.”

The court’s ruling said the act could not force states to expand Medicaid, the health care program for the poor, by threatening to withhold their federal Medicaid funds. That gives states the ability to bail out of Medicaid expansion.

Expanded Medicaid coverage is considered essential in providing health care for millions of Americans who lack insurance now. The proposed expansion in the law would make it easier for lower- and middle-class families to qualify for Medicaid, and improves the benefits from it.

But states, which share the cost of Medicaid with the federal government, have resisted, claiming the expansion eventually would cost them billions of dollars.

Of the 380,000 uninsured Kansans, at least 140,000 will be directly affected if the state does not participate in Medicaid expansion, Ward said. Income taxes and no-insurance taxes will go into the pot to pay for Medicaid expansion, so if Kansas opts out of it, “What that says is we’ll be paying for other states, states that don’t opt out,” Ward said.

Contributing: Associated Press, Kansas City Star

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