State starts planning insurance exchanges, part of health care law

Kansas is taking steps to prepare for the new federal health care act, even as some of its elected leaders vow to fight to keep it from going into effect.

Kansas Insurance Commissioner Sandy Praeger met with dozens of insurance executives, agents and community leaders Thursday to discuss plans to create insurance exchanges — a cornerstone of the health care bill passed by Congress last year.

Gov. Sam Brownback, Attorney General Derek Schmidt and many legislators hope the law is repealed or struck down in court. Last week, Kansas formally joined 25 other states that are suing Washington to block it.

Even though the Affordable Care Act is federal law, it falls to the states to implement many of its hundreds of requirements, regulations and programs. Praeger said the state can't afford to wait until the law's fate is decided.

"I wouldn't be doing my job if we just sat back and waited until all these questions are resolved," the Republican commissioner said. "I have to assume the law will stay on the books, and Kansas needs to be ready."

The law requires each state to create an "insurance exchange" by 2014, offering consumers a one-stop health insurance shop. Almost all individuals will be required to buy health insurance and will receive subsidies if they can't afford the premiums.

Those who aren't offered insurance through their employers will be able to compare and buy insurance plans through the state's online exchange.

Figuring out the details and getting the exchange up and running will take time, Praeger said. Should an existing government agency oversee the exchange, or should the state create a new nonprofit? Should the state mandate any particular types of coverage? How will premiums be paid — to the insurer, or to the exchange? Should there be one exchange, or perhaps a second to focus just on the Kansas City metro area?

Many of those decisions will fall to the Legislature. Praeger hopes to recommend options next year. In the meantime, she's created several committees to work out details.

If states fail to create their own exchanges by 2014, the federal government would take over and create one for them. Praeger said the state would be foolish to relinquish control over its own system just because some don't like the law behind it.

Even lawmakers critical of the law conceded that Praeger is right to begin planning for its requirements.

"It's a Catch-22," said Rep. Brenda Landwehr, R-Wichita, who chairs the House Health Committee. "But even if it (the law) is stopped as I think it should be, there's some value in exploring this."

Although she disagrees with major parts of the law — the insurance mandate, for one — Landwehr said Kansas could someday create an insurance exchange on its own.

Brownback supports the state's lawsuit challenging the law, but says that until the law is struck down or repealed, the state must fulfill its responsibilities.

Insurance executives told Praeger that they'll support her efforts, even though some still have reservations about the law. Matt All, general counsel for Blue Cross and Blue Shield of Kansas, said the state has no choice but to move forward.

"We have to get on this," All said. "It's so complex, there's no way this can happen overnight."

The state hasn't spent any of its own money getting ready, Praeger noted. Kansas received $1 million in federal funds to prepare for implementation of the law. It has applied for more.

But others want to slow the process down. Beverly Gossage, a Johnson County insurance agent, feared the new law will drive up insurance costs.

"Given the fact that we have 30 states that have filed lawsuits, why are we jumping so quickly?" she asked. "There's so much uncertainty right now. We should take a step back."