Beshear announces rates in health-insurance exchange, says Kentuckians will like them, especially the federal 'discounts'

By Al Cross
Kentucky Health News

Tossing out the first examples of what Kentuckians will pay for required health coverage through the state health insurance exchange that opens Oct. 1, Gov. Steve Beshear predicted yesterday, "The vast majority of people are going to be very excited about what they find. . . . When they check it out, they’re gonna sign up."

Beshear said there has been much speculation about premiums, but little talk about the federal subsidies (he called them "discounts") that the exchange will offer to individuals and households with incomes up to 400 percent of the federal poverty level. He said subsidies will be available to individuals earning as much as $45,960 a year, and to families of four with income as high as $94,200 a year.

Beshear notes that 15 percent of Kentuckians are uninsured (light green in pie chart); at left is
Kynect Director Carrie Banahan; at right is Health and Family Services Secretary Audrey Haynes.

Tea Party activist David Adams, who recently lost the first round of his court battle to stop the exchange and Medicaid expansion, has said some consumers will have to pay almost double for their current coverage, and he told The Courier-Journal that the subsidies won't make up for that.

About 15 percent of Kentuckians, more than 640,000, have no health coverage. About 308,000 will become eligible for the Medicaid program, which is being expanded under federal health reform to include people with incomes up to 138 percent of the poverty level. Among the other 332,000, 85 percent of those people will qualify for subsidies, Beshear said, and in some cases the subsidy will be 100 percent.

The subsidies are available only through the insurance exchange, which the state has branded Kynect. The exchange will offer five plans, with premiums based only on age, income, geography, number of people on the plan and how many of them use tobacco.

State's example of bronze plan for a smoker earning $30,000

The ceiling for the tobacco surcharge is 40 percent, which has drawn criticism, but the state Department of Insurance said that is the most common surcharge in the state's health-insurance industry. Beshear said a 50-year-old man who smokes and earns $30,000 a year would still pay only $160 a month for coverage under the "bronze" plan, the one with the lowest premiums and highest deductibles and other out-of-pocket costs. Under the plan with the lowest deductibles, he would pay $279.

The bronze plan has a very large $6,300 deductible. The other standard plans are silver, gold and platinum; their deductibles are 20 percent (called "co-insurance") plus $4,600, $2,500 and $1,000, respectively. The exchange will also offer people under 30 a plan that provides only catastrophic coverage with a "very high deductible" and no subsidy, Beshear said.

Among other examples in the bronze plan, which has a $6,300 annual deductible: A nonsmoking farmer in his mid-50s earning $34,000 a year would pay $47; a family of four with no smokers and $70,000 annual income would pay $403; a 32-year-old single mother with two children and $40,000 income would pay $133.

Beshear offered no average cost, saying “There are too many factors to create an average that would be useful. . .. The bottom line is that families must do some research,” which the Kynect website and call center can help them with starting Oct. 1. He said the plans shouldn't be compared to individual plans offered in commercial market, because “the coverages are so much different.”

One big difference is that under the federal health reform law, all plans must cover prescription drugs, hospital care, maternity and newborn services, mental health and substance abuse services, emergency care, rehabilitative services and devices, laboratory services, preventive and wellness services, chronic disease management and pediatric services. Also, they are not allowed to have any dollar limits on coverage.

The law also bans insurance companies from denying or dropping coverage because of someone's health condition, meaning that "For the first time we’re gonna be able to provide affordable health insurance of every single Kentuckian. . . . This is a historic event in the commonwealth." The federal law requires practically every American to have health insurance.

The plans' geography is based on the state's eight Medicaid regions. Beshear said at least two insurance companies will be offering plans in each region, unlike some states. He said four companies have proposed to offer dental insurance, but those plans are still under review by Kynect and the Department of Insurance, which evaluates them for actuarial soundness.

Humana Inc., Anthem Blue Cross and the new Kentucky Health Cooperative will offer policies for individuals, while Anthem, the co-op, Bluegrass Family Health and United Healthcare will provide employee coverage for businesses. Employers with fewer than 50 workers are not required to insure them, and those with fewer than 25 employees can get tax credits for doing so.

The rates are for 2014. Beshear said companies were “understandably cautious” in setting premiums without any experience on which to base them, so he expects rates to decrease in 2015.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Beshear announces launch of Kynect, the state's new online shop for health insurance; open enrollment starts Oct. 1

Gov. Steve Beshear has announced the launch of Kentucky’s Healthcare Connection, which is referred to as Kynect and is Kentucky's one-stop onlineshop for the state's new health insurance exchange.

Beginning next year, most Americans will be required to have health insurance, and Kynect is designed to help an estimated 640,000 uninsured Kentuckians get coverage through private insurance plans, Medicaid or the Kentucky Children’s Health Insurance Program. The online service is also aimed to promote public education and awareness about the health benefit exchange, says a recent press release.

“When I issued an executive order last year creating a state-based health benefit exchange, I did so to ensure that our health benefit exchange would be designed to best meet the unique needs of Kentuckians,” Beshear said. “Individuals, families and small businesses will be able to use kynect for one-stop shopping to find health coverage and determine if they are eligible for payment assistance or tax credits to help cover costs.”

During open enrollment, which begins Oct. 1, Kentuckians and small businesses can compare and select health insurance plans using the Kynect website, a toll-free contact center, a mail-in application or in person, says the release. People can also use the website to find out if they qualify for payment assistance and special discounts on deductibles, co-pays and co-insurance.

For example, the website indicates that a family of four making $48,000 will receive a tax credit that can be used to pay insurance premiums, which is estimated to be $252 per month, in addition to government subsidies for medical care. A family of four making $80,000 will a receive tax credit too, and insurance premiums are estimated to be $634 per month. Small businesses can also use the website to see if they qualify for specific tax credits (Click here for a PDF fact sheet about payment assistance)

“Starting today, we are undertaking a major education and awareness campaign to ensure that all uninsured Kentuckians understand how Kynect can help them and their families find affordable health coverage,” said Audrey Haynes, secretary for the Cabinet for Health and Family Services, which will oversee Kynect along with the Kentucky Office of the Health Benefit Exchange.

Beshear created the health exchange by an executive order in July 2012. A recent lawsuit alleges this action was not authorized and should first be approved by the General Assembly. To date, Kentucky has received about $250 million in federal grants to cover the initial costs of exchange, but the state will be responsible for all funding for the exchange beginning in 2015. Kentuckians can visit the service's website or watch the video below to learn more about the program. 

Poll shows health care costs are a burden for many Kentuckians

A recent statewide survey shows health-care costs are a burden for many Kentuckians, especially for those who are poor and don't have insurance and put off getting care they need because they can't afford it.

More than 60 percent of Kentucky adults in the poll said high costs forced them or a family member living in their home to delay getting care in the past year. Not surprisingly, almost 90 percent of uninsured respondents reported going completely without care in the past year.

The Kentucky Health Issues Poll also showed that 48 percent have relied on home remedies when they are sick instead of going to a doctor, 43 percent have postponed care they needed, 37 percent have not filled a prescription or skipped a dental visit or checkup, 36 percent skipped a recommended medical test or treatment, and 16 percent have cut pills in half or skipped doses of medicine for financial reasons. Overall, 64 percent answered "yes" to at least one of those questions.

“Although our economy is improving, many Kentucky families are still struggling financially. Our research shows healthcare costs have a significant impact on Kentuckians’ actions,” said Dr. Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky, which co-sponsored the poll. “Timely access to quality, affordable healthcare is important to restore and maintain Kentuckians’ health and productivity. When we delay or go without care, illness severity and costs can escalate. Based on the KHIP results, many Kentuckians are taking risks with their overall health because of the expense.”

Rising costs of health care do not affect all Kentuckians in the same way; almost 40 percent of Kentucky adults reported that paying for health care and health insurance is not a financial burden. Those who did say costs were a burden said they were burdened equally by the costs of doctor visits, prescription drugs and insurance premiums or deductibles.

The poll was funded by the foundation and the Health Foundation of Greater Cincinnati. The poll was conducted Sept. 20 and Oct. 14 of last year by the Institute for Policy Research at the University of Cincinnati. A random sample of 1,680 adults from throughout Kentucky was interviewed by telephone, including landlines and cell phones, and the poll has a margin of error of plus or 2.5 points.

Kaiser study estimates how changing Medicare to a premium-support plan like Ryan's would cost differently by state and region

A Kaiser Family Foundation study has looked into what Medicare beneficiaries might pay under a "premium support" system that relies on competitive bidding, like the one proposed by House Budget Committee Chairman and Republican vice-presidential candidate Paul Ryan. Presidential nominee Mitt Romney has also supported a premium-support system, which allows beneficiaries to choose among competing plans.

Under such plans, if subscribers choose to enroll in a more costly plan, for whatever reason, they would pay the additional premiums. This differs from the current Medicare system, explains Kaiser, "in which beneficiaries generally pay the same Medicare premium regardless of where they live, whether they choose traditional Medicare or a private plan, or whether they live in a high-cost or low-cost area." Assuming full implementation of such a premium support system, and assuming current plan preferences among beneficiaries, the Kaiser study "estimates that:

• Nearly six in 10 Medicare beneficiaries nationally could face higher premiums, assuming current plan preferences, including more than half of the beneficiaries enrolled in traditional Medicare and almost nine in 10 Medicare Advantage. Even if as many as a fourth of all beneficiaries moved into a low-cost plan offered in their area, more than a third of all beneficiaries would still face higher premiums.
• Premiums for traditional Medicare would vary widely based on geography, with no increase for beneficiaries living in Alaska, Delaware, Hawaii, Wyoming, or Washington, D.C., but an average increase of at least $100 per month in California, Florida, Michigan, Nevada, New Jersey and New York. Such variations would exist even within a state, with traditional Medicare premiums remaining unchanged in California's San Francisco and Sacramento counties and rising by more than $200 per month in Los Angeles and Orange counties.
• At least nine in 10 Medicare beneficiaries in Connecticut, Florida, Massachusetts and New Jersey would face higher premiums to keep their current benefits.

"This analysis does not attempt to model all aspects of any specific premium-support proposal, which would require more details than are currently available and assumptions about shifts in demographics, spending, and enrollment," Kaiser says. "The analysis also differs from Chairman Ryan's most recent proposal by assuming full implementation in 2010 (rather than a phased-in implementation starting in 2023) and by not exempting everyone who is at least 55 years old now." (Read more) To read the full report, go here.

Annual report for Cincinnati-Northern Kentucky region shows employee health care costs there will go up about $400 next year

In an continuing effort to move health costs off the shoulders of employers and onto employees, workers in Greater Cincinnati and Northern Kentucky will likely pay an average $4,775 out of their own pockets for health care in 2013 -- about $400 more than this year. That's nearly $2,000 more than they paid in 2007. The payments include premiums through their employer, as well as office co-pays and deductibles, said Aon Hewitt, the consultant that produced its annual cost report. These payments are slightly less than the national average of $4,814.

The trend toward "more employee accountability" means that nearly all companies are adjusting the designs of their employee plans, adding wellness programs and moving more employees to high-deductible plans with health savings accounts, reports Cliff Peale of the Cincinnati Enquirer. Penalties are now common for workers who smoke or who don’t take required health screenings.

The report notes that companies continue to bear most of the cost of their employees’ health insurance. It also predicts that, counting the portion paid by both companies and workers, the cost of a health care policy will increase 6.4 percent next year to $11,566. That should return the region to numbers more aligned with the national average. About half of all Americans still get benefits through their employers, and there are nearly 50 million without health insurance at all. (Read more)

Families with high-deductible health insurance plans are more likely to put off care, study finds

Families who have health plans with high deductibles and who have members with chronic health conditions are far more likely to put off or forgo care entirely due to cost, a study has found. The odds of those families delaying or forgoing care were three to four times more likely than families with traditional plans.

Those were the key findings of a study published in the Journal of General Internal Medicine. Using a mail and phone survey, researchers talked to families with employer-sponsored insurance in Massachusetts between April and December 2008. Respondents included 208 families with high-deductible plans and 370 families with traditional plans.

For adults with high-deductible plans and with incomes less than four times the federal poverty level, the probability they would delay or forgo care was 40 percent. For adults in the same income bracket with traditional plans that probability was only 15.1 percent. (Read more)