By RONNIE ELLIS
CNHI News Service
Gov. Steve Beshear said Tuesday that most of Kentucky’s uninsured population will qualify for Medicaid coverage or federal subsidies and tax credits which will make health insurance affordable through the state’s new health benefit exchange under the federal Affordable Care Act.
Five insurance companies have submitted rates approved by the Department of Insurance: Humana, Anthem, United Healthcare, Bluegrass Family Health, and The Kentucky Health Cooperative. All will cover an expanded list of services and no one can be denied coverage because of pre-existing conditions.
Beshear said four out of five uninsured Kentuckians will qualify for some sort of coverage with expanded Medicaid rolls the new law will “provide affordable health insurance to every single Kentuckian for the first time in history.”
Presently 640,000 Kentuckians, about 15 percent of the state’s population, have no insurance.
“They roll the dice every day and just hope and pray they don’t get sick,” Beshear said. “They live knowing bankruptcy is just one bad diagnosis away.”
About 308,000 with incomes of 138 percent of the federal poverty level will be eligible for Medicaid coverage beginning Jan. 1, 2014. No one is required to sign up for Medicaid, contrary to some reports by critics of the law — but Beshear said he thinks people would be “crazy not to because they’ll get essentially free coverage.”
The remaining 332,000 can shop for health coverage through the health exchanges. Enrollment begins Oct. 1 and remains open until March 31, 2014 but those who sign up by Dec. 15 of this year will receive coverage beginning Jan. 1.
Individual and family rates will vary depending upon age, the number of people on the policy, whether the covered person or persons smoke and the region of the state in which they live.
Beshear cautioned it is nearly impossible to compare rates to plans which were available before the Affordable Care Act — “Obamacare” — because of different coverages and benefits. Critics of the new law have predicted skyrocketing premiums.
He also warned those shopping for coverage through the benefit exchange, called “kynect,” not to be frightened by the “sticker price,” because all but about 50,000 Kentuckians will qualify for some sort of subsidy or tax credit.
Nearly all will see “substantially” lower costs, he said.
Consumers will choose from among four plans: bronze, silver, gold and platinum. As the level of coverage increases, consumers will pay smaller deductibles but larger monthly premiums.
For instance, a healthy single woman in her 20’s might pay as little as $51 per month but would have a deductible of $6,300 under the bronze plan. The actual premium price would be $127 per month, but with an income of $20,000 a year from a part-time job, she would qualify for a federal subsidy of $76 per month, lowering her cost to $51.
If the same woman wished to lower her deductible to as little as $1,000 under the platinum plan, her monthly premium would increase to $112 per month after receiving a federal subsidy.
A family of four with a family income of $70,000 would see a premium of $501 per month but would pay only $403 a month after subsidies. They would have a $12,600 deductible. If the family wished to lower its deductible to $2,000 in the most expensive plan, their monthly premium, after subsidies, would be $614.
“The bottom line is that families must do some research to determine their personalized rates and subsidies, compare the plans and determine which is the best plan for their needs,” Beshear said.
All the plans cover “essential health benefits:” doctor or clinic care; emergency services; hospitalization; maternity and newborn care; prescription drugs; laboratory services; mental health care including substance abuse treatment; preventive services, and pediatric care.
The rates will be effective for one year, according to Department of Insurance Commissioner Sharon Clark.
Beshear pointed out the new federal law also requires companies to expend a minimum of 80 percent of the premiums they collect on actual health benefit payments or rebate the difference at the end of the year. That provision is already in effect, Clark said, and last year insurance companies paid $5.5 million in rebates to Kentucky policy holders.
Beshear said companies are “understandably cautious” in setting rates during the first year when they have little experience or data on which to base rates, setting them high enough to ensure a profit. But, he said, with experience and especially if they have to make rebate payments, “I foresee, quite honestly, rates moving in a favorable (lower) direction.”
Beshear said he does not believe many employers will reduce hours of employees or the number of employees to avoid insurance costs to employees, though he conceded a few may. But he said no employer with 50 or fewer employees faces any penalties for not providing insurance and companies with 25 or fewer employees may qualify for “significant tax credits” to help them pay for employee coverage.
He encouraged prospective consumers to go to www.kynect.ky.gov or to call toll free 1-855-4kynect to receive information and assistance in choosing plans best suited for individual or family circumstances.
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.