By Jim McLean
KHI News Service
TOPEKA, March 26
Kansas Insurance Commissioner Sandy Praeger readily acknowledges that she doesn”t fully understand how the industry she regulates would be affected by the passage of the House GOP health reform bill.
But, she says, that”s the problem. Echoing concerns expressed by others, most notably Marcia Nielsen, executive director of the Kansas Health Policy Authority, Praeger is alarmed by the speed with which the bill is being pushed through the legislative process.
House Bill 2591 was introduced on Wednesday. By the end of the day Thursday, the 58-page measure was on its way to the House floor as Senate Bill 11. It is scheduled for a vote
this week.
“What”s the hurry?” Praeger asked. “Why rush this and risk failing? If we really want workable reform, we need to understand the implications of the changes we”re making before we make them.”
Exchange dynamics
Specifically, Praeger is concerned the insurance exchange that the bill would create and the push to transition low-income Kansans off the Medicaid rolls to private insurance could unleash forces that segment the marketplace, making coverage too expensive for individuals with health problems.
“If you deregulate the market, you definitely create more losers than winners,” Praeger said. “That research has been done.”
Two of the House members most involved in drafting the proposal
Reps. Jeff Colyer, R-Overland Park, and Peggy Mast, R-Emporia
said Praeger needn”t be so concerned. Unlike market reforms being attempted in other states, they said, neither insurance companies nor consumers would be required to do business through the exchange. But it would create an opportunity for individual purchasers to pool contributions from multiple employers to buy coverage. They said it also would provide a mechanism through which the state could help purchase private insurance policies for Medicaid-eligible Kansans, moving them into the private market.
“If we purchase insurance for those currently on Medicaid through the connector (exchange) then the whole family would be covered, plus we could set up health savings accounts,” Mast said, noting that people could use the health savings accounts to cover the deductible costs that would go with low-cost, but high-deductible health coverage plans.
Even so, Praeger said the proposal directs the health policy authority to seek permission from the federal government to dramatically change the way the state operates the Medicaid program. As such, she said it should be routed through the Health for All Kansans Steering Committee, of which she is a member. That committee was formed earlier this year by the health policy authority at the urging of Gov. Kathleen Sebelius and legislative leaders to construct short- and long-term reform proposals.
“Isn”t that what the health policy authority was set up to do? This bill circumvents the process and I don”t understand why,” Praeger said.
Colyer argued that the window of opportunity to partner with federal regulators on a reform package could soon close.
“Our health system is not well and if we don”t pass major legislation this year, we will further harm the health of Kansans and cost the taxpayers millions of dollars,” he said recently in a prepared statement. “Our approach preserves the safety net thousands of Kansans depend upon while reducing the number of uninsured and expanding the private sector rather than adding more government programs.”
Industry reaction
William Pitsenberger, a senior vice president for Blue Cross Blue Shield of Kansas, the state”s largest health insurer, said the company isn”t opposed to the general thrust of the House GOP reform bill, which would shrink reliance on public programs and expand participation in the private market.
“There are interesting concepts in this,” he said.
Pitsenberger cited a provision to help small businesses overcome barriers to offering so-called section 125 plans so that their employees can use pre-tax dollars to pay their health insurance premiums. He
also noted a provision
that would
alter
COBRA benefits, allowing
workers at small
firms
who lose their jobs to continue purchasing health insurance for 18 months. Current law provides for six months.
Pitsenberger said though he has some questions about the mechanics of how certain reforms would be implemented, he hasn”t yet seen anything in the reform measure that alarms him.
“It doesn”t have us panicked,” he said on Friday. “But I may read it over the weekend and say, “Oh my gosh!””
One of the questions Pitsenberger said BCBS does have for the bill”s authors concerns the rules under which former Medicaid beneficiaries would be allowed to purchase private insurance.
“My assumption is you couldn”t reject them, that is, they wouldn”t be subject to normal underwriting rules,” he said. “I”m not sure how that would work.”
While it”s not a concern that Pitsenberger will immediately lose any sleep over, he said, “It”s the kind of question that will keep our actuaries up nights.”
-Jim McLean is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
jmclean@khi.org
or at 785-233-5443, ext. 110.