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Kentucky legislative committee delays vote on creating health insurance exchange [Lexington Herald-Leader]

By Beth Musgrave, Lexington Herald-Leader
McClatchy-Tribune Information Services

Aug. 16--FRANKFORT -- After more than an hour of debate, the Kentucky legislature's Interim Joint Committee on Health and Welfare on Wednesday delayed a vote on an executive order that would create an online marketplace for insurance plans, a key part of the Patient Protection and Affordable Care Act.

Even if the committee votes against creating an exchange at a special meeting in September, the controversial part of President Barack Obama's landmark health care bill will be started in Kentucky.

Gov. Steve Beshear signed an executive order July 17 creating the health benefit exchange. The legislature has tried to stop the exchange, an online marketplace for people who do not have insurance, from going into effect. In July, the Capital Projects and Bond Oversight Committee rejected a proposal to spend nearly $300,000 for rental space to accommodate 201 employees for the new health insurance exchange.

But Finance Secretary Lori Flanery has the authority to overturn that vote and rent the space.

Rep. Tom Burch, D-Louisville, co-chairman of the committee, reminded Health and Welfare Committee members during a meeting Wednesday at Sullivan University in Louisville that if the committee votes against the executive order, Beshear can override it.

Nevertheless, many Republicans expressed reluctance to vote on the issue without having more information about the exchange and its cost. The exchange, set to begin operation Jan. 1, 2014, will assist employers with enrolling workers in health plans and enable individuals to receive tax credits and subsidies for their insurance premiums. The health insurance exchange will be for people who do not have insurance and do not qualify for government programs.

Carrie Banaham, executive director of Kentucky Health Benefit Exchange, told legislators Wednesday that the exchange will be "basically a marketplace or venue for people to purchase insurance."

The first year of the exchange will be paid for by the federal government, Banaham said. It will cost $67 million the following year. The state will use grant money to pay for it.

But Republican legislators said they were concerned about future costs. Banaham and Bill Nold of the Kentucky Department of Insurance told the committee that they hope the exchange will be self-funded through user fees paid by insurance companies. Insurance companies now pay fees used to fund a high-risk insurance pool for people who cannot get insurance. That pool will be obsolete once the exchanges are operational, and the fees could go toward funding the exchange, Banaham said.

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If the state does not start its own exchange, the federal government will start an exchange for Kentucky, state officials told the committee. Nold said it's not clear how much the federal government would charge states to administer the exchanges. Many provider and insurance groups have encouraged the state to run the exchanges, arguing that this would give the state more control.

Rep. Addia Wuchner, R-Florence, said she could not vote on the measure without additional information about costs and how the exchanges will operate. "All we have is the executive order," Wuchner said.

At first Burch did not accept Wuchner's motion to table the issue. A legislative committee must vote up or down on executive order within 60 days. The next meeting for the Interim Joint Committee on Health and Welfare would be past those 60 days. Wuchner later asked that a special meeting be called in September so the committee could vote on the matter.

The committee agreed via a voice vote.

Rep. Darryl Owens, D-Louisville, was the only member of the committee to voice opposition, saying it was foolish to delay a vote when the exchange would go into effect even if the committee voted the measure down.

In September, the Health and Welfare Committee will also vote on an executive order that creates a 17-member panel of experts to examine child abuse deaths in Kentucky. Beshear created the external review panel via executive order on July 13.

Beth Musgrave: (859) 231-3205. Twitter: @BGPolitics. Blog: bluegrasspolitics.bloginky.com

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(c)2012 the Lexington Herald-Leader (Lexington, Ky.)

Visit the Lexington Herald-Leader (Lexington, Ky.) at www.kentucky.com

Distributed by MCT Information Services

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