An 11-year-old state high-risk health insurance pool will close down in 2014 to make way for guaranteed issue of individual health insurance coverage in the private market under the recently upheld federal Affordable Care Act, state officials told a state legislative committee on Aug. 1.
Kentucky Access—created by state lawmakers in 2000 to guarantee coverage to Kentuckians with high cost medical conditions who are often priced out of the individual private health insurance market—should have the majority of its expenses paid and its clients moved to the private insurance market by June 2014, Kentucky Access Acting Director D.J. Wasson told the Tobacco Settlement Agreement Fund Oversight Committee. Wasson said Kentucky Access will spend 2013 notifying its members that the program is winding down and “giving them options for the transition to the marketplace.”
Kentucky Access will become obsolete as of Jan. 1, 2014 due to language in the Affordable Care Act that requires all new policies sold in the individual health insurance market as of that date be “guaranteed issue”—a requirement now only required by a handful of states, said Wasson. Signed into law in 2010, the Affordable Care Act was recently upheld by the U.S. Supreme Court.
Wasson said history has shown that at least six months is needed to wrap up the claims process, including any residual claims, in a transition like the one Kentucky Access is about to make.
“We’ll do all we can to try to encourage filing those claims early so we can have a good handle on how much funding we’ll need to meet our members’ claims and our financial obligations, and wind down the program,” said Wasson.
Clark told the committee it is her hope that coverage will be less costly for members of Kentucky Access once they are moved into the private market.
“These policies in high risk pools are very expensive. So, our hopes are that when they are able to get it from the private marketplace, it will be at a cheaper expense,” said Clark.
At the end of June, there were 4,345 active members in Kentucky Access, said Wasson. Memberships has been declining for several reasons, including the “aging out” of members who are now eligible for Medicare, members obtaining coverage elsewhere, or failure of members to pay their premiums.
Kentucky Access reports to the Tobacco Settlement Agreement Fund Oversight Committee regularly as a recipient of part of Kentucky’s share of a multi-billion dollar 1998 national tobacco settlement. Twenty five percent of Kentucky’s share of the settlement is placed in a Kentucky Health Care Improvement Fund that funds a handful of state health programs including Kentucky Access, which is also funded by premiums, insurer assessments, and grants.
This fiscal year, Kentucky Access is projected to receive $14.86 million in appropriations from the 14 year old tobacco settlement, according to program officials.
I’ll report more happenings in Frankfort next time. Have a great week ahead.