Obamacare in Kentucky

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Health Insurance Marketplace in Kentucky

If you live in Kentucky, kynect: Kentucky’s Healthcare Connection is the Health Insurance Marketplace to serve you. Instead of HealthCare.gov, you’ll use the kynect: Kentucky’s Healthcare Connection website to apply for coverage, compare plans, and enroll. Visit kynect: Kentucky’s Healthcare Connection now to learn more.

Choosing the Right Health Insurance Plan

There are a number of different tiers of plans available on the Kentucky Health Insurance Exchange. Plans range from bare bones “bronze” plans which cover 60% of pocket medical costs to “platinum” plans which have greater coverage but come with higher premiums. In general higher premiums mean lower out-of-pocket costs and a wider insurer network of doctors and hospitals.The plans are as listed below:

NOTE: All cost sharing is of out of pocket costs. Please see ObamaCare health benefits for services that are covered at no out of pocket charge on all plans. The maximum out-of-pocket costs for any Marketplace plan for 2014 are $6,350 for an individual plan and $12,700 for a family plan.

Bronze Plan: The bronze plan is the lowest cost plan available. It has the lowest premiums and in exchange has the lowest actuarial value. The actuarial value of a bronze plan is 60%. This means that 60% of medical costs are paid for by the insurance company, leaving the other 40% to be paid by you.

Silver Plan: The Silver plan is the second lowest cost plan, it has an actuarial value of 70%. This means that 70% of medical costs are paid for by the insurance company, leaving the other 30% to be paid by you. The Silver plan is the standard choice for most reasonably healthy families who historically use medical services.

Gold Plan: The Gold plan is the second most expensive plan, it has an actuarial value of 80%. This means that 80% of medical costs are paid for by the insurance company, leaving the other 20% to be paid by you.

Platinum Plan: The Platinum plan is the plan with the highest premiums offered on the Kentucky insurance exchange. The Platinum plan as an actuarial value of 90%. This means that 90% of medical costs are paid for by the insurance company, leaving the other 10% to be paid by you. This plan is suggested to those with high incomes and those in poor health. Although coverage is more expensive up front the 90% coverage of costs will help those who use medical services frequently.

Kentucky health insurers don’t have to offer every tier of plan, but within the Kentucky health insurance exchange, all health insurance companies must offer at least one silver plan and one gold plan to consumers.

Catastrophic plans – which have very high deductibles and essentially provide protection from worst-case scenarios, like a serious accident or extended illness — are available to people under 30 years old and to people who have hardship exemptions from the fee that most people without health coverage must pay.

Expanded Medicaid

Kentucky will expand its Medicaid program in 2014 to cover households with incomes up to 133% of the federal poverty level. That works out to about $15,800 a year for 1 person or $32,500 for a family of 4. You can find out whether you qualify for Medicaid in Kentucky 2 ways: Contact your state Medicaid agency right now or fill out an application for coverage in the Health Insurance Marketplace.

Information for:

Individuals and Families

Small businesses

If you need more detailed analysis, identification of issues, solutions, and implementation of your health insurance plan please let us know with the form below and we’ll get right back to you.

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Consumer Operated and Oriented Plan Program

Consumer Operated and Oriented Plan (CO-OP) Program are qualified nonprofit health insurance issuers that offer competitive health plans in the individual and small group markets.  CO-OP in Kentucky:

Kentucky Health Cooperative

Accountable Care Organizations in Kentucky

ACOs are profit-driven health innovators primarily serving Medicare patients who are financially rewarded by the government and private insurance companies for delivering medical services that lead to better health outcomes for less money.

Health care facilities where Innovation Models are being testedzOwensboro ACO LLC Owensboro, KY – Advance Payment ACO Model

The Insurance Exchange/Marketplace

What has been done, not been done, or left up to the federal government to do.

Establishing the Exchange in Kentucky

On July 17, 2012, Governor Steven L. Beshear (D) issued Executive Order 587 establishing the Kentucky Health Benefit Exchange (KHBE) after the Supreme Court ruled to uphold the Affordable Care Act (ACA).1 In May 2013, the state announced that its online marketplace would be called “kynect.”

Prior to the Executive Order, the Kentucky Cabinet for Health and Family Services led Exchange planning in the state. Working collaboratively with the Department for Medicaid Services and the Kentucky Department of Insurance, the state developed an interagency Exchange Team that met regularly to define issues of governance, information technology (IT), and eligibility.2 In June 2012, the state released survey results revealing stakeholder support for a state-based exchange with an independent governing board.3

Structure: The Executive Order establishes the Office of the Kentucky Health Benefit Exchange “within the Cabinet for Health and Family Services.” The Order also creates four divisions within the Office: the Division of Health Care Policy and Administration, the Division of Information Systems, the Division of Financial and Operations Administration, and the Division of Communication and Outreach.

Governance: The Office of the Kentucky Health Benefit Exchange will review and discuss issues with an Exchange Advisory Board. Executive Order 587 called for an 11-member board; however, the Governor expanded the size of the Board to 19 members prior to announcing the appointments. The Advisory Board includes three ex-officio members (or their designees): the Commissioner of the Department of Medicaid Services, the Commissioner of the Department of Insurance, and the Commissioner of the Department for Behavioral Health and Developmental and Intellectual Disabilities. The Commissioner of the Department of Insurance serves as Chair of the Board. The Governor appointed sixteen members, three representatives of insurers that offer plans in the state, one representative of insurance agents licensed to sell in the state, three representatives of non-facility based health care providers licensed in the state, four representatives of facility based health care providers licensed in the state, one small business representative, one representative of an individual purchaser of health plans, and three consumer representatives. Board members are required to have relevant experience in health benefits administration, health care finance, health plan purchasing, health care delivery system administration, public health, or health policy issues related to the small group and individual markets and the uninsured.

On September 19, 2012, Governor Beshear appointed members to the Exchange Advisory Board.4 The appointed Board members are:

  • Deborah Moessner, Anthem Blue Cross and Blue Shield
  • Jeff Bringardner, Humana
  • Carl Felix, Bluegrass Family Health
  • Marcus Woodward, Woodward & Associates
  • Connie Hauser, P.T. Pros Inc
  • John Thompson, Lee & Lee P.S.C.
  • Dr. Michael Huang, Kentucky Clinic South
  • Ruth Brinkley, KentuckyOne Health
  • Julie Paxton, Mountain Comprehensive Care Center
  • Ed Erway, University of Kentucky Healthcare
  • Donna Ghobadi, Central Baptist Hospital
  • Joe Ellis, Eye Care Associates of Kentucky
  • Gabriela Alcalde, Foundation for a Healthy Kentucky
  • David Allgood, Center for Accessible Living
  • Andrea Bennett, Kentucky Youth Advocates
  • Tihisha Rawlins, AARP

An Executive Director for the Office of the Kentucky Health Benefit Exchange has been appointed by the Governor.5 The Secretary of the Cabinet for Health and Family Services will appoint a Director for each newly created Division within the Office. The Board established advisory sub-committees consisting of consumers or other stakeholder groups to study specific policy issues and advise the Board.6

Contracting with Plans: In May 2013, Kentucky released final regulations detailing requirements for certification and participation of Qualified Health Plans (QHPs) and dental plans in the Exchange.7 The KHBE will function as a clearinghouse and work in partnership with the Department of Insurance (DOI) to certify QHPs. In order to participate in kynect, issuers must enter into a participation agreement with the KHBE and be accredited by the Utilization Review Accreditation Commission (URAC), the National Committee for Quality Assurance (NCQA), or another accrediting entity recognized by the Department of Health and Human Services (HHS). Issuers will submit rate and form filings through the System for Electronic Rate and Form Filing (SERFF) for review by the DOI. The KHBE will conduct final certification of QHPs no later than August 31 for the following plan year, and QHPs will be recertified every two years. As of May 2013, five insurers had filed notice of intent to participate in kynect.8

Issuers may offer QHPs in the individual Exchange or the SHOP. To participate in the individual Exchange, issuers must offer at least one QHP at the silver metal tier, one QHP at the gold metal tier, a child-only plan, and a catastrophic plan. For the SHOP exchange, issuers are required to offer at least one silver-level QHP and one gold-level QHP. In both markets, issuers may not offer more than four QHPs within a metal level of coverage. KHBE will consider the same plan offered with dental benefits and without dental benefits as one QHP. Issuers will not be required to participate in both the Exchange and non-Exchange markets; however, rates must be the same for plans offered in both markets.

Issuers must ensure that a QHP’s provider network is available to all enrollees within the QHP service area and includes providers that specialize in mental health and substance abuse services. At least 20% of available essential community providers (ECPs) in the QHP service area must participate in the provider network and issuers must contract with at least one ECP in each ECP category in each county in the service area. Issuers must also make provider network directories for QHPs available to the KHBE for online publication.

Issuers must submit information on enrollment, denied claims, rating practices, cost-sharing, and payments for out-of-network coverage to the KHBE, DOI, and HHS and provide public access to the data. Issuers are also required to establish and report on quality improvement strategies.

Dental and Vision Benefits: QHPs with embedded dental benefits, QHPs without dental benefits, and stand-alone dental plans may be sold on the Exchange. Stand-alone dental plans must offer one variation with 70% actuarial value and one variation with 85% actuarial value. Insurers must also limit annual cost-sharing to $1,000 for a plan with one child enrollee or $2,000 for a plan with two or more child enrollees. Insurers may offer a stand-alone plan that covers individuals regardless of age, as long as it includes the pediatric dental essential health benefit required under the Affordable Care Act.7

Consumer Assistance and Outreach: In September 2012, the Exchange Advisory Board created a Navigator/Agent Subcommittee to discuss issues regarding the Navigator program. Kentucky procured a subcontractor to design the Navigator and In-Person Assister Program (IPA) Program, including conducting a needs assessment and developing a training curriculum. The general role of Navigators, IPAs, and Certified Application Counselors will be to educate consumers and facilitate enrollment, and all assisters will be subject to the same training requirements.9 Based on proposed regulations from HHS establishing that state-based Exchanges may rely solely on IPAs for the first year of operation, Kentucky decided to delay implementation of the Navigator program and utilize only an IPA program in 2014. This will allow the state to use federal funding to operate the program.10 Assisters will be called “kynectors” and will work in both the individual and SHOP markets. The KHBE intends to issue an RFP in May 2013 and announce awardees in June.

Agents and brokers will also play a role in enrolling individuals and small employers into coverage through kynect. In April 2013, the subcommittee recommended that in order to participate on the Exchange, agents must be appointed by at least two issuers offering plans through the Exchange. Web brokers will not initially be allowed to sell on kynect but their participation may be considered in the future.

In October 2012, the Board created an Education and Outreach Subcommittee to make recommendations related to Exchange outreach activities and to review educational materials. In November 2012, the KHBE contracted with a marketing vendor to establish a branding and marketing plan for the Exchange. The marketing campaign is broken out into three phases: brand introduction, brand education, and brand enrollment. The brand introduction phase will begin in June 2013, and the KHBE is working with the vendor to produce marketing materials. All phases will include in-person outreach at events, such as state fairs, road shows, and community sessions.11

In April 2013, Kentucky procured a subcontractor to design, implement, and maintain a contact center. The subcontractor will train employees using information provided by the KHBE, and the contact center will open on August 15, 2013.10 In May 2013, the KHBE launched a website that will serve as a portal to enrollment for consumers and currently provides educational materials on kynect, including a video and fact sheets.

Small Business Health Options Program (SHOP) Exchange: Kentucky will operate one Exchange for its SHOP and individual markets to reduce administrative and financial burden.12 The Exchange Advisory Board created a SHOP Subcommittee to make policy recommendations on SHOP enrollment and eligibility, employer choice requirements, and group participation rules.  In the spring of 2013, the KHBE issued draft regulations on the SHOP. As defined by the regulation, small employers will be limited to groups of 2 to 50 employees through 2015 and 1 to 100 employees for 2016 and beyond. The SHOP will require a 75% minimum group participation rate. Employers will offer employees a single QHP, all available QHPs in one metal level of coverage, or one or more QHPs at more than one metal level of coverage, if the metal levels are contiguous. If an employer offers more than one QHP, the employer will select a QHP to serve as a reference plan for purposes of determining premium contributions. Employers will contribute a minimum of 50 percent toward the premium for employee-only coverage under the reference plan. Comments on the draft regulation were due on May 24, 2013.13

Information Technology (IT): In October 2012, the Exchange awarded a contract for subcontractors to develop an end-to-end Eligibility and Enrollment system that includes functions required to process all Medicaid beneficiaries and Exchange enrollees.14 The integrated system will have the capability to screen applications, determine eligibility, complete enrollment and provide consumer support for individuals, employers, Navigators and agents.15 The vision is to include SNAP and TANF in future phases of implementation.

In March 2013, the Center for Consumer Information and Insurance Oversight (CCIIO) performed its final detailed design review of the Exchange’s system architecture and plan for conducting eligibility and enrollment functions. Also in March 2013, the Exchange participated in the first wave of information technology testing with the federal data hub.16

Financing: The Exchange will cost an estimated $39.5 million to operate in its first year. The KHBE is considering funding the Exchange through an assessment of insurers inside and outside of kynect, which is the current funding mechanism for Kentucky’s high risk pool. The Exchange will not be financed through the General Fund.17

Essential Health Benefits (EHB): The ACA requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. Kentucky recommended the state use the Anthem Preferred Provider Organization (PPO) as the benchmark plan and KCHIP as the pediatric dental and vision supplement.18

Exchange Funding

In September 2010, the Kentucky Cabinet for Health and Family Services’ Office of Health Policy received a federal Exchange Planning grant of $1 million and in August, the same agency was awarded a federal Level One Establishment grant for almost $7.7 million to fund IT systems. In February 2012, the agency was awarded a $57.8 million grant to continue planning and building the requisite IT systems which will provide integrated eligibility and enrollment with the Medicaid program. In September 2012, Kentucky received a third Level One grant of $4.4 million to support the development of a Navigator program and assess access to health care services. The state was awarded a Level Two Establishment Grant for $182.7 million in January 2013 to develop a consumer and stakeholder support network and to complete an interoperable IT system that will integrate Kentucky’s Health Benefit Exchange with all of Kentucky’s existing health and human services programs.19

Expansion of Medicaid

From 2014 to 2017, the federal government will pay for 100% of the difference between a state’s current Medicaid eligibility level and the ACA minimum. Federal contributions to the expansion will drop to 95% in 2017 and remain at 90% after 2020, according to the ACA.

As the ACA was originally written, states would lose all Medicaid funding if they refused to expand their program to the ACA minimum.

However, the Supreme Court in June 2012 ruled that the federal government could not withhold Medicaid funding for states that chose not to expand their programs. The decision effectively allowed state officials to opt out of the expansion, and some have said they will do just that.

Kentucky is participating in Medicaid expansion pending the outcome of a lawsuit.

Next Steps

On December 14, 2012, Kentucky received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a state-based exchange.20 Final approval is contingent upon the state demonstrating its ability to perform all required Exchange activities on time and complying with future guidance and regulations.

For more information on Kentucky’s exchange planning, visit: http://healthbenefitexchange.ky.gov/

Footnotes
  1. Executive Order 587. July 17, 2012.← Return to text
  2. Exchange Planning Grant Third Quarterly Report. Submitted September 1, 2011.← Return to text
  3. Office of Health Policy. Stakeholder Perspectives on Health Benefit Exchanges. Kentucky Cabinet for Health and Family Services, June 2012.← Return to text
  4. Gov Beshear Appoints Members to Health Exchange Board.” September 18, 2012. Governor Beshear’s Communications Office.← Return to text
  5. Beshear Issues Executive Order Creating Kentucky Health Benefit Exchange.’ July 17, 2012. Lex18.com.← Return to text
  6. See Kentucky Health Benefit Exchange Subcommittees.← Return to text
  7. 900 KAR 10:010E. Exchange Participation Requirements and Certification of Qualified Health Plans and Qualified Dental Plans. May 13, 2013.← Return to text
  8. Beshear introduces website for Kentucky’s health insurance exchange.” May 15, 2013.← Return to text
  9. Kentucky Health Benefit Exchange Advisory Board Navigator/Agent Subcommittee Meeting Minutes. March 21, 2013.← Return to text
  10. Kentucky Health Benefit Exchange Advisory Board Navigator/Agent Subcommittee Meeting Minutes. April 18, 2013.← Return to text
  11. Estimated Timeline for KHBE Branding and Marketing Campaign. April 2013.← Return to text
  12. Kentucky Health Benefit Exchange Advisory Board SHOP Subcommittee Meeting Minutes. October 8, 2012.← Return to text
  13. 900 KAR 10:020E. Kentucky Health Benefit Exchange Small Business Health Options Program.← Return to text
  14. Kentucky Health Benefit Exchange Advisory Board Meeting Minutes. October 25, 2012.← Return to text
  15. Commonwealth of Kentucky Solicitation. Cabinet for Health and Family Services. Health Benefit Exchange. May 22, 2012.← Return to text
  16. Kentucky Health Benefit Exchange Advisory Board Meeting Minutes. March 28, 2013.← Return to text
  17. Kentucky Health Benefit Exchange Advisory Board Meeting Minutes. December 20, 2012.← Return to text
  18. Kentucky Department of Insurance Statement on Recommendation for Benchmark Plan. October 1, 2012.← Return to text
  19. Kentucky Affordable Insurance Exchange Grants Awards List.← Return to text
  20. Letter from HHS to Governor Beshear. December 14, 2012.← Return to text

Provided by the Henry J. Kaiser Family Foundation