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Feds award Kentucky $183 million for health benefit exchange

January 17, 2013 | | Comments 1

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — The federal government announced Thursday that Kentucky was one of four states to receive a multi-year grant to help pay for the operation of a health benefit exchange, a controversial requirement of the federal Patient Protection and Affordable Care Act.

Kentucky will receive $183 million to go toward information systems needed for the health benefit exchange, which is scheduled to go live in January 2014. Health benefit exchanges are online marketplaces for people to purchase insurance plans.

Republicans in Kentucky have tried unsuccessfully to block creation of the exchange, saying it would be too costly for the impoverished state to operate. Even with the help of federal grants, Kentucky will eventually have to pick up the tab, Republicans have said.

However, officials in Democratic Gov. Steve Beshear’s administration said the exchange will not need state money because insurance companies will pay for it through taxes and there will be money available through the tobacco settlement. The funding announced Thursday will cover expenses for the exchange until Dec. 31. 2014.

Beshear created the exchange by executive order in July. The legislature will consider giving permanent approval for the exchange during this year’s legislative session, which resumes on Feb. 5. If the exchange is not approved by the legislature, Beshear could sign another executive order which would keep it on track to open in 2014.

According to a news release from the U.S. Department of Health and Human Services, Kentucky is one of 11 states to receive additional federal grant money to pay for the operational costs of an exchange.

In addition to the $183 million, Kentucky has already received four grants totaling more than $70 million for planning and initial costs to start the exchange, according to the Centers for Medicare and Medicaid Services.

Filed Under: KY General AssemblySocial ServicesState BudgetState GovernmentSteve Beshear

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  1. Shelia Chang says:

    Where and how will these individuals comply with the individual mandate or the requirement to buy insurance or pay a penalty? Kentucky is one of the first states to start work on the development of a health insurance exchange. Executive Director Carrie Banahan and Deputy Director Bill Nold of the Office of Kentucky Health Benefit Exchange describe Kentucky’s exchange as “like Travelocity but for health insurance.” The ACA introduced the concept of health insurance exchanges to create a competitive marketplace where individuals and employees of small businesses can shop for health insurance based on price and quality. The insurance that is sold over the internet exchange will have to provide a set of “essential health benefits” if approved for sale. These benefits are a comprehensive package of services that must be included, which are designated by federal regulation. These services include things like maternity and newborn care, ambulatory patient services, chronic disease management, and many others. Kentucky’s Office of Health Benefit Exchange has recommended that the Anthem Preferred Provider Organization Plan serve as a model for all the other plans that participate on the exchange. Consumers will also have the opportunity to purchase federal health insurance products that are offered nationally.