Citing costs, Bevin has said he would shut down Kynect; actually, insurance companies pay for it; Medicaid is another matter

By Molly Burchett and Al Cross
Kentucky Health News

The governor's race between Democrat Jack Conway and Republican Matt Bevin will spotlight the Patient Protection and Affordable Care Act, an issue that affects all Kentuckians at least indirectly.

Conway, in his eighth year as attorney general, says he would have voted for the law. Bevin, who was the most conservative candidate in his primary, has said he would shut down the state's health-insurance exchange, Kynect, that was established under the law, because it will cost the state hundreds of millions of dollars.

Actually, Kynect is paid for by insurance companies that sell policies in Kentucky. Bevin appears to be referring to the projected cost of expanding Medicaid, another Obamacare-related move that Democratic Gov. Steve Beshear made at the same time he created Kynect. It raised the program's income limit to 138 percent of the federal poverty level, from 69 percent.

The federal government is paying the entire cost of the Medicaid expansion for the first three years. In 2017, the state will pay 3 percent, gradually rising to the law's cap of 10 percent in 2020. A study for the state projects that the expansion will pay for itself until 2021 by expanding health-care jobs and generating economic activity and tax revenue.

Bevin has scoffed at those projections. Conway has said the state needs to provide health coverage, but only what it can afford.

As Kentuckians, voters, and consumers of health insurance, you may be asking: What's going on with Obamacare in the state? Are we able to afford it? Who and what should we believe? While the cost of Medicaid expansion is debatable, it's becoming clear that Kynect has avoided the problems plaguing other state-run exchanges.

So far, the Centers for Medicare and Medicaid Services has dispensed more than $4.9 billion in grants to help launch state-run exchanges. Kentucky received $253 million for the initial planning and development phases of Kynect. Now its $28 million annual cost is covered by a fee on insurance companies, state officials say.

Despite federal support and their own revenue sources, many of the 17 state-based exchanges are expecting deficits this year and in the future. Many will continue to rely on leftover federal funds to pay for operations this year, report Darius Tahir and Paul Demko of Modern Healthcare. Hawaii announced this week that it would close its exchange and transfer clients to the federal exchange because of continued funding problems.

Kynect officials say it isn't having such problems because the state has ensured that Kynect is self-supporting through fees on insurance plans.

"The governor committed that the exchange would be self-supporting and would not rely on state General Fund dollars," said Jill Midkiff, spokeswoman for the Cabinet for Health and Family Services. "Kentucky’s sustainability plan employs an existing assessment on insurers that was previously used to fund Kentucky Access, the state’s high-risk pool, which was closed [since] individuals previously enrolled are now eligible to purchase a plan through Kynect."

But to transform Kentucky Access into Kynect, Beshear used executive orders that bypassed the General Assembly, where Republicans control the Senate. They have questioned his use of executive powers but generally have not been critical of Kynect.

The fee on insurers is a 1 percent, broad-based assessment on companies offering plans through the exchange. While insurers don't pass this fee directly to consumers, it almost certainly figures into their calculation of premium calculation and thus is indirectly paid by policyholders. The federal exchange is financed in a similar way, but its fee is 3.5 percent, meaning higher costs for insurers and policyholders.

In most cases, premiums for Kynect policies are reduced by a federal income-tax subsidy that is a key part of Obamacare.

"The vast majority of Kentuckians buying health insurance through Kynect are eligible for some kind of payment assistance or subsidy," Beshear said in commenting on most health-insurance companies recent requests for premium increases. "That cost will vary from family to family, so talking about rate changes in a vacuum isn’t a very effective way to gauge how much those rate fluctuations may affect policyholders or those shopping for insurance."

Bevin says he would move Kynect customers to the federal exchange, but the U.S. Supreme Court could rule this month that the tax subsidies are not supposed to be available through the federal exchange. The plaintiffs in the case cite a passage of the law that opponents say was a drafting error and does not make sense when the law is viewed as a whole.

If the court agrees with the plaintiffs, and Congress doesn't change the law, states using the federal exchanges will see spikes in insurance premiums, and millions of people could be at risk of losing their insurance. Bevin has not said what he would do in case of such a ruling.

Independent Drew Curtis is also running for governor.

Most insured through Kynect will pay more in 2016; Kentucky Health Cooperative seeks 25 percent increase

By Molly Burchett
Kentucky Health News

The federal health law requires that insurers planning to significantly increase premiums for policies on a health-insurance exchange to submit their rates by June 1 for review. Many insurance carriers across the country, including four in Kentucky, are requesting double-digit increases in insurance premiums for 2016.

For the individual market, the requested average rates from companies already participating in the Kynect exchange are:

• Anthem Health Plans, 14.6 percent increase;
• CareSource Kentucky, 11.8 percent increase;
• Humana Inc., 5.2 percent increase;
• Kentucky Health Cooperative, 25.1 percent increase;
• WellCare Health Plans, a 9.28 percent decrease.

The rates are not final, but are subject to approval by the state Department of Insurance, "so we don’t yet know what the final numbers will be," Gov. Steve Beshear said. "Changes still may occur. Rates should be finalized sometime in mid-July. We do expect that some plan rates will go down, some will go up and some will stay close to the same as last year."

Consumers will have more choices when enrollment opens, because the exchange is adding three new insurers to its individual market. United Healthcare will be offering coverage statewide, Aetna policies will be available in 10 counties, and Baptist Health Plan, now Bluegrass Family Health, will offer coverage in 79 counties. CareSource will expand its coverage area from 16 to 67 counties.

With these additions, at least three insurers will be offering Kynect coverage in every county, said Ronda Sloan of the Department of Insurance.

"When open enrollment begins this fall, Kentuckians should seek information about their individual plans, not average costs," Beshear said. "System-wide averages don’t give a good picture of what an individual’s out-of-pocket costs may be."

It is also important to keep in mind that premiums cannot be viewed in isolation, and you should look at the individual market dynamics that impact how much consumers pay for their health care coverage.

Why are most rates going up?

For an insurance company to survive, its cost of providing benefits should be less than the premiumums paid for those benefits. Companies now have had more than a full year of claims data to inform pricing structures, and many insurers are finding that people who buy policies on exchanges are considerably older and sicker than anticipated, reports Megan McArdle of Bloomberg News.

As a result, insurers are incurring greater costs of providing benefits than expected. Initially, the U.S. Department of Health and Human Services said that about 40 percent of the exchange policies should be bought by people between 18 and 35, the most healthy age group, to keep the exchanges financially stable. However, according to HHS data, that group accounted for only 28 percent of the policies in 2014 and 2015.

Not only do older people have more complex and more costly health needs, rising premiums in some state-based exchanges are due in part to the uncertainty in the overall health-insurance marketplace. First, there is much uncertainly about the reform law's "risk corridor program," which was designed to have insurers share the financial risk of offering policies on Obamacare exchanges from 2014 through 2016.

The program creates a pool of money to reduce risk for insurers: Those that pay out less in benefits than they collect in premiums pay into the pool; those whose premiums don't cover the cost of providing benefits take money from the pool. However, a recent Standard & Poor's report says the risk corridor will probably not get enough money from insurers with profitable exchange plans, so many insurers must raise premiums to support themselves.

Kentucky Health Cooperative needs shoring up

In another potentially worrisome sign, some insurers had risk-corridor receivables that exceeded half of their reported capital, and Kentucky Health Cooperative had the second-highest level of receivables as a percentage of capital: 117 percent, reports CNBC. That helps explain why it has asked for the largest average increase in premiums this year, 25 percent, and last year, 20 percent. The cooperative is one of several start-ups funded by the reform law to encourage competition in states; it sells most of the 106,000 private policies on Kynect.

Other reasons for the overall premium increases include rising health-care costs, especially for prescription drugs, Larry Levitt, senior vice president of the Kaiser Family Foundation, said on "PBS NewsHour" Wednesday night.

Speaking nationally, Levitt said state regulation means the requested premiums "will come down, in some cases by a lot." He said "Insurers are jockeying for position in these new marketplaces [so] there are some good deals to be had, but consumers really have to look around,"

David Blumenthal, president of The Commonwealth Fund, which researches health and social policy, said exchanges like Kynect "give people the ability to comparison-shop much more easily than before."

3,047 got private health insurance in special March-April signup designed to avoid or reduce tax penalty for not being covered

More than 3,000 Kentuckians signed up for health coverage during a special March-April enrollment period that allowed them to avoid or reduce tax penalties for being uninsured.

"At the Feb. 15 close of the 2015 open enrollment period, 158,685 individuals had enrolled in health care coverage through Kynect for 2015," a state press release said. "That number included 102,830 Kentuckians who have either newly enrolled in a qualified health plan since Nov. 15, 2014, or renewed the private insurance plan they purchased through Kynect last year."

With the additional 3,047 enrollments, the final enrollment in private health insurance was 105,877. The federal tax penalty for being uninsured in 2014 was $95 for each adult household member or 1 percent of income, whichever is greater. In 2015, it will be $325 for each adult or two percent of income, whichever is greater. Penalties for not insuring children are half those for adults.

“Given that the personal risks of not having health coverage are even greater than the penalties, we decided to continue a special enrollment period to allow those individuals more time to sign up,” Gov. Steve Beshear said in the release.

Those who took advantage of the special enrollment period will still owe a penalty for any months they were uninsured and did not qualify for an exemption in 2014 and 2015. "This special enrollment period was designed to allow such individuals the opportunity to get covered for the remainder of the year and avoid additional fees for 2015," the release said.

Kynect has an app for smartphones

Kentucky's state health benefits exchange, Kynect, is offering a free mobile app that will provide "on-the-go" access to the health-insurance marketplace.

The  smartphone app will allow you to log in to your account, browse plans, report changes in your circumstances, take photos of required verification documents and upload those photos directly to your account.

It can also help determine if you qualify for low-cost or free health coverage, get information about your coverage options, find out enrollment dates and learn how certain life events can qualify you to enroll now.

It allows you to log in to your Kentucky Online Gateway Account, look at the status of your health care plan or application, get more information about your current health care plan, access alerts, notifications or messages related to your account and view and update contact information.

And if you have further questions, it can connect you to an insurance agent or nearby "Kynector."

The app is available for download in the iTunes Store for Apple devices or in the Google Play Store for Android users.

Kynect opens special enrollment period March 2-April 30 to give people without health insurance a chance to avoid tax penalty

The state health-insurance exchange, Kynect, is reopening enrollment in March and April to allow signups by Kentuckians who discovered that not having health insurance means they have to pay a federal tax penalty.

“We believe that many Kentuckians did not realize those who do not obtain health coverage could face significant penalties when they file their taxes,” Gov. Steve Beshear said in a news release. And given that the personal risks of not having health coverage are even greater than the penalties, we have decided to continue a special enrollment period to allow those individuals more time to sign up.”

The penalty for not having health coverage last year is 1 percent of income, or $95 for each adult in the household and $47.50 for each child, whichever is greater. For 2015, the penalty will be 2 percent or $325 for each adult and $167.50 for each child.

"Individuals taking advantage of this special enrollment period will still owe a fee for any months they were uninsured and did not qualify for an exemption in 2014 and 2015," the news release warns. "This special enrollment period is designed to allow such individuals the opportunity to get covered for the remainder of the year and avoid additional fees for 2015."

If your household income is between 100 and 138 percent of the federal poverty level, which makes you eligible for expanded Medicaid, you will still be charged a penalty if you don't sign up. Medicaid enrollment is open year-round, but the special enrollment for private insurance will end April 30.

Visit https://kynect.ky.gov or call 1-855-4kynect (459-6328) to learn more.

Almost 103,000 Kentuckians now on private health insurance through Kynect, state says

More than 158,000 Kentuckians signed up for private health insurance or Medicaid coverage in the second round of open enrollment under the federal Patient Protection and Affordable Care Act.

The signup total of 158,685 as of Feb. 19 included almost 103,000 Kentuckians who renewed or bought private coverage. The state said the total broke down this way:

• 55,855 enrolled in Medicaid coverage (which is open year-round).
• 75,760 individuals renewed enrollment in private insurance.
• 27,070 individuals newly enrolled in private insurance.
• 6,009 individuals enrolled in dental plans.

“We had a tremendously successful second open enrollment period, with many new individuals signing up or continuing their health coverage through Kynect,” the state's health-insurance marketplace, Gov. Steve Beshear said in a news release. “When people get health insurance, they generally take immediate steps to get healthier, which will help our workforce get even stronger.”

Obamacare deadline is extended for those who had technical problems; state may also extend it for those facing a tax penalty

Were you unable to sign up for Kynect health insurance by the Sunday deadline because of technical problems? You now have until Feb. 28 to sign up. "And like other states and the federal government, Kentucky officials are also considering a 'special enrollment period' for those who find out at tax time that they’ll have to pay a penalty if they’re not insured," Laura Ungar reports for The Courier-Journal.

Kynect Executive Director Carrie Banahan said Kentuckians who experienced technical problems and believe they qualify for an extension should contact the Kynect call center at 855-459-6328. Ungar explains, "The Saturday outage of an Internal Revenue Service function for Obamacare enrollment prevented some people from getting their income verified so they could enroll on HealthCare.gov," the federal website used in most other states.

"Officials with the federal government and several other states said they saw a surge similar to what Kentucky experienced in the final days of enrollment — partly from people who realized for the first time they would face an IRS penalty at tax time," Ungar reports. The penalty for not having coverage in 2014 is 1 percent of annual household income, or $95 per adult and $47.50 per child, whichever is higher. Not having coverage in 2015 will incur a penalty of 2 percent, or $325 per adult or $167.50 per child, whichever is more.

Thousands of Kentuckians face federal tax penalty for not having health insurance

"Thousands of Kentuckians might face a penalty this tax season for failing to sign up for health insurance during 2014," Mary Meehan reports for the Lexington Herald-Leader.

The state estimated that 340,000 Kentuckians would buy private insurance through its Kynect marketplace, but only 80,000 have done so. However, Meehan writes, some of those who did "might have qualified for Medicaid under the state's expanded income guidelines, said Carrie Banahan, who heads Kynect."

Jill Midkiff, spokesman for the state Cabinet for Health and Family Services, told Meehan, "There are too many variables at play here to do simple arithmetic for estimated populations. It would be safe to say that thousands of Kentuckians will likely face a tax penalty this year for not obtaining health insurance."

Banahan said, "A lot of people are going to be very surprised." And that will include some people who were eligible for Medicaid, but didn't enroll in it. Medicaid enrollment is open year-round, but private-insurance enrollment closes Sunday, Feb. 15 and won't reopen until next fall unless someone has a life-changing event "such as a birth, divorce or loss of a job," Meehan notes.

"The penalty for not having insurance during 2014 is $95 for each person in a household or 1 percent of the household income, whichever is higher," Meehan notes. "The bill will come due when 2014 taxes are filed, she said. If a person is due a refund, it will be deducted from the tax refund." Next year, the penalty will be 2 percent, with a minimum of $325 per adult or $162.50 per child, under provisions of the Patient Protection and Affordable Care Act.

Feb. 15 is deadline to get health insurance; those who don't can be penalized up to 2 percent of their annual income

Sunday, Feb. 15 at 11:59 p.m. is the deadline to buy private, subsidized health insurance through Kynect, the state-run marketplace created under federal health reform.

If your annual income is above the federal poverty level and you don't buy a policy or enroll in Medicaid, and don't qualify for one of several narrow exceptions, you will be subject to a tax penalty from the Internal Revenue Service. (You may qualify for Medicaid if your income is less than 138 percent of the poverty level; Medicaid enrollment is open year-round.)

The penalty is $325 per person or 2 percent of household income, whichever is greater. "In many cases, this penalty could exceed the annual cost of insurance," the release said, giving these examples using "bronze" plans (the cheapest alternative, which has high deductibles):

• A 30-year-old in Lexington making $20,000 would qualify for a subsidy and pay $37.44 for a full year of bronze coverage, or pay a $400 penalty and remain uninsured
• A 25-year-old in Louisville making $40,000 would qualify for a subsidy and pay $604.08 for a full year of bronze coverage, or pay an $800 penalty and remain uninsured.

“Not only is insurance important for your physical health, it also makes financial sense,” Kynect Executive Director Carrie Banahan said in the release. “Why risk the possibility of being uninsured and facing a costly medical procedure and a tax penalty, especially when you may qualify for financial assistance to defray some of your premium cost? Don’t wait. Visit Kynect and enroll in healthcare coverage today.”

Private insurance on Kynect is subsidized by an advanced premium tax credit. Those who qualified for the credit will receive a 1095-A tax form, which provides information to help fill out Form 8962 as part of their federal tax returns. Individuals with questions about their Form 1095-A can call a special Kynect hotline at 1-844-373-2417. More information is available at kynect.ky.gov.

People on Medicaid, Medicare, the Kentucky Children's Health Insurance Program, catastrophic health insurance or insurance through an employer or other agency do not need Form 1095-A to file their federal taxes.

Kynect private-insurance enrollment runs through Feb. 15; exchange works to get taxpayers information to prove coverage

With the close of open enrollment coming Feb. 15, state officials are making a final push to get Kentuckians to enroll in Medicaid or buy private, subsidized health insurance on the state's health benefits exchange, Kynect.

The federal health reform law requires most people to have health insurance or pay a penalty, and Kynect says it is working to help Kentuckians get the information they need to prove coverage when they file their tax returns.

Outreach events continue at several campuses in the Kentucky Community and Technical College System. Events are open to the general public and will feature "Kynectors" who answer questions and help people find a plan that fits their needs and budgets. Tthe remaining events will be at:

• Bluegrass Community and Technical College, Leestown and Newtown campuses, 10 a.m.–2 p.m., Feb. 2 and 3.
• Jefferson Community and Technical College, downtown Louisville campus, 10 a.m.–2 p.m., Feb. 4 and 5.
• Gateway Community and Technical College, Covington campus (Two Rivers Building), 10 a.m.–2 p.m., Feb. 9 and 10.
• Gateway Community and Technical College, Boone County campus, 10 a.m.–2 p.m., Feb. 11 and 12.

As of 3:30 p.m. Jan. 29, 50,754 new applications for coverage had been submitted to Kynect; 43,181 people had been newly enrolled in Medicaid; 75,760 people had renewed their private insurance; 18,533 had newly enrolled in a private plan; and 4,914 individuals had enrolled in dental plans.

Kynect Director Carrie Banahan said, “If you or anyone you know remains without health insurance the time to enroll in coverage through Kynect is now. Please don’t delay. Enroll as soon as possible.”

Those who need health insurance are encouraged to log on to www.Kynect.ky.gov, call 1-855-4kynect (459-6328), or contact an insurance agent or Kynector before the Feb. 15 deadline. Medicaid enrollment is open year-round.

Taxpayers, take note

Individuals who qualified for an advanced premium tax credit, or subsidy, through Kynect will receive a 1095-A tax form in the mail. The form provides information for individuals and families who received payment assistance to help them fill out IRS Form 8962 as part of their federal return.

"Kynect has instituted a robust training and information program to help individuals, Kynectors, insurance agents and tax preparers understand the requirements," a state press release said. "Individuals with questions about their Form 1095-A may also call a special Kynect hotline at 1-844-373-2417.

Individuals with Medicaid, KCHIP, Medicare, catastrophic health insurance or insurance through an employer or other agency do not need Form 1095-A to file their federal income taxes. 

Regan Hunt, executive director of Kentucky Voices for Health, named national Consumer Health Advocate of the Year

Regan Hunt

Regan Hunt, the executive director of Kentucky Voices for Health, has been named Consumer Health Advocate of the Year by Families USA, which calls itself "the national organization for health-care consumers." KVH is a group of organizations and individuals working to improve health and coverage for Kentuckians, and was organized in response to the federal health-reform law. It includes groups that lobby, but it does not lobby.

The award is given to individuals who have made exceptional contributions in the effort to help our nation's health care consumers. Hunt received the award to "recognize and honor her leadership in the expansion of Medicaid in Kentucky, her efforts to bolster health coverage under the Affordable Care Act and her steadfast commitment to building a healthier Kentucky," Nicole Nash reports in a KVH press release.

"Regan is a one-of-a-kind advocate who led the way on Medicaid expansion and health coverage enrollment in the Bluegrass State," Ron Pollack, executive director of Families USA, said. "Thanks to Regan's tireless efforts, thousands of Kentuckians have access to health care. The diverse coalition she has mobilized will continue to benefit Kentucky residents for years to come." (Read more)

Penalty for those without health insurance in 2015 will be significantly higher than for 2014; Feb. 15 is deadline to sign up

Wall Street Journal photo illustration

One aspect of the Patient Protection and Affordable Care Act supporters don't spend much time talking about is the part of the law that imposes a penalty on those who don't have insurance, but the time has come for the uninsured to pay up.

This is the first year taxpayers are required to report to the Internal Revenue Service whether they have health insurance, and charged a fine if they don't, as required by the federal health care law.

This year's fine is $95 per adult or 1 percent of the household income, whichever is greater. This fine will increase significantly in 2015 to $325 per adult or 2 percent of household income, whichever is greater. And will increase again in 2016 to $695 per adult or 2.5 percent of income, whichever is greater.

Dayna Dayson of Phoenix, Ariz., estimates that she’ll have to pay $290 in fines this year when she files her federal return, Ricardo Alonso-Zaldivar reports for The Associated Press. Dayson, who’s in her early 30s and works in marketing, said she would like to have health insurance, as required by the law, but can't afford it.

“It’s touted as this amazing thing, but right now, for me, it doesn't fit into my budget,” she told AP.

It is too late to avoid this year's penalty, unless you qualify for one of about 30 exemptions, most of which are related to financial hardships, Alonso-Zaldivar notes, but you can avoid a penalty next year if you sign up for health coverage by Feb. 15, the last day of open enrollment.

Kentuckians can sign up for health insurance through Kynect, the state's health insurance exchange. Jan. 15 is the deadline to get covered by Feb. 1 and those who sign up by Feb. 15, the final enrollment deadline for 2015, will get coverage beginning March 1. Medicaid enrollment is open year-round.

"Roughly 4 million uninsured people will pay penalties and 26 million will qualify for exemptions from the list of more than 30 waivers," H&R Block says in a congressional analysis, Alonso-Zaldivar reports.

One reason many of the uninsured will end up paying a 2015 fine is that they don't know about the larger fine or the sign-up deadline to avoid this penalty.

Only 3 percent of uninsured people know what the fine for 2015 will be, according to a recent poll by the Kaiser Family Foundation. And just 5 percent of uninsured people know the correct deadline, according to a Kaiser poll, Alonso-Zaldivar reports.

“We could be looking at a real train wreck after Feb. 15,” Stan Dorn, a health policy expert at the nonpartisan Urban Institute, told AP. “People will file their tax returns and learn they are subject to a much larger penalty for 2015, and they can do absolutely nothing to avoid that.”

Alonso-Zaldivar suggests one reason people don't know about the penalties could be because they are the "most unpopular part of the health care law" and supporters have "played down the penalties in their sign-up campaigns" to avoid "political backlash."

If you are interested in estimating your potential fine or seeing if you qualify for an exemption, Alonso-Zaldivar suggest going online and using the Tax Policy Center’s Affordable Care Act penalty calculator or using a free online tool called “Exemption Check" created by TurboTax.

While many, like Dayson, find paying for health insurance "doesn't fit into the budget," one way to save money when choosing a plan is to make sure you choose a plan with the best deductible option for your family, Michelle Andrews reports for Kaiser Health News.

Typical plans have a single out-of-pocket deductible that must be met for the entire family before insurance will start paying. But some plans offer both a total family deductible and a separate deductible for each family member. For example, a $3,000 deductible family plan might have separate $1,000 deductibles for each family member, Andrews reports.

This type of plan is a good option if one family member requires more medical care than the others over the course of the year, Sabrina Corlette, project director at Georgetown University's Center on Health Insurance Reforms, told Andrews.

This plan allows the insurance company to start paying for all of this one family member's medical bills after their embedded-individual-deductible is met, even if the family has not reached its total out-of pocket payment, Andrews writes.

You might have to call the plan directly to see if it offers this type of deductible, Corlette said.

Only 1/4 of estimated number eligible for subsidized, private health insurance through Kynect have signed up for it

While 85,000 people are covered by private health plans through Kynect, that's only one-fourth of the 340,000 that state officials estimated would be able to buy subsidized coverage through the state insurance exchange. That "underscores some of the challenges" of the federal health-reform law, Abby Goodnough reports for The New York Times, in the latest of series of stories using Kentucky as a bellwether for Obamacare.

"People earning between 138 and 400 percent of the poverty level — between about $16,000 and $47,000 for a single person — can get subsidies to help with the cost," Goodnough explains. "Even with that incentive, only about 76,000 Kentuckians signed up for these plans in 2014 and have renewed the coverage for next year. Since the enrollment period for 2015 began on Nov. 15, an additional 9,000 people have selected exchange plans."

2015 is the first year taxpayers will have to report on tax returns whether they had health insurance in the prior year. Unless they qualify for one of about 30 exemptions, mostly involving financial hardships, the health-reform law requires them to pay a penalty: $95 per adult and $47.50 per child, or 1 percent of the family’s modified adjusted gross income that is over the threshold the requires it to file a tax return. The penalties will increase next year, but for most people will remain below the cost of insurance, so many are expected to pay a penalty.

Kentucky is considered one of 13 states where people in the individual insurance market are better off under Obamacare than they were before, and compares well with other states, so why are so few getting coverage? "National polls have found that many people simply consider the exchange plans unaffordable, even with subsidies," Goodnough notes. Several thousand Kentuckians signed up for coverage but didn't pay the premiums.

David Elson gets dialysis. (NYT photo by William DeShazer)

One was David Elson, who "decided he could not afford the $350 monthly premium for a plan that included his doctors," Goodnough reports. "His poor health got worse, and in October, he landed in the hospital with end-stage kidney disease."

That enabled him to get special Medicare coverage for dialysis. But Elson, 61, of Louisville, told Goodnough, “The president gets up there and says, ‘We’ve got to get affordable health care for our people. It’s not.”

While Kentucky's private-plan enrollment is probably more modest than most states because it has more people living in near-poverty, the unwillingness of the near-poor to spend money on health insurance — something many of them have never or rarely done — may be the greatest long-term challenge to the new health-insurance system.

"Supporters say the private insurance exchanges will need robust business, including young and healthy customers that help balance the cost of sicker ones, to thrive," Goodnough notes. But her story also looks at people like Amanda Mayhew, 38, of Louisville, whose income is low enough for her to get free Medicaid coverage: "She has been to the dentist five times to begin salvaging her neglected teeth, has had a dermatologist remove a mole and has gotten medication for her depression."

Kentucky Health Cooperative, largest private provider on state insurance exchange, gets $65 million loan to keep going

The Kentucky Health Cooperative, a non-profit, consumer-governed health insurance company, received a $65 million federal loan last month to keep it afloat just days before the second open-enrollment period began, reports Adam Beam of The Associated Press.

The cooperative received the loan from the Centers for Medicare & Medicaid Services on Nov. 10, five days before Kentuckians resumed purchasing private health plans on Kynect, the state health-insurance exchange.

Republican U.S. Sen. Mitch McConnell claimed the loan "raises serious questions" about federal health reform in Kentucky, Beam reports. "If Obamacare were really such a success story in Kentucky, why did this co-op need a taxpayer bailout?" asked McConnell, the incoming Senate majority leader. "Even more disconcerting, why was that bailout kept a secret from the very people who were about to enroll in it?"

CMS officials told Beam they waited until all the loans to state-based health cooperatives had been awarded before announcing them. These loans are competitive and must be applied for. The officials said it is not uncommon for nonprofit co-ops to receive "solvency loans" from the federal government because these new insurers need help meeting their cash requirements.

"To date, co-ops in seven other states have received more than $355 million in additional solvency loans, according to the CMS website. Co-ops have 15 years to repay the loans, with interest, to the federal government," Beam writes.

The first federal loans for the Kentucky Health Cooperative were based on how many customers it expected to have. The co-op predicted it would have about 30,000 customers, but has 57,000, Janie Miller, its chief executive officer, told Beam: "Therefore we needed additional capital sitting there from which we would, of course, pay claims."

The Kentucky Health Cooperative sold three-fourths of the qualified health plans sold on the exchange in the first round of enrollment.

Since enrollment reopened Nov. 15, more than 9,200 people have used it to purchase a private health insurance plan. Of those, more than 6,000 qualified for a federal discount on their premiums. Another 75,700 people have renewed the private health insurance they purchased last year.

The Kentucky Health Cooperative received a federal loan to expand into West Virginia this year, but concerns about its infrastructure not being ready to handle the demands of the state has since delayed the launch for one year, until Jan. 1, 2016, Lydia Nuzum reports for The Charleston Gazette.

Dec. 15 is deadline for Jan. 1 Kynect coverage; final deadline in second open enrollment is Feb. 15

Kentuckians can sign up for coverage under the Patient Protection and Affordable Care Act through Kynect, Kentucky's health insurance exchange, through Feb. 15. But to be covered on Jan. 1, you must sign up by Dec. 15.

Coverage for those who miss the Dec. 15 deadline and sign up between Dec. 16 and Jan. 15, will begin on Feb. 1. Those who enroll between Jan. 15 and the Feb. 15 deadline will have a March 1 effective date.

Nearly 18,000 new applications have been filed since open enrollment began Nov. 15, with more expected to sign up in the coming days, state officials told Chris Kenning of The Courier-Journal. It has not yet been determined how many of these applicants were for Medicaid and how many were for private plans.

This year, the penalty for not having coverage in 2015 will rise from $95 per adult, or 1 percent of household income, to $325 per adult or 2 percent of household income, whichever is greater.

And if you are one of the 80,000 Kentuckians who purchased private plans last year that will be automatically re-enrolled, changes in subsidies and premium amounts may cause an increase in your plan cost so it is important for this group to re-evaluate their plans this year, Kenning writes.

 "You could get a bigger subsidy, a lower monthly cost, or more network options if you shop again,"  Carrie Banahan, executive director of Kynect, told Kenning.

Officials estimate 290,000 Kentuckians are potentially eligible for subsidies with the Affordable Care Act, Kenning reports. Subsides are based on income, but are capped at $46,680 for individuals and $95,400 for a family of four.

He offers these examples of how subsidies might work: a 35-year-old single parent of two who earns $35,000 per year could get a monthly subsidy of $240; or a retired couple with $50,000 in income could get a $526 monthly subsidy.

To examine Kynect options, visit https://kynect.ky.gov or call 1-855-4kynect (459-6328)

Kynect enrollment for private, subsidized insurance reopens; previous enrollees should check website and re-enroll

By Molly Burchett
Kentucky Health News

The Patient Protection and Affordable Care Act's second annual open enrollment period has started and brings with it many changes.

Kentuckians can use Kynect, the state’s health insurance exchange, to purchase their plans. They can also use Kynect to sign up for Medicaid, if they qualify. During the first open enrollment period under the 2010 federal law, more than 521,000 people obtained coverage through Kynect.

About 85,000 of them purchased private insurance plans, and most of those received a federal subsidy. The rest were added to Medicaid, the government health insurance program for the poor and disabled.

People who have been added to Medicaid do not need to sign up again, but should report income changes to the managed-care organization that handles their coverage. They can change their MCO until Dec. 12.

Even those who purchased plans through Kynect last year should re-enroll and consider purchasing a different plan this year because plans have changed, new plans are being offered and there have been changes in the factors used to calculate premiums and subsidies. The penalty for individuals without health coverage in 2015 will be $325 per adult or 2 percent of household income, whichever is greater. That's going to be more of sting than this year's $95-or-1 percent penalty.

Health plans will send a new tax document, IRS Form 1095-B, to policyholders to document 2014 coverage. While some exemptions are available for a short lapse of coverage up to 3 months, most taxpayers without coverage must pay the 2014 penalty and will get a taste of the higher penalties to come.

Plans on Kynect still vary widely. In addition to comparing premiums, it is important to consider deductibles, co-payments and other plan details. Kynect offers four basic types, labeled bronze, silver, gold and platinum. Bronze plans have the lowest premiums but have the highest deductible. As you move up the plan spectrum to platinum, your premiums increase and your deductibles decrease. The exchange also offers people under 30 a plan that provides only catastrophic coverage with a very high deductible and no subsidy.

Expect premium and plan changes

Premium increases in 2015 are likely for most Kentuckians, but some premiums could decline slightly. Rate filings indicate plans with Kentucky Health Cooperative could increase an average of 20 percent, while plans with Humana could increase an average of 12.8 percent. The tax-credit subsidy available to people with incomes between 100 and 400 percent of the federal poverty level ($11,670 to $46,680 for an individual) reduced the effect of premium increases.

Buyers should be watch for changes in plans because subsidies are based on the second-lowest-cost plan, silver, and many of these plans have changed in 2015. When that happens, people may face substantial premium increases unless they take the time to shop and make sure they’re still in a low-cost plan.

Fortunately, this year the actual cost of health insurance this year will be displayed on Kynect, giving insurance-browsers both the basic premium cost and the subsidy before completing an application. Enrollees can also complete a preliminary eligibility determination to see if they qualify for Medicaid or a subsidy.

Check premium and subsidy estimates

Two types of subsidies are available. The premium tax credit can be taken in two ways: You can apply it to monthly payments, or take it when you file your tax return. The other type of subsidy, cost-sharing, is designed to minimize enrollees’ out-of-pocket costs when they go to the doctor or have a hospital stay.df

INCOME LIMITS FOR TAX-CREDIT SUBSIDIES

Lower-income families get the most help. You may qualify for payment assistance if your employer does not offer health insurance, you do not receive Medicare, or your family does not make more than the yearly income listed in the chart to the right. Click here for more information.

Let's consider the coverage eligibility of a man we will call John Smith to see how plans coverage differ from his options for 2014 plans. The individual market in Floyd County was limited to two companies in 2014, Anthem Blue Cross and the non-profit Kentucky Health Cooperative; Humana wasn't (and still isn't) offering individual coverage there. John could chose varying levels of plans, and based on the plan type, his premiums ranged from $182 (bronze) to $421 (platinum), with deductibles ranging from $6,300 (bronze) to $500 (platinum).

In 2015, John can still only chose between Anthem and the co-op. His premium options range from $204 (KHC-bronze) to $426 (Anthem-gold), with deductibles ranging from $5,750 (Anthem-bronze) to $1,000 (KHC and Anthem-platinum). However, be careful to watch out for high out-of-pocket costs, which for most bronze and silver plans, are $6,600 per person in 2015.

The estimated monthly premiums in the chart are the full price before any payment assistance. the total premium for the plan John wanted was estimated to be $415.48, but his income qualified him for a 47 percent subsidy. Using Kynect's Health Plan Savings Calculator, John's estimated actual cost is $220.80. The Kynect website will provide estimates of premiums and assistance, but the actual amount can't be determined until you complete a full application.

Important dates to remember

There are several key dates for you to keep in mind during this enrollment period, which is shorter than the first one:

• Nov. 15: second open enrollment period began 
• Dec. 15: Consumers must select a plan for coverage to begin by Jan. 1. Currently enrolled consumers must renew coverage and application for financial system. If they fail to do so, current coverage and tax credits may be automatically renewed. (See below.)
• Feb. 15: Last say of open enrollment period. Those consumers who select a plan on this date will begin new coverage March 1. Medicaid enrollment is open year-round. 
• April 15: Deadline for filing tax returns, on which taxpayers must indicate coverage in 2014 or face a penalty. Consumers who got tax-credit subsidies in 2014 must file a tax return.

Here is a new and crucial change: If you're already enrolled in a Kynect plan in 2014 and do nothing during open enrollment before December 15, 2014, you will be automatically re-enrolled in an existing plan for next year with your existing premium tax credit.

However, consumer advocates say doing nothing could be costly. If you have experienced changes in income or other circumstances that could affect your tax credit, you risk receiving the wrong amount and may have to pay back next year. Changes in the benchmark silver plans could lead to higher costs for some consumers. Even if the premium of a particular plan may go down, the decrease in the tax credit could be even more, resulting in a net increase, so consumers should pay particular attention to these changes.

Before the tax-filing deadline on April 15, consumers must use IRS Form 8962 to reconcile their estimated premium tax credit with the final premium tax credit eligibility. Consumers who overestimated their income may receive a tax refund, but those who underestimated it may have to repay some of all of the difference.

Those who miss the enrollment deadline may still qualify for special enrollment period if they experience what the law calls "life changing events," such as moving or losing your job.

Additional changes to Kynect include an enhanced website, more call center agents, expanded call-center hours, a Kynect storefront at Fayette Mall in Lexington, and a Kynect app for Apple and Android smartphones that allows users to access their Kynect account, see details of their plan and submit photos of documents for verification.

For more information, call 1-855-459-6328 or go to www.kynect.ky.gov.

Most Kentuckians who bought health insurance on Kynect will pay higher premiums next year

Most premiums for private health insurance purchased through Kentucky's health insurance exchange, Kynect, will increase in 2015.

Most of the people who have used Kynect have been added to Medicaid, the government health insurance program for the poor and disabled. Only about 85,000 Kentuckians used the site to purchase private plans.

Health insurance companies have filed their rate requests for 2015, and the state Department of Insurance has approved most of them, reports Adam Beam of The Associated Press.

Officials have approved a 15 percent average rate increase for the Kentucky Health Cooperative, which sold 75 percent of private plans on the exchange.

Humana and Anthem Blue Cross Blue Shield each sold 12.5 percent of the private plans on Kynect. Humana's premiums will rose an average of 12.8 percent, but rates for Anthem will go down an average of 4.3 percent, Beam reports. Rates apparently have not been set for two new companies that will join the exchange, CareSource and WellCare.

"Rates off the exchange are increasing, too, in both the small group and individual markets," writes Beam. For example, Time Insurance Co.'s individual rates will go up an average of 15 percent, and the small group rates for Time, Bluegrass Family Health and John Alden Life Insurance Co. will rise an average of 5 percent.

Department of Insurance spokeswoman Ronda Sloan told Beam that rates for large group plans were not available yet. The rate certification process will be finalized before open enrollment, which begins on November 15, 2014 and runs through February 15, 2015.

The averages can be misleading because that Kynect offers approximately 70,000 different rates, which vary depending on numerous variables, such as the type of plan, where people live, how old they are and whether they smoke.

Kynect was one of the few online health insurance portals that actually functioned when Obamacare launched a year ago. An estimated 521,000 Kentuckians have obtained insurance through the website, reducing the state's uninsured rate from 20 percent to 12 percent, Democratic Gov. Steve Beshear said in a recent video update.

Beshear said this sharp reduction in the uninsured proves that Kynect is working. Republicans say higher insurance premiums and difficulty finding doctors prove it isn't.

Obamacare seems to be no plus for Kentucky Democrats, perhaps mainly because of the word's first three syllables

Though the federal health-reform law has helped cover more than half a million Kentuckians and cut the state's uninsured population by half, "there is little evidence it will help" Kentucky Democrats in the Nov. 4 elections, reports Abby Goodnough of The New York Times, who has been following Obamacare's implementation in the state.

“The campaign by the Affordable Care Act’s critics against it has been very effective in demonizing the phrase Obamacare and anything to do with the president,” Democratic Gov. Steve Beshear told Goodnough. “So I think you find a reluctance on the part of people, even though the law is benefiting them, to publicly acknowledge it.” Beshear noted that President Obama is highly unpopular in the state, and Goodnough notes that no one applauded during the six minutes that he spoke about the law at the Kentucky Farm Bureau's Country Ham Breakfast at the state fair last month.

Interest groups and Republican candidates in Kentucky "have run more than 10,000 broadcast television spots here since January 2013 that mention the law in a negative way, according to Kantar Media’s Campaign Media Analysis Group," Goonough reports. "Kantar found only one positive television ad, from Elisabeth Jensen, the Democrat challenging Rep. Andy Barr in the state’s Sixth Congressional District."

Many Democrats have urged their nominee for the U.S. Senate, Secretary of State Alison Lundergan Grimes, to use the issue, but "far from flaunting Kentucky’s strong enrollment numbers, Democratic candidates — most notably Ms. Grimes — have remained reticent about the law, even its successes."

Republican Sen. Mitch McConnell's re-election campaign hasn't run any advertising lately about the law, but still calls it the worst legislation in American history and says he wants it repealed "root and branch." But he has yet to explain, if that unlikely event happened, what would happen to the state exchange where more than 521,000 people got on Medicaid or bought private insurance policies.

Goodnough says McConnell has "hedged" on that, and links to an earlier story by her Times colleague, Jonathan Martin, who wrote: "When I pressed him about the politics of taking away Medicaid from those individuals that now have it, he suggested that was unlikely – even while still faulting Beshear for the decision. 'I don’t know that it will be taken away from them,' McConnell said of the expanded Medicaid coverage. Speaking about Beshear and Kentucky’s state government, he added: 'They’ve made the decision to expand it; they’re gonna have to pay for it.'"

Ky. neck-and-neck with Ark. for largest drop in percentage of uninsured; Kynect and Medicaid expansion make the difference

By Melissa Patrick
Kentucky Health News

Kentucky is finally near the top of a good list about health. It's neck-and-neck with Arkansas for the greatest drop in the percentage of uninsured adults since the federal health-care reform law's requirement to have insurance took effect in January, according to a recent Gallup-Healthways Well-Being Index poll.

Kentucky decreased its estimated share of uninsured by 8.5 percentage points between 2013 and midyear 2014, going from 20.4 percent in 2013 to 11.9 percent now. That was a 42 percent drop in the percentage of the state population that is uninsured. Arkansas' percentage-point drop was larger, but the results were within the polls' error margins.

Ky. error margins: 2013, plus/minus 1.8 percentage pts.; 2014, +/- 2.1 pts. Ark.: +/- 2.2 and +/- 2.4.

The poll found that states that expanded Medicaid and established a state-based marketplace or a state-federal partnerships showed the largest drop in the uninsured. Kentucky has participated in both of these measures with Kynect, its statewide health insurance marketplace, and its expansion of Medicaid to households with annual incomes up to 138 percent of the federal poverty level.

County-by-county estimates on Kynect Medicaid and private insurance through Kynect are at http://governor.ky.gov/healthierky/Documents/kynect/20140410_kynectEnrollmentData.pdf.

The gap between states that implemented these measures and those that did not nearly doubled between 2013 and midyear 2014, with the uninsured rate declining an average of 4 points in the 21 states that have implemented both measures, compared with a 2.2-point drop in the 29 states that have implemented one or neither.

The latest state figures show that 512,000 Kentuckians are newly enrolled in health coverage, with nearly three out of four of them under the Medicaid expansion.

Medicaid Commissioner Lawrence Kissner illustrated the dramatic impact of the expansion in Kentucky at a recent legislative committee meeting with county-by-county maps that show the estimated percentage of uninsured in each county in 2012 and this year.

The national poll results are based on both cellular and land-line telephone interviews of a random sample of 178,000 adults living in all 50 U.S. states during 2013, and 88,678 respondents between Jan. 2 and June 30, 2014.

Beshear says that even if Republicans take over, they won't be willing or able to reverse his Medicaid expansion

By Al Cross
Kentucky Health News

Democratic Gov. Steve Beshear may be succeeded by a Republican next year, and the state legislature may even sooner be controlled by Republicans who have objected to his expansion of Medicaid, but he says they won't be willing or able to reduce or eliminate the coverage or the subsidies for private insurance under the federal health-reform law.

"We now have 421,000 Kentuckians who are also voters signed up for the law and liking what they are getting," Beshear told BBC reporter Claire Bolderson. He said Republicans "want to be critical of the president and his administration, but at the same time they want those 421,000 votes, so they're not going to take away that coverage from those folks."

State Senate President Robert Stivers, R-Manchester, "unlike many of his Republican colleagues in Kentucky and Washington . . . is not calling for outright repeal of Obamacare," the BBC reports, quoting him: "What we are looking for is a reasonable alternative.".

"That includes rolling back the expanded Medicaid coverage and subsidies, and eliminating all the mandates," Bolderson reports.

Stivers claimed that "They've caused more people to lose their insurance than they helped gain," but that is not true, even if those who had to get more expensive policies are counted as losing their insurance.

Agriculture Commissioner James Comer, who is expected to enter the Republican primary for governor soon, indicated at a Kentucky Chamber of Commerce forum Tuesday that he expects to pay for Beshear's expansion of Medicaid if elected.

"We're going to have to not point the finger. If it's not repealed in the next year, we're going to have to pay for it," he said. If so, he said, eligibility criteria should be tightened and "We need to privatize every service we can possibly privatize" and reduce the state workforce to get the money.

Former Louisville Metro Councilman Hal Heiner, who is already in the primary, didn't address Medicaid in detail but said the state should seek federal waivers to create incentives for healthier behavior by Medicaid recipients. He and Comer both said they did not accept studies cited by Beshear which predicted that expansion of the program would create so many jobs in health care and so much more tax revenue that the expansion would pay for itself.

Attorney General Jack Conway, the only announced Democratic candidate, pulled out of the forum a few days before it. Democrat Adam Edelen, who passed up the governor's race to run for re-election as auditor, indicated more faith in the studies, saying that in the long term it is better to have people insured than not, to improve the state's health.