By Ronnie Ellis
CNHI News Service
Likely all anyone has heard in recent days about the Affordable Care Act or “Obamacare” has been the effort by some Washington Republicans to defund the law before it’s implemented.
But the executive director of the Kentucky Health Benefit Exchange, an online shopping site where Kentucky residents and some small companies can compare insurance costs and buy coverage, said the new law will begin to take effect in Kentucky on Tuesday.
And some state lawmakers — though not all — are “pleasantly surprised” by the new insurance rates which will be available on the Kentucky exchange, called “kynect.”
Carrie Banahan told the Interim Joint Appropriations and Revenue Committee on Thursday that kynect will allow individuals and employees of small businesses to shop for health insurance and compare coverage and costs. Small businesses with 50 or fewer employees may also shop for insurance on the exchange.
Individuals whose incomes fall between 138 percent and 400 percent of the federal poverty level can qualify for subsidies while those who make less than 138 percent can now qualify for Medicaid.
Consumers may choose among plans with varying premium prices and deductibles with generally higher premiums for lower deductibles. But all the plans offer “essential health benefits,” including some usually not offered by private insurers before passage of the law.
Banahan provided several examples of what individuals of various incomes might be expected to pay.
For instance, a healthy single woman in her twenties might pay as little as $51 per month but would have a deductible of $6,300. The actual premium price would be $127 per month, but with an income of $20,000 a year from a part-time job, she would qualify for a federal subsidy of $76 per month, lowering her cost to $51.
If the same woman wished to lower her deductible to as little as $1,000, her monthly premium would increase to $112 per month after receiving a federal subsidy.
A family of four with a family income of $70,000 would see a premium of $501 per month but would pay only $403 a month after subsidies. They would have a $12,600 deductible. If the family wished to lower its deductible to $2,000, their monthly premium, after subsidies, would be $614.
Those rates impressed some Democratic lawmakers and maybe even a Republican or so.
“I’m pleasantly surprised at the premiums,” said Rep. Jimmie Lee, D-Elizabethtown.
Sen. Gerald Neal, D-Louisville, said, “The premiums for individuals are extraordinarily low – with the subsidies. I’m also pleasantly surprised because of all the noise, perhaps that’s not the best word, but I thought we were headed for Armageddon.”
Sen. Tom Buford, R-Nicholasville, said he wasn’t “very impressed.” He quizzed Banahan on the readiness of the website and how easily one could call to have questions answered. He had earlier left the room and said he’d done so to call the exchange and had been put on hold. He also couldn’t open the link to the website.
Banahan said the site is not yet up and running but will be by Tuesday. She said the phone lines can handle up to 200 calls a day.
Sen. Sara Beth Gregory, R-Monticello, said the rates quoted by Banahan were better than she expected but she asked if “younger, healthier individuals are looking at significant premium increases.”
Banahan said younger individuals may pay higher premiums but they can also enroll in a catastrophic plan with higher deductibles to hold down those premiums.
Younger, healthier people generally will face higher rates under the new law while older persons with health problems are expected to see lower premium costs. That’s because prior to the law, insurance companies could factor age and health in setting rates but under the new law must set rates based on “community ratings” of geographical location, age, and whether one smokes or not.
While several Republicans criticized individual aspects of the plan, Sen. Bob Leeper, I-Paducah, zeroed in on the total cost, noting it may save money in Kentucky but the subsidies have to be paid by the federal taxpayers,
“That’s us,” Leeper said, noting the federal government is already running huge deficits.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at email@example.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.