Kentucky received $57.8 million grant for planning efforts.

by Melanie Wolkoff Wachsman

The Obama administration recently finalized a plan for new state-based markets that will offer consumers a one-stop shop for health insurance. Starting January 1, 2014 new health insurance exchanges must be up in running in every state. Is Kentucky ready?

The Kentucky Cabinet for Health and Family Services Office of Health Policy thinks so. The Kentucky Cabinet for Health and Family Services Office of Health Policy recently received a $57.8 million grant from the U.S. Department of Health and Human Services (HHS) that will allow Kentucky to continue its planning for and implementation of programs and systems required by the Affordable Care Act (ACA).

The HHS grant received by Kentucky is one of a total of $229 million in establishment grants awarded to 10 states to help build health insurance marketplaces. The work that will be supported by the grant funds is necessary to comply with the federal ACA regardless of whether the exchange is operated by the state or the federal government.

What the Grant Funds
Kentucky will use its grant to continue the state’s health insurance exchange planning efforts. These efforts include creating a business and sustainability plan, program integrity plan, a Medicaid Implementation Advanced Planning Document, and will help build an end-to-end eligibility and enrollment system to serve both Medicaid and exchange participants.

The grant funds, along with a $50 million project in the Governor’s Recommended budget (HB 265), will provide funding toward meeting the Medicaid eligibility requirements under the ACA. The most significant functionality requirements for health insurance affordability programs involve the Medicaid Program and relate to the expansion of eligibles and the associated simplified eligibility rules. Other requirements include easy, online access, real-time eligibility determinations, and enrollment for most Medicaid or KCHIP applicants, and the necessary interfaces with the Health Benefit Exchange, either federal or state operated. This grant will fund a significant portion of the state’s requirements with 100 percent federal funds, with the remainder of the requirements funded at a 90/10, federal-state matching rate.

“Health insurance exchanges will make purchasing insurance easier for the public by providing eligible consumers and businesses with ‘one-stop-shopping’ where they can compare and purchase health insurance coverage,” said Carrie Banahan, executive director of the CHFS Office of Health Policy, who has been designated as the lead on this project. “Individuals and families purchasing health insurance through exchanges may also qualify for tax credits and reduced cost-sharing depending on their income.”

In a statement HHS Secretary Kathleen Sibelius said “More competition will drive down costs, and exchanges will give individuals and small businesses the same purchasing power big businesses have today.”

It’s any one’s guess as to if all states will be ready by January 1, 2014 deadline. If a state is not ready, the law requires the federal government to step in to run the exchange. For now, Kentucky remains optimistic.