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Health & Science

What Kentucky has Learned about Creating a Health Insurance Exchange


Governor Walker will announce his decision Friday, as to whether Wisconsin will create a state-run health insurance exchange or rely on the federal government to develop a plan.

WUWM inquired about Kentucky’s plan – that state is months ahead in planning its exchange.

Following, are Jill Midkiff’s responses, spokesperson for Kentucky’s Cabinet for Health and Family Services.

What Is A Health Insurance Exchange?

“A lot of people believe that an insurance exchange is a government-operated health care system when, in fact, it is a marketplace for individuals to go and purchase insurance,” says Midkiff.

She says Kentucky’s exchange will run the same as systems where consumers can go online to compare hotel rates and the cost of flying different airlines. People will be able to sort through a collection of insurance plans, compare them based on price and quality and select one that best fits their needs.

Why Would A State Want To Run Its Own Exchange, and Not Have The Federal Government Do It?

Midkiff says Kentucky wants to run its own exchange to prevent dual regulation of the insurance market (state and federal) and to put the state in control of determining what benefits work best for its citizens.

“The state is more familiar with its unique regional and economic needs,” Midkiff told WUWM.

Midkiff says Kentucky’s population is fairly diverse – urban pockets in a largely rural state. A sizeable number of its residents also live below the federal poverty level and are on Medicaid, and the state faces a range of serious health conditions. They include: the highest rate in the U.S. of cancer deaths, 4th highest rate of cardiovascular mortality, 5th highest rate of heart disease mortality and 12th in the nation for stroke mortality.

How Does A State-Run Exchange Come Together?

Kentucky is still in the early phases of creating its exchange, Midkiff says, just having set up its Office of the Kentucky Health Benefit Exchange in July of this year. Gov. Steve Beshear assembled a large group of stakeholders, including representatives from the state hospital association, chamber of commerce, insurers, small business owners and consumers, to help establish the exchange.

She says, in order to open enrollment in October of 2013, Kentucky is now hiring staff, contracting with an IT vendor to develop a portal for the benefit exchange and working with an advertising agency to market the system and communicate with the public.

Wisconsin, like Kentucky, had received federal seed funds to initiate exchange planning early.

When Gov. Scott Walker was elected two years ago, he stopped the process and returned the money. He opposes the Affordable Care Act, and said he would not decide whether to create an exchange until after the Nov. 6 election, hoping if President Obama lost, the federal law might be scrapped.