Health insurance plans in Kentucky move forward

Written by: Logan Bayan

Written on: February 23, 2013


Kentucky establishes new agency to manage health insurance exchange

While many states throughout the U.S. have decided to abandon their efforts concerning a health insurance exchange, Kentucky is one of the few that has decided to build and operate its own. State officials chose for the state to run its own exchange in the hopes that it will better address some of the health insurance concerns that are specific to Kentucky residents. State officials have now formed the Office of the Kentucky Health Benefits Exchange, a new agency that will oversee the operation of the state’s health insurance exchange program.


Agency boasts of $40 million annual budget

This agency will boast of 30 employees, but several hundred contract workers and insurance agents throughout the state. This agency is notably different from others in the state, largely because of its annual budget, which comes in at nearly $40 million. These funds cover the operational costs of the state’s health insurance exchange and the administrative costs of the agency itself, with surplus to account for any catastrophic issues that the exchange may experience in the future.


Health insurance to be accessible to 600,000 people

State officials expect that the exchange system will help more than 600,000 residents throughout the state gain access to health insurance coverage. Many of these people do not have insurance currently, and Kentucky officials believe that this is primarily due to the high costs of coverage for some individuals and families. Kentucky officials aim to address these issues through the exchange. Much of the initial funding that is required for the exchange to take form is being provided by the federal government.


Health insurance exchange to help boost state revenue

The state will impose a 1% fee on all health insurance policies sold through the exchange. This will account for some $50 million in annual revenue for the state. The federal government plans to impose a 3% fee on insurance policies it sells through exchanges it operates throughout the country. State officials have noted that another reason the state has chosen to operate its own health insurance exchange is to avoid potentially paying to help cover the costs of federal exchanges that are being built elsewhere in the U.S.


Article Link:


Health Insurance Exchanges Bring Concerns of IT Disruptions: Survey

By Brian T. Horowitz  | Posted 2/25/2013


Insurers want to implement federally mandated health insurance exchanges, but they worry about IT infrastructure headaches, an Edifecs survey revealed.

Health insurers are embracing the move toward health insurance exchanges, yet they’re concerned about IT infrastructure changes, according to a Feb. 20 report by Edifecs, a health care IT software company.

The Obama administration’s Affordable Care Act calls for states to implement the exchanges, referred to as HIXes, by October 2013 or have the federal government implement them on their behalf. The Web-based exchanges allow small businesses or uninsured individuals to purchase health insurance.

Edifecs—which based its study on interviews with 125 senior health care professionals at the 2013 Healthcare Mandate Summit Feb. 4 to 6 in Austin, Texas—found that 95 percent of respondents plan to participate in an HIX, and 80 percent will join in 2014.

However, 88 percent of respondents are concerned about disruptions to their current IT enrollment infrastructure and processes when they join an exchange. Insurers will have to create new business processes and integration points rather than simply add new data from individuals and small businesses, according to Jamie Gier, vice president of corporate marketing at Edifecs.

“It goes beyond simple data feeds,” Gier told eWEEK in an email. “Beyond integrating their systems with federal and/or state exchanges, insurers will need to reconcile their detailed member records with those maintained by the exchange on at least a monthly basis.”

Insurers must manage and reconcile their membership records between their own insurer systems and HIXes, said Gier. This cross-checking of data will confirm eligibility and credit premiums, as well as ensure correct payments, said Gier.

In the survey, insurers also voiced concerns about a lack of time for sufficient testing of the exchange systems, said Gier.

“We are now less than eight months from the Oct. 1, 2013, deadline for exchanges to start offering enrollment,” Gier noted. “Many systems have yet to be set up, and all must be tested across multiple scenarios.”

A lack of comprehensive testing of IT systems could lead to major disruptions for the carriers and the exchanges. In fact, HIX health plans go into effect Jan. 1, 2014, and qualified health plans, benefit tiers and payment contracts must be entered and integrated with insurers’ IT systems by then, said Gier.

Many states will also have to overhaul their existing IT systems to comply with the Affordable Care Act, the survey revealed.

Ninety-three percent of respondents said they wanted more input in how the exchanges will be built. In addition, 69 percent said the information received from exchanges to date was either “poor” or “very poor.”

A lack of common data interoperability could be a problem as insurers transmit and receive information in the exchanges, Gier suggested.

Of respondents, 39.7 percent were “somewhat concerned” and 35.3 percent were “very concerned” about being able to support multiple formats from different exchanges. In addition, 96 percent of respondents were concerned about data formats changing over time.

“These formats will likely change as each exchange fixes issues and improves business processes,” said Gier. “Insurers will need flexible IT systems to accommodate the changes.”

Insurers participating in more than one exchange face additional data-transfer challenges. More than 30 percent of survey respondents intend to participate in three to five exchanges, according to Gier.

Meanwhile, doctors could face payment delays if insurance exchange data doesn’t match up.

“In the HIX model, that goal is more difficult to achieve because insurers have to work with the exchange and the federal government to reconcile and verify information,” Gier noted.

Still, the Web-based exchanges will bring fewer unpaid bills for doctors, said Gier.

She noted that low or unpredictable data quality will also be a challenge in HIXes.

“Health plans will need to carefully examine membership/enrollment updates coming from state exchanges,” said Gier. “Each state is at varying stages of HIX adoption and will have their own transaction formats, member identifiers and process flows.”

Brian T. Horowitz is a freelance technology and health writer as well as a copy editor. Brian has worked on the tech beat since 1996 and covered health care IT and rugged mobile computing for eWEEK since 2010. He has contributed to more than 20 publications, including Computer Shopper, Fast Company,, More, NYSE Magazine, Parents,, USA Weekend and, as well as other consumer and trade publications. Brian holds a B.A. from Hofstra University in New York.

Follow him on Twitter: @bthorowitz

Article Link: