The Federal Health Exchange - Pros and Cons for Kentucky

Should Kentucky go ahead with setting up a health insurance exchange? The problems seem to outweigh the benefits and experts are advising the state to be cautious.

State-based exchanges are a key component of the Affordable Care Act (ACA). Every state is expected to have its exchanges up and running by January 1, 2014. While some have moved forward with setting up the exchange, others are still thinking about whether they should go ahead. If they do not comply, the U.S. Department of Health and Human Services (HHS) will take on the responsibility of establishing and operating the exchange in that state. Kentucky is one of the states which has still not set up an exchange. Should the state go ahead or not? What are the pros and cons involved?

The arguments in favor of the health insurance exchange:

• An online market place where low and moderate-income individuals and small employers can find, compare and enroll in a Kentucky health insurance plan

• Individuals who are not offered insurance by their employer can buy a plan directly in the exchange

• A choice of health plans that meet certain benefits and cost standards

• Competition among insurance providers is expected to lower premium costs

• Only place to purchase insurance with tax subsidies

Sadly, there are many issues associated with setting up a health exchange in Kentucky, and these may, in fact, outweigh the benefits. The reasons why experts advise the state to exercise caution:

• The exchange rules are still unclear and incomplete. If Kentucky goes ahead, it may end up with a result that does not meet federal regulations. This would be a great waste of time and money.

• Many experts are doubtful as to how the federal government will find the funds to set up and operate a health exchange in case the state fails to do so. There’s no indication of where the funds will come from.

• Kentucky will have very limited control over the exchange, whether state or federal.

• Setting up and running an exchange means increasing administrative and operational costs and responsibilities. Though funded through 2014 by the federal government, the rules are that the exchange must be self-sustaining after that. State spending is bound to increase.

• Fees set on insurance companies will raise Kentucky health insurance premiums, contrary to expectations.

As the Kentucky administration continues to mull policy options, Kentucky residents who don’t have health insurance shouldn’t put off looking for affordable options. The best deals are out there and one can find a suitable plan with just a little effort. If you are looking for affordable Kentucky individual health insurance, locate a reliable and licensed health insurance brokerage. The right company can help you find a cost-effective plan to meet your specific goals.