Health Care

Cheaper health plans that may not cover pre-existing conditions are coming to Kansas

Kansans will be allowed to buy health plans that aren’t regulated by the federal government or the state Insurance Department, after Gov. Laura Kelly decided not to take action on legislation authorizing the plans.

In turn, the Democratic governor is hoping Republican leaders will advance Medicaid expansion – one of her top priorities that has been stuck in the state Senate.

“New ideas always carry a certain level of risk. I believe the potential risks of this legislation can be mitigated if they are coupled with a stable, secure, proven healthcare option: Medicaid Expansion,” Kelly said in a statement.

Soon after Kelly announced her decision Friday, the Kansas Farm Bureau — the primary supporter of the bill — released a statement calling Kelly’s health care plan, which includes Medicaid expansion, a “critical piece” in finding a health care solution for the whole state.

This is the first time that Kelly has allowed a bill to become law without her signature since she took office in January. In Kansas, bills become law if the governor opts to neither sign nor veto them within 10 days of receiving them.

Kelly would have likely faced a tough fight to uphold a veto. The legislation passed with veto-proof majorities: 84-39 in the House and 28-12 in the Senate.

The law allows the Farm Bureau’s financial services division to sell health plans that aren’t regulated by the federal government or Kansas Insurance Department.

Senate President Susan Wagle, a Wichita Republican, said Americans have seen health care costs “explode while options dwindle.” Lawmakers desperately need to help Kansans struggling to afford coverage find new options, which the new law will do, she said.

“The rising cost of health insurance is the largest threat that our farmers and ranchers face today. I commend the Kansas Farm Bureau for working to find an affordable alternative especially one that won’t fall under the disaster of Obamacare,” Wagle said.

Wagle’s statement made no mention of Kelly or Medicaid expansion.

Farm Bureau said many of its members have been priced out of individual insurance plans offered under the Affordable Care Act as premiums have soared. They make too much money to qualify for subsidies. Farm Bureau estimated its plans could save them about 30%.

“Today Governor Kelly made a personally difficult choice in the spirit of compromise. By refusing to succumb to political obstructionism, she has paved the way for lawmakers to advance a comprehensive healthcare solution that will benefit our entire state,” Farm Bureau President Rich Felts said.

Unlike plans that fall under the Affordable Care Act, commonly called Obamacare, the Farm Bureau plans won’t have to cover pre-existing conditions or they could charge more for covering them. They also won’t have to cover the ACA’s list of “essential health benefits,” like prescription drugs, maternity care and mental health.

Some supporters of the bill said Farm Bureau would cover most of those things voluntarily. But patient advocacy groups were skeptical, questioning how Farm Bureau could realize the savings it promised without severely curtailing coverage.

They compared it to short-term insurance plans that also don’t have to follow the ACA mandates, saying those plans tend to leave people in dire straits if they have a serious medical condition.

Merriam resident Renee Dietchman said that happened to her when she was diagnosed with lung cancer while on a short-term plan. It didn’t cover her treatments and she incurred $40,000 in medical debt in three months before she was able to get an ACA plan during the next open enrollment period.

“I am a real-life example of why these skimpy insurance plans are harmful — not helpful,” Dietchman said in a letter she sent to Kelly urging her to veto the bill.

In a statement outlining her reservations with the legislation, Kelly said it is “fundamentally wrong” to deny coverage to anyone because of a pre-existing condition. She said she was also troubled that only two other states have implemented similar legislation.

But Kelly said she believes governing “demands a relentless pursuit of common ground.” She said supporters of the bill put it forward because health care costs too much. Farmers and ranchers also face challenges from declining farm revenue, severe weather and a global trade war, she said.

“(Supporters) openly acknowledge that this bill will not solve all the complex problems plaguing our healthcare system. In their opinion, an ‘all of the above’ approach stands the best chance of helping the greatest number of Kansans. On these points, I wholeheartedly agree,” Kelly said.

The political arms of the American Cancer Society, American Lung Association, MS Society and other groups all opposed the bill. Insurance companies also opposed it, saying it would be impossible for them to compete with unregulated plans.

Farm Bureau estimated that about 42,000 members would purchase one of their plans, and most of them would come from the ranks of the currently uninsured.

“The KFB plan is not intended to solve all problems facing the healthcare industry in Kansas, but no one understands the importance of neighbors working together to solve problems more than farmers and ranchers,” Felts said.

Opponents said they feared the actual number who choose the plans could be much higher than 42,000, as generally young and healthy people opt out of the ACA markets, causing prices to rise more for people with pre-existing conditions. Anyone who pays a $50 membership fee can join Kansas Farm Bureau, whether they have a connection to agriculture or not.

Democrats had offered an amendment to restrict the Farm Bureau plans to people who work in farming or ranching, but the bureau opposed it and it did not become part of the final bill.

If Medicaid is expanded, Kansas would join most other states in providing health coverage to low-income individuals living at up to 138 percent of the federal poverty level. For a family of four, that translates to $34,638 in annual income.

Kansas currently has one of the tightest Medicaid eligibility limits in the nation, with programs restricted mainly to low-income children, pregnant women, people in nursing homes and people with disabilities.

The Kansas Senate will vote May 1 on whether to move Medicaid expansion one step closer to a full debate.

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Kansas City Star health reporter Andy Marso was part of a Pulitzer Prize-finalist team at The Star and previously won state and regional awards at the Topeka Capital-Journal and Kansas Health Institute News Service. He has written two books, including one about his near-fatal bout with meningitis.
Jonathan Shorman covers Kansas politics and the Legislature for The Wichita Eagle and The Kansas City Star. He’s been covering politics for six years, first in Missouri and now in Kansas. He holds a journalism degree from the University of Kansas.