Gov. Beshear to discuss Kynect exchange; Passport, Humana, Anthem, WellCare and Coventry selected in Medicaid expansion


Gov. Steve Beshear has called a press conference at 1 p.m. in Frankfort to discuss the state’s health benefit exchange, or Kynect, under the federal Affordable Care Act, aka Obamacare.

The presser will be live-streamed on Youtube.

Our sources are telling us the governor will release some price structure details on the insurance policies through the new exchange. Enrollment begins October 1.

Our insiders also tell us Beshear may – or may not – reveal the Medicaid Managed Care Organizations chosen both to replace the departed St. Louis-based Centene Corp., as well as to participate in expanded Medicaid coverage in Kentucky under Obamacare.

In case he doesn’t, the winners are:

Passport Health Plan, Humana and Anthem Blue Cross, Blue Shield, along with WellCare Health Plans and Coventry Health Care.

Passport and Humana are based in Louisville, of course. Anthem is based in Cincinnati.

Coventry, based in Bethesda, Md., and WellCare, based in Tampa, Fla., entered Kentucky back in 2012 when the state switched (painfully) to MCOs from a fees-for-services system.

St. Louis-based Centene Corp. exited Kentucky this year in early July after a federal court ruled the state couldn’t stop them from ending their two-year contract early.

Centene executives left Kentucky after losing $200 million. About 125,000 people who were Kentucky Spirit Health Plan – as Centene was branded here – members here have been reassigned either Coventry or WellCare.

The stated issued an RFP in July for the expansion of Medicaid in Kentucky under ObamaCare and the 300,000 new enrollees it is projected to add when it goes into effect January 1. But our sources say implicit in the request is that the “winners” will get the members  left behind by  Kentucky Spirit.

As for the exchange, it will create an online marketplace for individuals and small businesses and businesses.

Anthem, Humana and the new Kentucky Health Cooperative will all offer plans for individuals,  according to state news releases. Anthem, Kentucky Health Cooperative, Bluegrass Family Health and United Healthcare will offer plans for small businesses, according to those releases.

The back story on Kentucky’s Medicaid Managed Care Meltdown:

In April, 2011, state officials asked health insurers to submit managed-care proposals for the $6 billion worth of care 800,000 poor and elderly Kentuckians receive annually under the federal/state Medicaid program. At the time, Gov. Steve Beshear touted the switch to managed care from fee-for-services as saving the state $375 million over the life of the initial three-year contracts. Insiders said officials in other states such as Georgia took as long as 18 months to make the change while Kentucky tried to do it in less than six months.

The three companies receiving MCO contracts were Centene, WellCare and Coventry Cares, all publicly traded companies. (Passport Health Plan, a Louisville-based non-profit controlled by providers, is the managed care insurer for Jefferson County and 17 surrounding counties.)

Each bid for the Kentucky MCO business was based on per-member, per-month health care costs projections. Low-bidder Centene bid $330 per member, per month, according to documents submitted to Insider Louisville. WellCare bid was based on $400 per member per month, and Coventry bid $436 per member per month.

The algorithm state officials used to choose the winners favored the low-cost plans, obviously, because therein lies the savings.

The state methodology initially assigned members to a plan, with the two lowest cost plans getting more members than the highest.

Had Centene’s managed care system actually gotten each member to spend less than $330 per month, they would have made money instead of losing millions. But crucial to getting costs that low would mean cutting reimbursements to health care providers such as doctors and pharmacies, which meant losing some.