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The Associated Press May 3, 2012, 2:19PM ET

Ky. gov prepares for federal health care reforms

Groundwork is being laid to create a statewide health insurance exchange in Kentucky intended to reduce coverage costs, but it would be used only if the federal health care reform law is upheld by the U.S. Supreme Court.

Gov. Steve Beshear said in a statement Thursday that Kentucky needs to be ready to run such an exchange, which would serve as online marketplace where consumers could compare coverage options and prices of various insurance plans.

Insurance exchanges are key to the federal health care overhaul signed into law by President Barack Obama in 2010. They're set to go into operation on Jan. 1, 2014, if the health care law isn't struck down.

The Supreme Court could rule by late June on the constitutionality of the health care reform law dubbed the Affordable Care Act.

"While no one can predict what the Supreme Court will ultimately decide, it is imperative that the state prepare for any decision," Beshear said. "The steps we have taken to date and the planning process we are putting in place helps ensure the state is able and ready to follow the law, if upheld, and also guarantees we don't have the federal government running our insurance market."

Beshear said the Kentucky Hospital Association, the Kentucky Chamber of Commerce, Kentucky Voices for Health, and Anthem Blue Cross Blue Shield are among groups that have voiced support for a state-operated insurance exchange as opposed to one that would be operated by the federal government if the state doesn't act.

If justices uphold the health care reform law, Beshear said he will create the health insurance exchange by executive order.

Kentucky Cabinet for Health and Family Services Secretary Audrey Haynes said her staff will meet with insurers, providers, agents, consumers, employers and advocates in the coming weeks to develop the health insurance exchange.

"The commonwealth believes it is best positioned to operate an exchange for the full benefit of Kentuckians," Haynes said. "Kentucky understands the unique regional and economic needs of our citizens, as well as the health insurance needs of small businesses. We have existing working relationships with insurers, agents, advocates, health care providers and other business partners. By establishing a state-operated exchange, we can also better ensure coordination and integration of eligibility determinations and enrollment with the Medicaid program."

In February, Kentucky received a nearly $58 million grant from the U.S. Department of Health and Human Services to prepare for the implementation of the health care reforms. Kentucky previously received two federal health insurance exchange planning grants totaling $8.6 million. These grants provided the necessary resources to conduct research and planning create a health insurance exchange.

Beshear's announcement raised concerns in Kentucky among opponents of the federal care reforms.

Tea party activist David Adams said Kentucky shouldn't have accepted the federal grants, and that Kentuckians should be outraged that Beshear has been working behind the scenes to plan the health insurance exchange.

"This is the most important thing state government will do to us this year," he said.

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