The Opening Round in the Battle to Implement Health Care Reform

A recent battle in my home state of Kentucky gives a good preview of how the national battle to implement health care reform is going to go -- kicking and screaming.
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A recent battle in my home state of Kentucky gives a good preview of how the national battle to implement health care reform is going to go.

Kicking and screaming.

On Sept. 23, the first part of health care reform hit the streets. The Patient Protection and Affordable Care Act provides that health insurance companies offering "child only" policies cannot deny coverage to a child due to any preexisting condition present in that child.

A 10-year-old with a ton of severe ailments can purchase the same policy as a healthy 10-year-old.

Insurance companies weren't happy about the legislation. Thus, in Kentucky, and in many other states, they simply stopped offering "child-only" policies. Problem solved!

Kentucky Insurance Commissioner, Sharon Clark, subpoenaed representatives of all insurance carriers that sold health insurance policies in Kentucky. She brought them all in for a fact-finding hearing on Oct. 13. One of the things that came out in the hearing and testimony is that while there is not a large number of people seeking "child-only" policies, the insurance companies are very concerned about suddenly getting a number of "bad risks" that they had not planned for in their pricing.

It was also determined that if all private carriers stopped offering child-only policies, it would overwhelm Kentucky Access, a state-run health insurance pool designed as a place for people to get coverage who can't find it anywhere else.

Thus, on November 18, Clark ordered all insurers selling individual health insurance policies in Kentucky to offer an annual enrollment each January for children under age 19.

It took strong action by the Kentucky Insurance Commissioner to get this first part of health reform implemented for a very small part of the population. She made a pragmatic decision to only allow "open enrollments" in January of the next two years, (in 2014, no insurance company will be allowed to consider preexisting conditions), rather than keep enrollments open all year long.

In other words, if you know an unhealthy child who doesn't have health insurance, get them to sign up in January. Otherwise, they are going to have to wait until next January.

Kentucky is not a stranger to the battle over health care coverage. In fact, it is a pretty good test market of what is to come.

In the early 1990's, Governor Brereton Jones made universal health care a cornerstone of his administration. Kentucky passed laws that prohibited insurance carriers to consider pre-existing conditions.

Since Kentucky was one of the few states with that type of insurance, it was said that some unhealthy people moved to the state just to get coverage. I was (and still am) a licensed insurance agent and suggested to my clients without coverage that they should take advantage of the opportunity to get coverage at good rates.

Eventually, most of the insurance carriers stopped writing business in Kentucky. To lure them back, Kentucky had to drop the universal coverage idea.

Now we are seeing a similar battle, but one that will be fought in each and every state. Insurance companies are not in the business of losing money. They are going to fight implementing health care reform at every level they can. Ultimately, the only option for them might be the same as in Kentucky in the early 1990s. They may stop offering coverage.

Kentucky's current insurance commissioner is unusual. She came from a consumer protection background instead of directly from the insurance industry. An insurance commissioner with closer ties to the industry might have been less inclined than Clark to order companies to offer child-only policies.

It's a small battle in a small state for a small set of the population, but a big glimpse of how implementing health care reform nationwide is going to go.

The devil is going to be in the details on each step of the health reform roll out. Like all business people, those with a stake in the health care and insurance delivery systems are going to do everything they can to protect their own economic interests. Some regulators are going to be diligent and aggressive in enforcing and interpreting the new laws. Others will not. Every decision and action will have possibilities for compromise or change.

Health care reform is not going to suddenly appear one day when we wake up. Even if the reforms are not scaled back by Congress, it's going to be a long and hard-fought battle.

As we have seen in this small example.

Don McNay, CLU, ChFC, MSFS, CSSC of Richmond, Kentucky, is an award-winning columnist, structured settlement consultant and Huffington Post Contributor.

He is the author of the book, Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery. He has appeared on the CBS Evening News With Katie Couric along with numerous other television and radio programs.

You can read more about Don at

McNay has Master's Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University.

McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field

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