With Health Care Switch, Kentucky Ventures Into the Unknown
Gov. Matt Bevin spoke at the Kentucky Chamber of Commerce dinner in Lexington last week. Credit Timothy D. Easley/Associated Press
WASHINGTON — There is no longer any question that Gov. Matt Bevin of Kentucky plans to shut down the health insurance exchange his state built to enroll residents for coverage under the Affordable Care Act. Now that he has notified the Obama administration of his intention to do so, the question is, will it change the law’s substantial impact there?
It is hard to predict, partly because what Mr. Bevin is doing is without precedent. While a few states have been forced to largely rely on the federally run exchange after their own versions failed, Kentucky will be the first to abandon a homegrown exchange that functions well.
The federal exchange, HealthCare.gov, is running smoothly, and has in fact been more successful in enrolling new customers for 2016 than the 13 remaining state-based exchanges.
And while Kentucky has seen its uninsured rate drop more than that of any other state under the health law, some other states that have relied on the federal exchange have seen similar results.
The Obama administration has promised to work with Kentucky on a “seamless transition” to the federal exchange so that the roughly 81,000 residents who bought private health plans through the state one, Kynect, for 2016 will remain covered and others will be able to shop without a hitch. Jessica Ditto, a spokeswoman for Mr. Bevin, said that the transition could take place in time for the next open enrollment period, which starts in November, but that details had not been completed.
Still, supporters of the health law in Kentucky are worried. One concern, they say, is that some people will inevitably lose coverage during the switch to the federal exchange because they will get confused or annoyed or lost in the shuffle.
“We’re concerned about this creating a perception that Kynect is failing,” said Emily Beauregard, executive director of Kentucky Voices for Health, a coalition of advocacy groups. “It’s one more way to try to take the legs out from under the Affordable Care Act. But the truth of the matter is Kynect is working perfectly, and it’s been good for Kentucky.”
A far bigger threat is Mr. Bevin’s plan, still vague, to overhaul Kentucky’s expansion of Medicaid, which has provided largely free health care to far more residents — about 425,000 so far, or 10 percent of the population — than have gotten private coverage through Kynect.
“The whole program is important to Kentuckians,” former Gov. Steven L. Beshear said, “but the Medicaid expansion is the part that must stay in effect to provide most Kentuckians with affordable health care.”
Mr. Bevin is no longer vowing to reverse the Medicaid expansion, as he did early in his campaign. But he says that with the state required to cover 10 percent of the cost by 2020, the program is unsustainable in its current form. He has talked about scaling back enrollment, among other things, although any changes would require the federal government’s signoff. He said last month that he hoped to have a workable proposal by summer.
Mr. Beshear and other champions of the health law in Kentucky said Kynect, which the state received $290 million in federal grants to build, is easier to use than HealthCare.gov, and has added benefits that the federal exchange lacks. For example, the state determines which insurers participate under Kynect, and what the exchange plans look like and how much they will cost. Kynect has its own call center and coordinates outreach and enrollment efforts; it has become a well-known entity across the state, advertised on billboards, television and shopping bags, and in even the smallest rural newspapers.
Kynect is also the portal through which residents apply for Medicaid, and supporters say it will be more difficult to apply through the federal exchange, which will direct them to their state Medicaid office. Mr. Bevin has pointed out that Medicaid beneficiaries in Kentucky applied that way before Kynect opened in 2013. But Kynect, Ms. Beauregard said, streamlined the process significantly.
Another matter is the cost of shutting down Kynect. The Beshear administration estimated that it would be at least $23 million to dismantle the exchange, largely to “de-integrate” the software and technology used to enroll people in Medicaid and other safety-net programs.
Ms. Ditto, the governor’s spokeswoman, said that based on a preliminary analysis, the Bevin administration believed that the cost would be “substantially less.”
Another point that defenders of Kynect make is that its annual budget comes entirely from a 1 percent assessment on all insurance premiums in the state, which existed even before Kynect opened to pay for another insurance program. The federal exchange places a 3.5 percent assessment on all plans bought through it.
They say the higher assessment from the federal exchange could make premiums more expensive. But Ms. Ditto said the federal exchange’s assessment would be fairer.
“The vast majority of Kentuckians are paying an assessment to support a website that they do not use,” she said. “This will ensure that the assessments are only applied to those using the exchange.”
Ms. Ditto said the Bevin administration did not anticipate having to pay back any of the $290 million in federal funds it received to build Kynect. But federal officials have suggested the state may need to repay $57 million the exchange has not yet spent.
Ms. Ditto also pointed out that the Beshear administration had planned to cut Kynect’s outreach and marketing budget substantially starting next year, as the federal grant funds dried up. But Audrey Tayse Haynes, who ran the state’s Cabinet for Health and Family Services under Mr. Beshear, said that made sense because the uninsured rate had dropped so much already.
Regardless, Mr. Beshear said he believed that the coverage gains the state had made would not erode once HealthCare.gov replaced Kynect, even though polls have consistently found Kynect to be more popular among its residents than the health law itself. Many, in fact, initially believed that Kynect was a program separate from the divisive health law, although Mr. Beshear said that perception had faded.
“Certainly I feel it will make it more difficult for Kentuckians to navigate the system and know what to do, which could reduce the number of people who are covered,” he said. “It’s going to be the job of many of us who think Kentuckians having health care is all-important to make sure that doesn’t happen.”
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