The Seattle Times
Kentucky moves ahead with plans to dismantle health exchange
Originally published January 11, 2016 at 4:08 pm
Updated January 11, 2016 at 5:26 pm
By ADAM BEAM
The Associated Press
FRANKFORT, Ky. (AP) — Kentuckyfs new Republican administration is moving
forward with plans to shut down the statefs health insurance exchange, becoming
the first state to cut ties with one of the key pieces of President Barack
Obamafs signature health care law because of a political promise.
Gov. Matt Bevin notified federal officials in a letter dated Dec. 30 that the
state exchange will cease operations gas soon as is practicable.h That will be
at least a year from now, according to federal law. It will not affect health
plans sold for 2016.
Kentucky is one of 14 states that run their own state health insurance
exchanges. More than 100,000 people have used Kentuckyfs exchange, dubbed
kynect, to purchase private health insurance plans with the help of a federal
subsidy since it was implemented in 2013.
But Bevin, just Kentuckyfs second Republican governor in more than four
decades, campaigned on eliminating kynect. The system is paid for with a 1
percent tax on all individual health plans sold in the state, both on and off
the exchange. Right now, Bevin says about 85,000 people have purchased a private
health insurance plan through kynect, or about 2 percent of the population.
Bevin spokeswoman Jessica Ditto said the fees from the sale of plans on
kynect generate between $2.5 million and $4 million of the approximately $27
million it takes to operate the exchange each year.
gA majority of Kentuckians are paying a 1 percent assessment on their own
premiums to support kynect operations which they do not use,h Ditto said.
Once Kentucky moves to the federal exchange, that tax goes up to 3.5 percent.
But the tax is only applied to plans sold on the exchange, Ditto said.
Kynect was viewed as a national model for other states and was a success
story for a Democratic administration plagued by technical problems with the
federal system. Former Democratic Gov. Steve Beshear created it with the help of
about $290 million in federal grants. He has estimated it will take at least
nine months and cost $23 million to dismantle the system.
gKentuckyfs State-based Marketplace has helped tens of thousands of
Kentuckians shop for and purchase quality, affordable health insurance,h said
Ben Wakana, a spokesman for the U.S. Department of Health and Human Services. gA
successful transition from Kynect to the federal Marketplace will require strong
cooperation and commitment from the state of Kentucky to its residents who have
gained health insurance under the Affordable Care Act.h
Bevinfs plans do not affect kynectfs open enrollment period, which runs
through Jan. 31. And it does not affect any plans that have been sold for 2016
or anyone who signed up for Medicaid coverage through the kynect site.
Next year, eligible Kentuckians who purchased subsidized private health plans
can still purchase them, they just have to buy them from the federal system. The
federal system has different plans with different rates than were offered on
kynect.
Jason Bailey, executive director of the Kentucky Center for Economic Policy,
called Bevinfs decision ga big step backward on access to health care in
Kentucky.h Susan Zepeda, president of the Foundation for a Healthy Kentucky,
said it graises a lot of questions,h noting state officials had special programs
targeting hard-to-reach groups, including veterans and rural residents.
gWhat will be done to sustain these access and equity gains under a new
approach?h she said.
Bevin has also said he intends to overhaul the statefs expanded Medicaid
program, which provided health care to 400,000 people and slashed the percentage
of uninsured in the state by half.