Kentucky Abandons State Obamacare Exchange, Buy Insurance from

Published November 12, 2016

Kentuckians who want federal subsidies to help them purchase health insurance plans must visit the national Obamacare exchange now that Kentucky Gov. Matt Bevin (R) has fulfilled his campaign promise to dismantle Kynect, the state’s health insurance exchange.

Bevin’s plan to transition Kynect customers to, the federal exchange, starting on November 1 was approved in October by the federal Centers for Medicare and Medicaid Services.

“By transitioning to the federal exchange, Kentucky will save $20 million a year that can be used for other pressing healthcare needs without compromising access to health insurance products,” said Vickie Yates Glisson, secretary of Kentucky’s Cabinet for Health and Family Services, in a March press release.

Bevin’s office revised those savings estimates to $10 million to $12 million per year in October.

The transition will cost Kentucky about $240,000, not the $23 million predicted by opponents of the plan to dismantle Kynect, the release states.

The change will affect more than 74,000 Kentuckians who bought health insurance for 2016 on Kynect using subsidies disbursed under the Affordable Care Act (ACA).

Cutting Redundant Costs

Amanda Stamper, Bevin’s press secretary, says Kentuckians should not pay to run a state exchange offering virtually the same plans as the federal exchange.

“The federal dollars available to create and operate Kynect are no longer available, meaning Kentuckians now have to pay the entire cost to operate Kynect,” Stamper told Health Care News. “Gov. Bevin’s responsible decision to transition from a redundant state-run platform to will save Kentuckians millions of dollars annually while not affecting the qualified health plans available through the federal exchange.”

Estimates of how much the transition will save Kentucky vary as costs of using federal exchange fluctuate, Stamper says.

“Total savings is a moving target because the cost for Kentucky to utilize is based upon enrollment and premium costs,” Stamper said. “But using historical data, we would estimate that once transitioned, the cost to conduct remaining state responsibilities and utilize will be around $10 million to $12 million. Previously, Kentucky spent $51 million in 2015 [and] about $35.5 million in 2016.”

Leaving ‘A Failing System’

Mike Maharrey, communications director at the Tenth Amendment Center, says the most important thing is to reduce the state’s involvement in Obamacare, a disastrous federal program.

“More important than the savings is that the state [is] withdrawing cooperation with a failing system,” Maharrey said. “The State of Kentucky should not be enabling an unconstitutional federal health care program that is proving to be an unmitigated disaster with rising premiums and shrinking coverage.”

Bevin’s rejection of Kynect’s role in implementing ACA can be traced back to the Founding Fathers, Maharrey says.

“James Madison said that in the case of a deliberate, palpable, and dangerous exercise of powers not granted by the Constitution, states have the right, and are in duty bound, to interpose for arresting the progress of the evil,” Maharrey said. “That’s exactly what Bevin is doing.”

Independence Lost or Found?

Kentucky’s health care and insurance markets were just as constricted using Kynect as they will be when using the federal exchange, Maharrey says.

“There is no ‘independence’ for a state running its own website,” Maharrey said. “This is a federal program packed with federal mandates and regulations the states must adhere to. The only way for a state to truly have independence in its healthcare system is to be rid of Obamacare.”

States with their own exchanges assume costs for implementing ACA without adding value to their insurance plans, Stamper said.

“As a state-based marketplace using the federal platform, the state still retains all responsibility for plan management and consumer outreach,” Stamper said. “We are simply shedding the millions of dollars in cost associated with running the duplicative eligibility and enrollment website and accompanying call center.”

Maharrey says concerns the transition will leave Kentuckians behind are negligible compared to the other problems Obamacare has caused.

“It’s just a matter of going to a different website,” Maharrey said. “The state has already taken steps to communicate the change. I am more concerned by the fact that another major insurer is pulling out of the state next year, premiums are skyrocketing, the much-touted CO-OP went belly-up, and Kentuckians will likely be left with one insurer on the exchange.”

Dustin Siggins ([email protected]) writes from Washington, DC.

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