Kentucky Gov. Matt Bevin has announced plans to shut down Kynect, the state’s highly successful marketplace for Affordable Care Act health insurance, and switch to the federal Healthcare.gov platform.
The move would be the first time a state has abandoned a smoothly functioning state exchange, through which about 87,000 Kentucky residents have purchased insurance.
During his campaign for office, Gov. Bevin, a Republican, had vowed to close Kynect, say it was “redundant” because of the existence of Healthcare.gov, and “adds no value.” His office says the governor wants the transition to occur “as soon as practicable,” possibly by this November for the start of enrollment for 2017.
Gov. Bevin has revised a campaign pledge to end the federally funded expansion of Medicaid, which has provided coverage to about 425,000 additional residents in the state, or about 10% of Kentucky’s population.
He now says he wants to scale back Medicaid enrollment before 2020, when the state will be required to cover 10% of the program’s cost. Any changes to Kentucky’s Medicaid program would require approval by the federal government.
The Kentucky governor’s stance on Medicaid is contrary to that of a number of state leaders in his party. The Republican governors of South Dakota and Wyoming have proposed expanding Medicaid in their states, and 10 others have already expanded it or are defending past expansions by prior governors.
Because Kentucky’s exchange was established by executive order of the previous governor, Democrat Steve Beshear, Gov. Bevin can shut down Kynect via his own executive order.
Kentucky officials have estimated that moving to Healthcare.gov will cost the state $23 million or more. The governor’s office said it does not believe the state will have to repay any of the $290 million it received from Washington to build Kynect, but some federal officials have said Kentucky would have to return $57 million the exchange has not yet spent.
The change will slightly reduce the cost of health insurance for some residents and increase it for others. Currently the state funds Kynect via a 1% fee on premiums for all large group plans, whether purchased through the state’s exchange or not. Healthcare.gov charges a 3.5% fee on plans selected through it. Statewide, the net savings would be about $10 million per year.
“The vast majority of Kentuckians are paying an assessment to support a website that they do not use,” a spokesperson for Gov. Bevin said. The switch from Kynect to Healthcare.gov “will ensure that the assessments are only applied to those using the exchange.”
The Department of Health and Human Services (HHS) said it will strive to provide a “seamless transition” to Healthcare.gov for Kentucky residents. But some consumer advocates worry that the switch will cause confusion that will result in some Kentuckians being without coverage or with inadequate coverage.
