By Melissa Patrick
Kentucky Health News
Gov. Andy Beshear said Wednesday that he will restart the state health-insurance exchange that his father, then-Gov. Steve Beshear, began in 2013 under the Patient Protection and Affordable Care Act. Kynect was dismantled in 2017 by Republican Matt Bevin, who served between the two Democrats.
Beshear announced that he had told federal officials of his intent to move to a state-based exchange, beginning Jan. 1, 2022. The exchange is a marketplace for health-insurance policies that meet ACA requirements and a portal for buyers to get tax credits to reduce premium costs. Kentucky also used it for Medicaid enrollment as it expanded Medicaid to more of the working poor.
“Kynect was one of the most successful exchanges in the country, and because of it we reduced our uninsured Kentuckians at the highest rate in the country for several straight years,” Beshear said. “It was the right thing.”
Beshear did not explain in detail how the exchange would be funded, but said moving to it would save money. He said its annual costs would be $1 million to and $2 million, rather than the current $9.8 million that is paid for by a 3 percent user fee.
A news release from Beshear said reinstating a state exchange will save the state system $2.8 million to $3.8 million the first year, and $7.8 million to $8.8 million a year thereafter.
He said it will only cost the state a one-time $5 million fee to reinstate and upgrade Kynect because the system was not eliminated, but just basically turned off. “We can save significant dollars that we can use to offset the cost of health care,” he said.
Kynect was funded by a 1 percent fee on health-insurance policies sold in the state. Bevin said it wasn’t fair for everyone to pay for an exchange used by fewer than 100,000 Kentuckians, but he ended up keeping the fee to pay for the transition to the federal exchange, to fund the Kentucky Health Information Exchange, and to fund the remaining costs of Kentucky Access, the high-risk insurance pool for which the fee was levied long ago.
Bevin moved Kynect’s function to a federal website, healthcare.gov, and moved the Medicaid program, for low-income and disabled people, to Benefind, a one-stop-shop for public benefits, a program that was originally designed to complement Kynect.
“In the last four years, we moved backwards on health care,” Beshear said, noting that the percentage of people without health insurance went up while insurance shoppers had fewer options for coverage.
He said going back to a state exchange offers many benefits. He said it will reduce the the cost of premiums, be more efficient, and offer “single-door” access for Medicaid users and private plans, helping continuity of coverage as people move between those systems — which many Kentuckians do, especially if they have jobs with fluctuating incomes.
Beshear said it will also allow greater flexibility and autonomy than the federal exchange, enabling the state to extend the annual open-enrollment period and offer special open-enrollment periods.
The federal government has not allowed a special enrollment period for those who have lost coverage during the coronavirus pandemic, but a state-based exchange could do that. “This pandemic shows us that the lack of good health care options makes us more vulnerable and less resilient,” Beshear said.
He added that this was just the first of a larger set of announcements that his administration will be making in the fall.
“We have an opportunity to be better, to get healthier, to save money and ultimately to provide that basic human right that is health care,” he said. “I believe we can do this much better than the federal government.” He added, “I’m committed to getting every Kentuckian signed up for health care.”