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FRANKFORT, Ky. (AP) — Kentucky's new Republican administration is moving
forward with plans to shut down the state's health insurance exchange,
becoming the first state to cut ties with one of the key pieces of President
Barack Obama's 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 "as soon as is practicable." 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 Kentucky's 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 Kentucky's 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.
"A majority of Kentuckians are paying a 1 percent assessment on their own
premiums to support kynect operations which they do not use," 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.
"Kentucky's State-based Marketplace has helped tens of thousands of
Kentuckians shop for and purchase quality, affordable health insurance,"
said Ben Wakana, a spokesman for the U.S. Department of Health and Human
Services. "A 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."
Bevin's plans do not affect kynect's 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 Bevin's decision "a big step backward on access to health care in
Kentucky." Susan Zepeda, president of the Foundation for a Healthy Kentucky,
said it "raises a lot of questions," noting state officials had special
programs targeting hard-to-reach groups, including veterans and rural
residents.
"What will be done to sustain these access and equity gains under a new
approach?" she said.
Bevin has also said he intends to overhaul the state's expanded Medicaid
program, which provided health care to 400,000 people and slashed the
percentage of uninsured in the state by half.
Source URL: http://www.cnsnews.com/news/article/kentucky-moves-ahead-plans-dismantle-health-exchange |
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