Deborah Yetter

Louisville Courier Journal

FRANKFORT, Ky. Following through on a campaign pledge, Gov. Matt Bevin has notified federal authorities he plans to dismantle kynect, Kentucky's health insurance exchange created under the Affordable Care Act.

The decision drew immediate fire from health care advocates, including Bill Wagner, executive director of the Family Health Centers, a network of public health clinics in Louisville.

"It's a great disappointment," Wagner said. "It's an unwelcome setback in our efforts to reach the number of uninsured people and improve access to health care in Kentucky."

In a Dec. 30 letter to Sylvia Burwell, secretary of the U.S. Department of Health and Human Services, Bevin said he plans to wind down the state health exchange and transition Kentuckians to the federal site, healthcare.gov, to shop for insurance under the law also known as Obamacare.

Meanwhile, kynect remains open and the changes will not affect anyone shopping for insurance for the current enrollment period, which ends Jan. 31. Nor will the changes affect anyone who signed up for Medicaid, the government health plan for low-income citizens, through the kynect site.

Bevin's office said Monday in a statement that his goal is to eliminate "the redundancy" of Kentucky's online health exchange.

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Advocates had urged Bevin to keep kynect, a website praised for its accessibility and ease of use. They said helped hundreds of thousands of Kentuckians sign up for health coverage. It also included a public information campaign and workers to help people get health coverage.

"That's really disappointing," said Emily Beauregard, executive director of Kentucky Voices for Health, a coalition of advocacy groups. "It's a lot more than just a website."

The decision also was criticized by Jason Bailey, executive director of the Kentucky Center for Economic Policy, a non-partisan, progressive policy and research group based in Berea.

“The repeal of Kynect by Gov. Bevin is a big step backward on access to healthcare in Kentucky,” Bailey said. “It will create an even bigger hole in Kentucky’s budget, using at least $23 million to dismantle the national model for state exchanges that could be better spent on education, public safety or other essentials to thriving communities.”

Ben Wakana, press secretary for the U.S. Department of Health and Human Services, said the federal agency is committed to a “seamless transition.”

“Kentucky’s state-based marketplace has helped tens of thousands of Kentuckians shop for and purchase quality, affordable health insurance,” Wakana said. “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.”

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Bevin, a Republican, had pledged to dismantle the health exchange authorized by executive order of his predecessor, Democrat Steve Beshear. Bevin's letter said he wants the transition to the federal site to occur "as soon as is practicable."

Beshear, who had urged Bevin to keep kynect, had estimated it could cost $23 million or more in technology costs to dismantle it.

Wagner said he expects the costs could exceed $23 million.

"I think the cost is going to be considerably higher than that in a very lean budget year," he said.

Beauregard said that in addition to the website, kynect includes scores of community "kynectors" throughout Kentucky who helped people understand health coverage choices and sign up for plans. It also includes a call center that employs workers to answer questions about the health law and help people sign up.

How will clinics fare if Bevin drops kynect?

And it allowed companies to provide insurance plans tailored for Kentucky, she said, a feature that won't be available on the federal site.

Bevin has said his goal is to complete the transition by the end of 2016.

Bevin has said that kynect, created with federal money, is not sustainable. It was designed to become self-sufficient in 2015, financed by a 1 percent fee on all insurance plans sold in Kentucky, money previously used to finance Kentucky Access, an insurance pool for people who had been denied coverage largely because of high-cost health conditions.

The new federal health law bans denial of coverage because of health conditions. Kentucky Access was shut down and consumers were directed to kynect to shop for plans.

Bevin spokeswoman Jessica Ditto said it appears that during the current enrollment period, some 85,000 people have purchased health plans through kynect for 2016, meaning that most Kentuckians are paying for the service through the 1 percent surcharge for a service that only a fraction of Kentuckians use. By contrast, the federal site is financed with a 3.5 surcharge only on plans sold through the site.

"The vast majority of Kentuckians are paying for a website that only two percent of Kentuckians use," Ditto said.

Those numbers don't count the about 425,000 Kentuckians added to Medicaid through the site and the federal law that allows states to expand Medicaid to anyone earning below 138 percent of the federal poverty level, about $16,200 a year for an individual. The 1 percent surcharge is to apply this year to individual Medicaid plans provided in Kentucky through private managed care insurance companies.

Previously, Medicaid in Kentucky covered only very poor women who are pregnant, children, disabled people and low-income elderly in nursing homes.

Bevin said people covered by Medicaid should expect no major changes this year while he seeks permission from federal officials to restructure the program for 2017 to include more cost-sharing by consumers, such as co-pays or premiums.

Bevin's statement said further that details on changes to kynect will be available as Kentucky officials continue discussions with the Centers for Medicare and Medicaid Services.

In other news related to Kentucky's Medicaid program, Lisa Lee, the Medicaid commissioner appointed by Beshear, has resigned.

Ditto said the administration is seeking a new commissioner for the program that covers about 1.3 million people in Kentucky.

Reporter Deborah Yetter can be reached at (502) 582-4228 or dyetter@courier-journal.com.