Outgoing Kentucky Governor Defends State’s Obamacare Initiatives

Kentucky Gov. Steve Beshear defended his expansion of Medicaid under the Affordable Care Act on Friday, along with the creation of the state’s online health insurance marketplace, urging Gov.-elect Matt Bevin to leave both initiatives intact.

Earlier this month, Bevin, a Republican businessman, defeated his opponent, the state’s Democratic Attorney General Jack Conway, by a nearly 9-percent margin. During the campaign, Bevin voiced support for altering the Medicaid expansion. He argued that, in its current form, the program, which provides access to health insurance for the poor, is unaffordable for the state. He also pledged to dismantle the health insurance marketplace, called Kynect, in favor of transitioning residents onto the federal healthcare exchange.

“Contrary to what people without facts say, the facts show we can afford this,” Beshear said of the Medicaid expansion during a news conference in Frankfort.

On the topic of Kynect, the two-term Democrat added: “It’s inconceivable to me why, just to make a partisan political statement, Kentucky would want to go backward and become the first state to decommission a successful exchange.”

Beshear said that dismantling Kynect, and linking it to the federal insurance exchange would cost $23 million, while laying to waste the $283 million in federal grants used to build the system.

The governor also said that although the cost of the Medicaid expansion would require about $257 million in state funds over the next two years, the state was saving money on expenses that the federal government was now covering, while also seeing new revenues from growth in the healthcare industry, and from assessments managed care organizations pay to the state. These organizations provide services to Medicaid recipients.

All told, the revenue and savings add up to about $557 million, meaning that the state is coming out ahead by roughly $300 million, according to Beshear.

“I am encouraging this incoming administration to look at the data, just look at the facts,” he said. He also looked beyond the budget math and said: “If you want to talk about it in religious terms, it’s the Christian thing to do as well.”

In the election, Bevin drew support from conservative Christian voters.

A report the consulting firm Deloitte issued in February notes that, beginning in 2021, Kentucky’s spending on Medicaid will begin to exceed revenues and savings, due in part to increasing enrollment and a decreasing percentage of federal matching funds.

At a Nov. 6 press conference, Bevin said his administration would not look to “make draconian moves,” or to “upset the applecart” when it comes to healthcare. But he stressed that with Medicaid “there is not going to be a continuation of enrolling people at 138 percent of the federal poverty level. That is not going to happen.”

After the onset of the Affordable Care Act, average total enrollment in Medicaid, and the accompanying Children’s Health Insurance Program, climbed by about 530,000 in Kentucky to around 1.1 million, an increase of about 87 percent, according to figures published in August by The Henry J. Kaiser Family Foundation.

Under the Affordable Care Act, in states that expand Medicaid, adults earning up to 138 percent of the federal poverty level can access benefits through the program. In 2015, that income threshold was $16,242 per year for an individual. The federal government has committed to picking up the Medicaid expansion costs through 2016. After that, the federal share of the costs gradually decreases until it reaches 90 percent in 2020. States that expanded the program will be left to pay the difference not covered by the reduced federal payments.

Bevin has expressed interest in obtaining a federal waiver similar to the one granted to neighboring Indiana. A key element of Indiana’s program under the waiver is that it establishes monthly contributions for Medicaid recipients, capped at 2 percent of income, or $27 per month for a single person earning 138 percent of the federal poverty level.

Four other states have obtained waivers from the federal government that allow more leeway with Medicaid. They include Arkansas, Iowa, Michigan and Pennsylvania.

As of early November, 30 states and the District of Columbia have expanded Medicaid under the Affordable Care Act, according to the Kaiser Family Foundation. Another 19 have chosen not to adopt the expansion at this time, while it remains under discussion in Utah.

During an interview last week on WYMT-TV’s Issues & Answers, Bevin restated his intention to pull the plug on Kynect and argued that fewer than 2 percent of Kentuckians use the exchange.

“Kynect is Obamacare and it’s a disaster, it’s not working,” he said. “We as taxpayers should not pay for Obamacare twice. We can get at the federal level exchange everything that is offered at the state level exchange, and that’s what we’ll do.”

There are currently 13 state-based health insurance marketplaces in the U.S. Insurance buyers in other states apply for and enroll in coverage through the federally-run, HealthCare.gov.

To help make his case on Friday, Beshear, and Lt. Gov. Crit Luallen, pointed to a number of indicators they said were promising signs the state’s health policies were working. For instance, the fact that now over 90 percent of Kentuckians have health coverage, smoking rates in the state have declined, and preventative medical screenings have gone up.

Beshear said that he had spoken with Bevin since the election, but that the governor-elect had not made any promises about health policy.

Asked what it meant that Bevin had won the governor’s race while championing changes to the state’s health care initiatives, Beshear, who is leaving office because of state term-limits, said: “I don’t think you can draw a direct line between who somebody votes for and some issue.”

“There’s just so much involved,” he added. “Some people pay a lot of attention, others pay very little attention to politics . . . That game’s over now.”