Fate of health coverage through Medicaid expansion and Kynect insurance exchange could rest on outcome of governor's race

By Cheyene Miller and Anthony Pendleton

University of Kentucky School of Journalism and Telecommunications

            The fate of health coverage for about half a million Kentuckians could rest on the outcome of the Nov. 3 election for governor. Democrat Jack Conway wants to stick with the state’s embrace of federal health reform while Republican Matt Bevin does not.

            Gov. Steve Beshear expanded the Medicaid program and created an online insurance market known as Kynect. Between the 400,000 in the expansion and 100,000 private insurance plans purchased on Kynect, the percentage of people without health insurance dropped more in Kentucky than any state in the nation, from more than 20 percent to just over 9 percent, according to the Gallup Poll.

            Kentucky was the only Southern state to create its own insurance exchange, and one of only two Southern states to expand Medicaid, along with Arkansas.

Beshear is on his way out of the governor’s mansion, however, and his possible successors have two drastically different stances on the Patient Protection and Affordable Care Act, also known as Obamacare.

Conway’s stance throughout the race has been to keep what is arguably one of the greatest accomplishments of his fellow Democrat, while Bevin has promised to dismantle Obamacare in Kentucky, albeit with an inconsistent stance on the Medicaid expansion.

Bevin told reporters in February that he would immediately end the expansion, but in July he denied saying that and started talking about seeking a federal waiver to receive Medicaid money in a grant and create a system resembling Indiana’s, in which Medicaid beneficiaries pay premiums to get better benefits.

“We can’t afford the current structure as it exists,” Bevin said in September. Beshear questioned Bevin’s knowledge of the system, and said the non-partisan Congressional Budget Office found that such waiver plans “will likely cost more than the expansion as we have implemented it in Kentucky.”

Bevin has said a waiver might allow Medicaid to offer some help to people with incomes above 138 percent of the federal poverty level, perhaps by helping them with health savings accounts.

Before the expansion, only Kentuckians with household incomes at or below 69 percent of the federal poverty level qualified for Medicaid. The expansion doubled that to 138 percent of poverty.

The federal government is paying the full cost of the expansion through 2016, at which point Kentucky would start paying 5 percent of the cost, rising in yearly steps to the law’s limit of 10 percent in 2020. By the 2020-21 fiscal year, the expansion is expected to cost the state $363 million a year.

A state-funded study by Deloitte Consulting predicted in February that the expansion will generate enough jobs and tax revenue to pay for itself through 2020, but Bevin has called the study “nonsense.” Conway has cited the study in saying he supports the expansion but would monitor its costs.

In his speech at the Fancy Farm Picnic in August, Conway said Kentuckians should vote for a candidate who “understands that the truly Christian thing to do is to say that we are our brother’s keeper and health care for our people makes us a healthier and better society.”

            The candidates are playing to their bases Bevin by taking a stance against Kynect and the Medicaid expansion, and Conway by following the footsteps of Beshear in supporting it, University of Kentucky political science professor Stephen Voss said.

“They’ve already managed, without saying very much, to give that basic signaling that each side wanted to hear from them,” said Voss, adding that both candidates are also doing their best to remain vague when discussing health care: “For both candidates, delving more deeply into the specifics is fraught with risk.”

Bevin has been more consistent with his stance on Kynect, saying he would "facilitate the transition of enrollees" onto the federal exchange as he dismantles Kynect. In September, Bevin said he would consider a suggestion from Republican state Sen. Ralph Alvarado to keep Kynect operating and finance it by expanding it to other states, but he was skeptical of the idea.

            Lexington-based litigation attorney Douglas McSwain, who specializes in constitutional and health-care law, said Kynect is one of the reform law’s biggest success stories nationwide. “The main issue is that health-care reform has been a very good success under the Beshear administration,” McSwain said.

Kynect is funded by a 1 percent assessment on all Kentucky health-insurance policies, while the federal fee is 3.5 percent on policies sold on the exchange.

Independent candidate Drew Curtis has said the state can probably afford the first round of expenses from the Medicaid expansion, and should leave it and Kynect “alone as it is” until the state sees the long-term effects. “You can’t drop a massive system change on people, and (then) do it again in two years,” he said.

Kynect Director Carrie Banahan has said that Kynect would cost at least $23 million to dismantle and that most of the seven insurance companies using it would probably not go to the federal exchange.

            Whoever is elected governor will likely have many obstacles on his plate regarding health care, since Kentucky is one of the least healthy states. According to America’s Health Rankings, Kentucky is 47th in overall health, with major issues facing the state including high rates of smoking and preventable hospitalizations. Kentucky also ranks first in the nation for lung cancer deaths, according to the federal Centers for Disease Control and Prevention.

Cheyene Miller and Anthony Pendleton are journalism seniors at the University of Kentucky. They wrote this story for the Covering the Governor’s Race course being taught by Associate Professor Al Cross and Journalist in Residence John Winn Miller.