Governor announces plan to return to state-based health care exchange

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FRANKFORT, Ky. (WTVQ) – Gov. Andy Beshear announced Wednesday his plan to move the commonwealth back to the successful Kynect state health care exchange.

“We have been paying more over the last four years to get less. So today, I’m announcing that I’ve submitted a declaration of intent letter to the Centers for Medicare & Medicaid Services to transition to a state-based exchange beginning Jan. 1, 2022,” the governor said during his daily briefing.

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In 2013, Kentucky implemented a state-based exchange, known as Kynect. About 500,000 newly eligible people were enrolled in Medicaid coverage and Qualified Health Plans, making Kynect one of the most successful exchanges in the nation.

However, Gov. Matt Bevin dismantled Kynect in 2017, forcing people to use the federal exchange. Beshear pointed out that Kentuckians are paying a roughly 3% user fee for that exchange, totaling $9.8 million in 2018, based on the most recent information from CMS.

Launching the state exchange will incur a one-time cost of $5 million for the system, with operating costs pegged at between $1 million and $2 million annually. He said that means the state system will save $2.8 million to $3.8 million the first year, and $7.8 million to $8.8 million annually thereafter.

“In the last four years, we moved backward in health care. The rate of uninsured and uninsured children grew,” Gov. Beshear said.

The governor claimed a state-based exchange will provide benefits beyond avoiding the federal user fees. He said the new system would offer Kentuckians a reduction in premium costs; integrate with Medicaid, offering a single door to access coverage; allow greater flexibility and autonomy than the federal system; and keep control local, putting officials in position to determine the needs of Kentuckians.

“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,” the governor said. “It also allows us greater flexibility and autonomy than the federal exchange, where we can extend the annual open enrollment period and offer special open enrollment periods. It finally offers us local control. I believe we can do this much better than the federal government. We proved that many years ago, and as we go forward, this is just going to be one part of a larger set of announcements on health care that we anticipate we will be making in August.”