It’s disappointing that Gov. Matt Bevin felt compelled to follow through on an illogical position that he staked out early in his campaign, based on limited knowledge.
Bevin’s decision to move forward with dismantling Kynect, Kentucky’s much-praised health insurance exchange, flies in the face of the classic conservative belief that state control is better than federal control.
The move will frustrate Bevin’s goal of enlarging the state’s workforce while disrupting the most competitive health-insurance market that individuals and small businesses have probably ever enjoyed in Kentucky — at a time when insurance industry mergers are shrinking competition.
Ending Kynect will be bad for business.
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Aside from the political motive of killing a Democratic success, the only practical upside for the Republican governor seems to be freeing up about $28 million in revenue that comes mostly from a fee on state-regulated health insurance policies and reinsurance companies.
The assessment pays for Kynect’s operations but was enacted in 2000 to support a high-risk pool for the previously uninsurable. (The high-risk pool never had more than 5,000 participants, while 100,000 have signed up for private, often-subsidized insurance through Kynect.)
Another downside of moving from the state to the federal exchange (Healthcare.gov.) is that more Kentuckians will be uninsured as individuals and small businesses lose the personal assistance that Kynect and its web of kynectors and insurance agents provide.
The cost of more uninsured Kentuckians does not show up as a line on the state budget, so maybe Bevin thinks it’s not his problem.
It is a problem for the rest of us. When the uninsured require medical care, providers shift the cost onto others through higher prices.
The whole point of insurance — whether private sector, government or a combination — is to share costs and risks in a rational, humane way.
Bevin seems to think that only the 85,000 Kentuckians who have signed up for insurance through Kynect in the current open enrollment should pay the exchange’s operating costs. The fee in the federal exchange is 3.5 percent, which, if Bevin gets his way, will be an added cost to Kentuckians buying insurance through the federal exchange, presumably, on top of the state’s 1 percent fee.
But all gain something valuable by supporting the exchange in a small way: the security that our insurance won’t be lost if we become sick or are seriously injured.
To launch Kynect in 2014, Kentucky spent $283 million in federal grants, money that will be wasted if Bevin succeeds in killing Kynect.
While still a candidate, Bevin wisely backed away from his vow to repeal the Medicaid expansion, which covers more than 400,000 mostly working-poor Kentuckians. In terms of getting more Kentuckians healthy enough to work, the Medicaid expansion is more important than Kynect.
So, if Bevin just had to kill one of President Barack Obama’s health-care reforms, we can be relieved it wasn’t the Medicaid expansion, even if he is giving Kentucky the dubious distinction of being the first state to shut down a successful health insurance exchange.