Politics & Government

GOP state lawmaker wants Kentucky to market Kynect to other states

Ralph Alvarado
Ralph Alvarado

FRANKFORT — A Republican state senator wants Kentucky to market its health insurance exchange to other states, but the response from Gov. Steve Beshear's administration and the state's top two legislative leaders is tepid at best.

In recent weeks, state Sen. Ralph Alvarado, a physician from Winchester, has been pitching the idea of expanding Kynect to other states.

The move, he contends, could help Kentucky pay for the rising cost of Beshear's decision to expand Medicaid eligibility under the federal health care law.

Kentucky will have to start paying 5 percent of the Medicaid expansion costs in 2017, and 10 percent in 2020, he said.

Under Alvarado's plan, the state would set up and run exchanges for other states using the Kynect model.

He said he doesn't know how much money could be raised for the state, "but I feel it would be significant and should be explored."

Kynect's operating budget for this year is about $26.9 million.

Under the 2010 federal Affordable Care Act, dubbed Obamacare, states were given the choice of joining a federal insurance exchange, creating a state-based exchange or using hybrid options to create an online marketplace to shop for health insurance.

Beshear, a Democrat, chose to create the state's own exchange on the advice of hospitals, insurance companies and other business interests.

Alvarado said Kentucky now could provide Kynect to other states and charge them a lower fee than what is charged for the federal exchange.

All Kentucky insurance policies have a 1 percent assessment fee that provides the funding for Kynect. If the system were dismantled, which is a point of contention in this year's governor's race, and the federal exchange took over, that fee would increase to a 3.5 percent federal surcharge on insurance policies.

Republican gubernatorial nominee Matt Bevin has said he would get rid of Kynect and move Kentuckians to the federal health insurance exchange. Attorney General Jack Conway, the Democratic nominee for governor, argues that dismantling Kynect and moving people to the federal exchange would cost Kentuckians more.

Reaction to Alvarado's plan to market Kynect has focused on politics.

Audrey Haynes, secretary of the state Cabinet for Health and Family Services, which oversees Kynect, said Alvarado's suggestion is "not without merit and worthy of further discussion."

But, she said, "it would be difficult to market Kynect to other states as a regional exchange while some candidates and elected officials are calling for its dismantling."

House Speaker Greg Stumbo, D-Prestonsburg, said he is "glad to see that Sen. Alvarado is looking for ways to continue moving forward with what I call 'Beshearcare.'

"I know there are some questions about how a program like this would work, but I am certainly open to any ideas that would raise money to help us improve the overall health of our citizens," Stumbo said.

Senate President Robert Stivers, R-Manchester, said he has not reviewed Alvarado's proposal, "but I don't think Kynect has been that great of a success to think that anyone would want it marketed to them."

Alvarado, who was elected to the Senate last year, said it's "frustrating" that politics has entered into the discussion about marketing Kynect.

"On a personal level, I'd rather see a private insurance model rather than a federal mandate like the one we have now," he said. "But I'm looking at this entirely from a monetary issue for the state.

"I believe the state could make some money off of Kynect and use it to pay for Medicaid expansion," he said.