Politics & Government

Beshear reauthorizes health care exchange, again sidestepping state lawmakers

Gov. Steve Beshear filed an executive order Monday authorizing the continued implementation of the federal health care law in Kentucky, again sidestepping state lawmakers who have blasted Beshear for moving forward without their approval.

Beshear has filed similar orders in each of the past two years, which allowed creation of the Kentucky health insurance exchange known as Kynect, where more than 420,000 Kentuckians have signed up for Medicare or private health plans since last fall.

This year's directive says the exchange will generate enough revenue to fund itself beginning Jan. 1, 2015, when federal funds to create the exchange run out.

In 2015, the exchange will operate on about $27 million garnered from a 1 percent assessment placed on insurance companies participating in Kynect, said Gwenda Bond, spokeswoman for the Cabinet for Health and Family Services.

The fees have previously been approved by the General Assembly under the Kentucky Access program, a high-risk insurance pool that was replaced by provisions in the federal Affordable Care Act.

While the health exchange cost about $40 million to run last year, much of that was due to one-time costs associated with creating Kynect, said Audrey Tayse Haynes, secretary of the Cabinet for Health and Family Services. The cabinet expects the exchange to operate without interruption on its new $27 million budget, she said.

Money the health exchange receives from the fees does not run afoul of a provision the legislature approved earlier this year that prohibits the use of General Fund money to implement the health care law, Bond said. Instead, revenue from insurance company assessments will go into restricted agency funds that are dedicated for a specific purpose, she said.

Senate Republicans were aware of the governor's plan to use the fees to pay for Kynect throughout the budget process this spring. However, Senate Majority Floor Leader Damon Thayer said this week that the insurance fees were approved long ago, and that there is "a difference of opinion on the way the governor has implemented Obamacare in Kentucky."

In 2013, the Republican-led Senate passed two bills that would have required the governor to get legislative approval before expanding Medicaid or establishing a health exchange in Kentucky, but neither bill passed the Democratic led House.

"Governor Beshear continues to bypass the legislature and, like his good friend President Obama, use the executive order process to run Obamacare in Kentucky," Thayer said.

Beshear's actions have been validated by courts. In a September 2013 ruling in Franklin Circuit Court, Judge Phillip Shepherd ruled that Beshear possesses the authority to create offices within the executive branch in order to fulfill the requirements of a federal law. Tea Party activist David Adams has appealed the ruling, which was affirmed by the Court of Appeals. The Kentucky Supreme Court has not yet ruled on the matter.

Beshear has been praised by President Obama as "a man possessed" for his zeal in implementing the Affordable Care Act in Kentucky. At a round table last month sponsored by Enroll America, Beshear called Kynect life-changing and transformative for Kentucky. He also said that supporting the exchange "is morally the right thing to do."