Highlight on Kentucky: What’s for breakfast? Country ham and a side order of Obamacare

While Kentucky’s Democrat Governor Steve Beshear and Republican U.S. Senator Mitch McConnell jousted about the Affordable Care Act (ACA) (P.L. 111-148) at the Kentucky Farm Bureau Federation’s annual Country Ham Breakfast at the Kentucky State Fair, Republican state Senator Ralph Alvarado surprisingly advocated expanding Kentucky’s successful state exchange (Kynect) to other states to help pay for Kentucky’s Medicaid expansion.

Breakfast Fun

According to Kentucky Health News (KHN), Beshear told a breakfast crowd of 1,500  that the share of uninsured Kentuckians has been reduced by 56 percent through “our aggressive embrace of federal health reform. And we’ve done so without jeopardizing our budget. Oh, I know, I know the political rhetoric you hear from health-reform opponents who say it’s costing us thousands of jobs and we’re gonna bankrupt our state. Well, as I’ve said a lot of times, everybody is entitled to their own opinion but nobody is entitled to their own facts.”

Beshear cited a state-funded study by Deloitte Consulting, which found that Kentucky created 12,000 new jobs in the first full year of health care reform, with over 40,000 new jobs predicted by 2021. Those figures, however, do not reflect job losses at hospitals, which, according to KHN, blame Medicaid managed-care companies and health reform for their layoffs.

Beshear also cited a Deloitte prediction of a positive $820 million impact over eight years on state and local governments. That prediction, according to KHN, is based upon Deloitte’s belief that the Medicaid expansion is increasing health-care payrolls and generating more tax revenue. However, KHN notes that in 2021, Deloitte said the expansion would cost more than it actually brings in.

When it was his opportunity to speak, McConnell responded that “[t]he governor and I have debated Obamacare at this breakfast the last two or three years. I’ll spare you my rebuttal other than to say higher premiums, higher co-payments, higher deductibles, lost jobs and a big bill is coming to the state government for Medicaid expansion in a couple of years.”

Success of Kynect

According to a Deloitte client spotlight, in just one year, Kentucky’s Cabinet of Health and Family Services (CHFS) and Deloitte designed and deployed Kynect, which logged over 10,000 applications for coverage in less than two days after launch and averaged 1,000 enrollments per day in the first few weeks. Since then, more than 421,000 Kentuckians have enrolled in new health coverage and 2,045 business have completed applications and are eligible to offer coverage to employees.

Exporting Kynect

At a recent legislative committee meeting, Alvarado, a physician, suggested that Kynect become a regional exchange and charge other states for its services, using the profit to pay for Kentucky’s Medicaid expansion.

According to KHN, Alvarado’s concerns are that the state will have to start paying 5 percent of the Medicaid expansion costs in 2017, rising to the ACA’s limit of 10 percent in 2020. “We are looking at about a little over one billion dollars to find between 2017 and 2021, and we are going to have to find a way to pay for that,” said Alvarado. “There are states that want a good state exchange, but haven’t been able to run one. And there are several that are about to expand Medicaid and are looking at the federal exchange. So my thought was, why not approach those states that are going to expand Medicaid, offer to do the same services that a federal exchange would do, and run the exchange for them for a fee?”

Alvarado is encouraged that there has been bipartisan support of his plan. KHN reports that Beshear’s Chief of Staff has called it a “novel idea” and democrat colleagues have said the proposal should be looked at.