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Kentucky's New Governor Could Change the Terms of Medicaid Expansion

Mary K. Caffrey
Departing Governor Steve Beshear's full embrace of the Affordable Care Act brought health coverage to 500,000 people in Kentucky, including many who had never had insurance. Preventive services increased by more than 100%.
The nation’s biggest success story under the Affordable Care Act (ACA) will turn a page early next year, after Republican Matt Bevin declared victory last night to succeed Kentucky Governor Steve Beshear. By all accounts, the change is likely to bring a rethinking of Kentucky’s approach to Medicaid expansion, which has created the nation’s steepest drop in the uninsured rate, down to 8.5%.

Beshear, a Democrat, faced term limits on a tenure that became defined by his decision to embrace the ACA and create a state-level exchange. Called Kynect, it brought health insurance to 500,000 people, including 400,000 through Medicaid expansion. Beshear’s administration said Kentucky’s constitution allowed him to act without approval of the legislature, and lawmakers could not find a way to block him.

As a result, thousands gained health coverage for the first time, and preventive services increased dramatically: screenings for breast and cervical cancer, cholesterol tests, flu shots, and preventive dental services are all up by more than 100%, according to Kentucky’s Medicaid office.

After Beshear’s decision, the University of Kentucky’s Markey Cancer Center gained recognition as a designated center of the National Cancer Institute, making it eligible for funding and more clinical trials to combat the state’s high death rate from the disease, especially lung cancer.

What will happen now? Initially, Bevin vowed to repeal Medicaid expansion entirely but has backed off that position. More recently, he has said he will shut down Kynect and ask enrollees to use the federal exchange. As for Medicaid, Bevin said he wants a waiver similar to one that Republican Governor Mike Pence implemented in Indiana, which imposes costs and eligibility limits on recipients.

In the waning days of the campaign, Beshear called these ideas harmful for Kentucky. Shutting down Kynect makes no sense, the current governor told ThinkProgress, because the state has already received $253 million to set up the exchange, it works well, and private insurers support its upkeep.

As for expansion, the federal government will pay the entire cost of adding households up to 138% of the federal poverty line until 2017, as it does elsewhere. Then, Kentucky will phase in payments, starting at 2% and ending with 10% in 2021. Beshear commissioned a study by Deloitte that said Kentucky’s share could someday reach $923 million, which could cause a future governor to reconsider eligibility rules But the Deloitte study said this would more than likely be offset by the federal government taking over other health costs and the creation of jobs in the healthcare sector, as well the creation of a healthier workforce.

Despite the decline in the uninsured rate and the positive national attention, even Beshear has been loath to use the term “Obamacare,” an acknowledgement that the president responsible for the ACA remained highly unpopular in Kentucky. And Bevin, overcoming earlier scrapes with the state’s top Republican, US Senate Majority Leader Mitch McConnell, used a simple strategy of linking President Obama to the Democratic nominee, Attorney General Jack Conway.

Last night, observers said Bevin, a far-right conservative, also benefited from attention to the controversy over Rowan County Clerk Kim Davis’ refusal to issue marriage licenses to same sex couples. Conway was leading in most polls heading into yesterday’s vote. It didn’t end up being close, however. Bevin won with 52% of the vote to Conway’s 44%, with independent candidate Drew Curtis taking 3%.

 
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