Gov. Matt Bevin
Gov. Matt Bevin

Though the administration of Gov. Matt Bevin is currently working to dismantle Kentucky’s health benefits exchange — commonly known as Kynect — and transition to the federal exchange, last week the governor signed an executive order to recreate the exchange so it can continue operations until that transition is complete.

Former Gov. Steve Beshear first created the state exchange by executive order in 2012, then continued it by new executive orders in each subsequent year before its expiration, as the legislature never passed a law to approve or reject it. Beshear’s last executive order expired on July 1, when Gov. Bevin signed the new executive order breathing new life into the exchange — at least temporarily.

Bevin ran for governor in 2015 on a campaign promise to dismantle Kynect and move to the federal health benefits exchange, deeming the state exchange duplicative and a waste of taxpayer dollars. Shortly after being sworn into office, Bevin notified the U.S. Department of Health and Human Services of his intention to do so, and the federal agency replied with a letter outlining the steps that must be taken before open enrollment begins this fall.

HHS told the Bevin administration in January that they must provide “a detailed plan for how Kentucky will continue to meet its obligations” for the exchange through 2016, “including having the eligibility and enrollment functionality to process changes in circumstances or special enrollment periods for 2016 current and new enrollees.”

Bevin’s spokeswoman Amanda Stamper tells IL that they “continue to meet all major milestones and are on track to transition to healthcare.gov for open enrollment this Fall,” but the executive order on July 1 was issued “to continue necessary operations while we continue the transition.”

Bevin’s order — recreating the Kentucky Office of Health Benefit and Information Exchange and its accompanying advisory council — makes this purpose explicit, saying Kentucky “has a continued interest in continuing to enhance and create a health information exchange to improve patient care coordination.” Bevin now will appoint members to the advisory council, but Stamper says Carrie Banahan will remain as the executive director of the health benefit exchange.

kynectEmily Beauregard, the executive director of advocacy group Kentucky Voices for Health, thinks Bevin’s order reinstituting the state exchange was “pretty standard and mostly a technicality” and was happy to see that he is maintaining the advisory board, though eager to see what members Bevin appoints to it. She added that while many assume this was only a temporary order until the move to the federal marketplace is complete, in practice it is not.

“It seems ironic, but Gov. Bevin has actually chosen to maintain a state-based marketplace in Kentucky,” says Beauregard. “The only real difference is that about 100,000 Kentuckians will purchase their commercial health insurance plans on healthcare.gov. But Kentucky will maintain most of our responsibilities in terms of operating a state marketplace, including a very high-tech online enrollment system (Benefind) for the more than 1.3 million Kentuckians who are eligible for Medicaid.”

Jim Waters, president of the free-market think tank Bluegrass Institute, had previously joined other conservative activists and Republican leaders in calling Beshear’s previous orders establishing Kynect unconstitutional. Though he still has that opinion, Waters says this situation is “a kind of darned-if-you-do, darned-if-you-don’t for Bevin,” as he has to carefully dismantle Beshear’s previous moves while not harming people’s insurance coverage during that transition.

“Gov. Bevin certainly had the right to dismantle these programs immediately even though the transition to the federal exchange is not complete, and certainly fiscal conservatives are expecting that to happen,” says Waters. “But it’s hard to unscramble an egg — especially one this big… Rather than bounding like a bull through the china shop, the governor and his administration appear to be thoughtfully and strategically addressing this issue while still moving in the right direction. There has been movement in the right direction, but that movement must continue until the job is complete.”

Again stating that the various programs of the state exchange “certainly remain just as unconstitutional as they were the day Beshear bypassed the legislature and created them by executive order,” Waters added that “Bevin has demonstrated in other policy areas his commitment to moving towards a constitutional government.”

Audrey Haynes — a board member of Save Kentucky Healthcare, a group created by Beshear to challenge Bevin’s effort to roll back his health care reforms — also reiterated that there are no significant changes to the exchange from Bevin’s order, and the governor had little choice but to do so until HHS gave clearance to join the federal exchange. Haynes, who was secretary of the Cabinet for Health and Family Services under Beshear and a key player in the formation and administering of Kynect, says that Kentucky’s exchange has been a national model and it would be “a shame” to throw it away.

“We already know some health insurance providers are not going to be participating on the federal exchange, so consumers are going to have fewer choices,” says Haynes. “It’s a shame, but it’s not my decision.”

While the Bevin administration works to finalize the transition to the federal exchange on healthcare.gov, he still is seeking public comment on his waiver proposal to HSS that would transform Kentucky’s Medicaid system — requiring premium payments from able-bodied adults in order to have coverage and various work and education requirements to gain additional coverage such as dental and vision benefits. While still describing this as a “negotiation process,” Bevin has said he would scrap expanded Medicaid in Kentucky if HHS rejects his waiver proposal — which could end such coverage for nearly 500,000 Kentuckians with an income less than 138 percent of the federal poverty level.

Joe Sonka

Joe Sonka

Joe Sonka is a staff writer at Insider Louisville focusing on government, politics, education and public safety. He is a former news editor and staff writer at LEO Weekly and has also freelanced for The Nation and ThinkProgress. He has won first place awards from the Louisville Metro chapter of the Society of Professional Journalists in the categories of Health Reporting, Enterprise Reporting, Government/Politics, Minority/Women’s Affairs Reporting, Continuing Coverage and Best Blog. Email him at [email protected]