kynectResponding to Gov. Matt Bevin’s Dec. 30 letter notifying the U.S. Department of Health and Human Services that he plans to dismantle Kynect and transition health care consumers to the federal exchange “as soon as is practicable,” the federal agency replied in a letter on Jan. 28 outlining the steps that must be taken to do so before the enrollment period for next year begins.

Bevin campaigned last year on a pledge to end the state’s health insurance exchange and transition to the Federally Facilitated Marketplace (FFM), saying Kynect’s role was redundant and unnecessary. Though a consultant hired by the Beshear administration estimated that dismantling Kynect would cost $23 million, Bevin has argued that doing so would only cost an unspecified fraction of that amount.

In the Jan. 28 letter, HHS acting administrator Andrew Slavitt wrote that “ceasing Kynect will create a number of challenges that must be addressed to ensure that access to affordable health coverage continues for Kentucky’s consumers,” and outlined “a set of activities that Kentucky will need to immediately take to ensure a smooth transition for its consumers.”

In addition to identifying a point of contact and a team for coordinating activities among different agencies, the Bevin administration must provide “a detailed plan for how Kentucky will continue to meet its obligations” regarding the current state exchange through the 2016 plan year, “including having the eligibility and enrollment functionality to process changes in circumstances or special enrollment periods for 2016 current and new enrollees.”

The administration must also facilitate discussions between insurers participating in Kynect and the federal Centers for Medicare and Medicaid Services to ensure that those companies understand the transition activities, the 3.5 percent fee they must pay to participate in the federal exchange, and the deadlines and requirements for the submission of their qualified health plan (QHP) applications to this exchange.

While there is still much uncertainty on Bevin’s proposed transition from Kynect to the federal exchange, the deadline for QHP applications is rapidly approaching, with the window for submissions of 2017 plans occurring between April 11 and May 11.

Though Kentucky was granted $289 million through Section 1311 of the Affordable Care Act for the establishment of Kynect — and has nearly $58 million of that amount remaining — the HHS letter states that since the Bevin administration is transitioning to the federal exchange, none of these funds can be used to support ongoing operations or information technology system costs associated with this transition. While those eligible for Medicaid have been able to sign up for those plans on Kynect, they will not be able to do so on the federal exchange, meaning Kentucky will have to cover the costs of setting up its own system to enroll such individuals.

Bevin’s spokeswoman Jessica Ditto did not reply to an email from IL on their response to the HHS letter.

Emily Beauregard — the executive director of Kentucky Voices for Health, a coalition of health care advocates — told IL that many questions remain on the consequences of dismantling Kynect, including whether Kentucky will be required to pay back some of its $289 million in federal grants and if the staff of “kynectors” assisting consumers on the state exchange will be laid off. Since well over 400,000 Kentuckians found their Medicaid plan through the Kynect website, she added this “could limit access to coverage for those who need it the most.”

“(Bevin) has pledged uninterrupted access to health coverage plans, but kynect and don’t serve the same purpose for the vast majority of Kentuckians who need a way to enroll in coverage,” wrote Beauregard in an email. “Dismantling kynect will shift fewer than 100,000 Kentuckians to That means Kentucky will continue to be responsible for enrolling more than 1.3 million in Medicaid but we would no longer have kynect as our platform for doing so.”

In a state House committee last week, Rep. Jim Wayne asked Bevin administration officials if they were trying to save money by making it more difficult for individuals to enroll in Medicaid, with Bevin adviser Andrew McNeill replying that “the intent is not to throw anyone off Medicaid.” Cabinet for Health and Family Services Secretary Vickie Yates Brown Glisson said she didn’t anticipate anyone falling off the Medicaid rolls, and did not know if kynectors would keep their jobs.

The entire letter from HHS to Gov. Bevin can be read below:

HHS Kynect letter to Bevin

***** UPDATE 2/9 *****

Bevin’s spokeswoman Ditto sent IL the following statement on the administration’s reaction to the HHS letter:

“The letter from HHS is a fair representation of the expectations that were communicated to us regarding the process moving forward. We are in active and ongoing communications with CMS and are working collaboratively to ensure a smooth transition to the Federal Exchange.”

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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]