Governor Matt Bevin intends to shut down the Kentucky health insurance exchange
Kentucky lawmakers are beginning to move forward with plans to close the state’s health insurance exchange. In late December of 2015, Governor Matt Bevin sent a letter to federal officials informing them of the plan. The governor noted that the exchange will no longer be operational “as soon as is practicable.” According to federal law, this will be a year-long process, at least, and will not have an impact on the health insurance policies that were sold through the exchange for 2016.
Many consumers have found coverage through the state’s exchange
Kentucky is one of only 14 states that has chosen to operate its own health insurance exchange. Some 100,000 people have used the exchange to find the coverage that they need, with the majority taking advantage of subsidies provided by the federal government. The exchange has been responsible for a significant decrease in the state’s uninsured population, ensuring that consumers have the necessary coverage.
Exchange may not be generating the revenue it needs to continue operating effectively
Governor Bevin believes that the state’s health insurance exchange is not able to meet its financial obligations due to falling enrollment numbers. The exchange is funded by a 1% tax that is imposed on all health insurance policies that are sold in the state. Through this tax, the exchange is expected to generate only $4 million of the $27 million in needs to operate every year. Many of the consumers paying the 1% tax to support the exchange are not actually using its services, which makes the exchange a relatively costly burden for Kentucky residents.
Closure of the health insurance exchange may restrict access to coverage
Some believe that putting the state’s health insurance exchange to rest may not be a good idea. Jason Bailey, executive director of the Kentucky Center for Economic Policy, suggests that closing the exchange would be a “step backward on access to health care.” The state’s Medicaid program has been expanded, however, and it may be able to handle the needs of consumers looking for coverage in 2017.