Beshear issues executive order funding insurance exchange with fees on insurers, originally used to fund high-risk pool

Gov. Steve Beshear has filed another executive order
to continue the state health-insurance exchange he created under federal health reform, “again sidestepping state lawmakers who have blasted Beshear
for moving forward without their approval,” Matt Young writes for the Lexington Herald-Leader.

“This year’s directive says the exchange will
generate enough revenue to fund itself beginning Jan. 1, 2015, when
federal funds to create the exchange run out,” Young reports. “In 2015, the
exchange will operate on about $27 million garnered from a 1 percent
assessment placed on insurance companies participating in Kynect,” the brand name of the exchange.

The General Assembly originally approved the fees to finance the Kentucky Access program, a high-risk insurance pool that was made moot by the Patient Protection and Affordable Care Act, which requires insurers to accept people with pre-existing conditions. Beshear’s order, using his broad reorganization powers, makes Kentucky Access a division in a new Kentucky Health Care Improvement Authority to handle the money.

The General Assembly barred the use of state General Fund money to continue the exchange, but the fees go into restricted agency accounts, not the General Fund, Cabinet for Health and Family Services spokeswoman Gwenda Bond told Young.

“Senate Republicans were aware of the governor’s plan to use the fees to pay for Kynect throughout the budget process this spring,” Young writes. “In 2013, the Republican-led Senate passed two bills that would have required the governor to get legislative approval before expanding Medicaid or establishing a health exchange in Kentucky, but neither bill passed the Democratic-led House.”

Republican Floor Leader Damon Thayer of Georgetown told Young, “Governor Beshear continues to
bypass the legislature and, like his good friend President Obama, use
the executive order process to run Obamacare in Kentucky.”

Young notes that Franklin Circuit Judge Phillip Shepherd ruled in 2013 that Beshear
has the authority to create offices in the executive branch to fulfill a federal law. The ruling was affirmed by the Court of
Appeals; the state Supreme Court has not decided whether to hear the appeal.

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