Beshear defends Kynect and Medicaid, asks Bevin to ‘look at this from a business standpoint, if not from a human standpoint’

By Melissa Patrick
Kentucky Health News

Armed with data and an unusual dose of emotion, outgoing Gov. Steve Beshear urged Gov.-elect Matt Bevin to reconsider his positions and keep the state’s Medicaid expansion and insurance exchange during a Friday news conference at the Capitol.

His voice cracking, Beshear said, “For the health of our families, the future of this state, we cannot throw away the progress we have made and start over, just to make a political point. This is not about President Obama. This is not about Steve Beshear. It is about the people of Kentucky, improving their health, improving a stronger workforce, growing our economy.”

Bevin said during his campaign and his post-election news conference that he would dismantle the Kynect exchange and shift clients to the federal exchange because “It is a redundancy that we as taxpayers in this state are paying for twice.” Kynect is funded by a 1 percent fee on all Kentucky health-insurance policies; the federal exchanges levies a 3.5 percent fee on its policies.

After first saying he would abolish the expansion of Medicaid to those with incomes up to 138 percent of the federal poverty line, which covers 400,000 people, Bevin has said he plans to apply for a federal waiver to require clients to have some “skin in the game” through premiums, co-payments, deductibles or health savings accounts. He has suggested that the income limit could be lowered, but no state has been allowed to do that.

Beshear said, “During election season the political rhetoric tends to be strong and the promises bold. But the fun and games are over, and it is time to get serious.”

In his plea for Bevin to reconsider, Beshear said there are only two factors to consider about the health reforms in Kentucky: are they working and can we afford them? He and Lt. Gov. Crit Luallen said they are working, and the state can afford it: “That answer is just as clear and just as definite, provided you put unsupported opinion and ideology aside and look at facts and figures.”

Beshear said getting rid of Kynect, which has been called a national model, makes “no sense.” He said, “It is inconceivable to me why, just to make a partisan political statement, Kentucky would want to go backward and become the first state to decommission a successful exchange. . . . It would be stupid to turn our backs on it because it would lose us money.”

He said moving to the federal exchange would waste the $283 million in federal grants used to create Kynect; would cost at least $23 million in Kentucky tax funds to dismantle it; would take away Kentucky’s oversight; would add months of delay and duplication to the process; and would get rid of the locally responsive Kynectors, located in every county, and replace them with a customer service team that is located “hundreds of miles away.” He said health-care providers, insurance companies and other business interests (including the Kentucky Chamber of Commerce) want to keep Kynect.

On Medicaid, Beshear said a waiver wouldn’t have much effect on the program’s costs, and said there is another side to the “skin in the game” argument.

“If I’m only making $30,000 a year and I’m supporting a
family of four and everybody’s well right now and I can take $30 a month
or $50 a month that I would have to pay in in order to be covered here
and use it to feed my family or buy the textbooks that our kids need to
go to school, people are tempted to say, ‘Well, I really don’t need this
health care right now. I need this money to support my family’,” Beshear said.

The governor tried to contradict Bevin’s assertion that the Medicaid expansion is “unsustainable.” The federal government pays the full cost of the expansion through next year. In 2017, states will pay 5 percent, rising in annual steps to the law’s limit of 10 percent in 2020.

Beshear walked the audience through experts’ estimates of how the expansion would more than pay for its estimated $257 million cost in the next two-year budget: $265 million in state General Fund savings for services that the federal government now covers under the expansion; $246.8 million in additional revenue from new jobs and taxes created by expanding the health industry; and $45.7 million in “restricted fund” revenue, from a new 1 percent assessment on Medicaid manage-care organization and insurance companies. He said the expansion will net the state $300 million that is sorely needed for other programs in the state.

Beshear cited the Deloitte Consulting study that used data from 2014, the first full year of the expansion. The report said the expansion created 12,000 jobs and generated at least $1.3 billion in payments to health-care providers, a number that has risen to $2.9 billion through July 2015. The study predicted the expansion would add $30 billion to Kentucky’s economy and have a positive budget impact of $820 million over eight years for state and local governments, even after the state match for Medicaid cost is phased in, Beshear said.

Beshear said that by improving the health of Kentuckians, the expansion is also improving their quality of life, economic capacity, worker productivity, school attendance and even the state’s public image.

“The more we improve our health and the more we improve our economy, the less we will need to rely on programs like Medicaid,” he said. “This is a long-term plan for improving Kentucky, but you won’t see it if you are blinded by short-term political ambitions or concerns.”

He encouraged Bevin to look at other Republican governors, like Ohio Gov. John Kasich, who have gone against most of their party colleagues to expand Medicaid.

“At the end of the day, folks, we have to pull important policy decisions out of the vat of corrosive acid called partisan politics and we all have to answer for how we treat each other,” he said, calling on Bevin to “look at this from a business standpoint, if not from a human standpoint.”

Beshear said he and Bevin have met privately once since Bevin was elected and had agreed to not publicly share details of the meeting, but did say that he encouraged Bevin and his aides to “just look at the facts” as well as what is best for the people of the state.

“My impression is that he’s willing to look at the data and look at the facts, and you know, he made no promises one way or another,” Beshear said. “But he’s a business guy and he’s used to looking at facts and figures and that’s what I would encourage him to do.” (For video clips of Beshear’s press conference, from cn|2, click here.)

In reply, Bevin spokeswoman Jessica Ditto said, “Governor-Elect Bevin has laid out a health-care vision for Kentucky that will encourage personal responsibility and focus on expanding access to quality, affordable health care coverage. His administration will move forward in addressing Kentucky’s health-care needs in a deliberate and thoughtful fashion, consulting with Kentucky’s health-care stakeholders, his Cabinet appointees and the General Assembly.”

Republican Senate President Robert Stivers said in July that the legislature would decide the shape of the Medicaid expansion, and said after the election that his staff had consulted with its counterparts in Indiana about that state’s expansion.

Sharing the stage with Beshear was Luallen, chairwoman of Kyhealthnow, a program Beshear created in 2014 to set seven major health goals and reach them by 2019. She said improving Kentuckians’ health must remain a priority.

“On this issue, we simply cannot afford to go backward,” Luallen said. “This is a once-in-a-lifetime opportunity to change the future of Kentucky. We have demonstrated that improving the health of our people is affordable. It’s time to move the discussion from saving money to saving lives.”

Luallen shared the final progress report from the kyhealthnow initiative, including:

  • More than 90 percent of Kentuckians now have access to health coverage. The uninsured rate has fallen to 8.5 percent from 20.4 percent, the largest drop in the nation.
  • More Kentuckians are using their coverage for preventive services, with the number getting preventive dental care and breast and colon cancer screenings doubling from 2013 to 2014.
  • Adult smoking rates have only decreased slightly, to 26.1 percent from 26.5 percent. Youth smoking has dropped to about 17 percent, from about 18 percent.
  • Kentucky’s adult obesity rate has dropped to 31.6 percent from 33.6 percent, causing Kentucky’s ranking to drop to 12th from fifth in the 2015 State of Obesity Report. 
  • There has been a drop in cancer and cardiovascular deaths.

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