8 Reasons Kentucky Shouldn’t DisKynect

Kynect, the state’s health insurance marketplace created under the Affordable Care Act, is widely viewed as a national model for its functionality and success in getting people signed up for health coverage.

Here are some of the major reasons Kentucky should keep Kynect rather than shutting it down and transitioning to the federal exchange over the next year:

Kynect works really well.
Unlike the federal exchange, the designers of Kynect created a simple and user-friendly system that from the beginning proved effective in getting people signed up for coverage. Kynect has won several national awards and Kynect Executive Director Carrie Banahan was named one of Governing magazine’s public officials of the year in 2014. Other state exchanges and the federal exchange have sought advice from Kynect because of the success of its design and operations.

Kynect was built with the input of a wide range of stakeholders and is tailored to Kentucky needs.
Kynect was created with the involvement of in-state providers, hospitals, consumers, businesses and insurers. It was designed with Kentucky’s unique health, regional and economic needs in mind. Kentucky stakeholders will lose oversight of the exchange they now have if the state shifts to the federal exchange.

It’s expensive to shut Kynect down.
It will cost Kentucky $23 million in information technology costs alone to shut down Kynect according to state officials. Those added costs will come as the state builds interfaces with the federal exchange and delinks from Medicaid. Though federal dollars went into setting up Kynect, those start-up costs are paid for and Kynect can be sustained going forward by a one percent fee on state insurance policies. If we switched to the federal exchange, there will be a fee of 3.5 percent on policies offered in the exchange.

Transitioning to the federal exchange will be disruptive.
Current Kynect participants will have to apply and re-enroll at healthcare.gov. Depending on eligibility status, applications will have to be shuttled between the state’s Medicaid program and the federal exchange on an ongoing basis. Without one integrated system, determination could take months, according to state officials, and many consumers may have to enter application information twice. Insurers will also face regulation at two levels.

A federal exchange will lack the effective outreach efforts Kynect has built.
Kynect has built an effective network of community-based outreach partners that have been essential to the state’s success in increasing coverage. In 2014, they held more than 3,000 enrollment, education and outreach events throughout the state, and Kynect has designed state-specific strategies to communicate with hard-to-reach populations. Funding for outreach would be cut by 75 percent if Kentucky moved to the federal exchange, which would only conduct generic national marketing. The leading states in insurance gains are those that have both expanded Medicaid and set up a state-based exchange.

Switching will cost Kentuckians’ jobs.
Kynect employs 30 people directly and another 175 at a call center located in Kentucky. The federal exchange is staffed by call centers spread across 10 states.

It’s unclear what health insurance choices Kentuckians will have under the federal exchange.
Even with the failure of the Kentucky Health Cooperative, plan choices have increased under Kynect and in this year’s open enrollment period participants have choices offered by seven insurers. It’s uncertain which state insurers would participate in the federal exchange.

Lower enrollment will cost Kentucky more in uncompensated care.
If fewer Kentuckians end up with health insurance because of challenges with switching to the federal exchange, hospitals and other providers will again end up spending more on uncompensated care, after having cut those costs by more than half due to the Medicaid expansion and Kynect.

3 Industries Affected Most by Kentucky’s Medicaid Expansion

Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion, Are at Risk If Program Is Scaled Back

To view this brief in PDF form, click here.

Many thousands of Kentuckians who work low wage jobs at restaurants, on construction sites, through temp agencies and at retail stores are among those who have gained health insurance because of Kentucky’s decision to expand Medicaid, newly-available Census data show. These workers’ access to care is at risk if Kentucky takes steps backward on the expansion, potentially harming our economy and the health of our state.

More than 73,800 low-wage Kentucky workers whose family incomes make them eligible for Medicaid under the expansion gained health insurance in 2014, according to the data. Workers make up the majority of the 137,220 Medicaid-eligible adults who gained coverage. Because the Census data was collected monthly from January through December 2014, it doesn’t reflect the full extent of coverage gains from Medicaid expansion to date, which total approximately 400,000.

The biggest industries where workers gained health coverage are as follows (see chart for full list):

  • Restaurant and food services, where 14,620 workers gained coverage. Whereas in 2013 (before expansion) 58 percent of that industry’s workers whose family incomes were low enough for Medicaid eligibility after expansion were uninsured, only 25 percent were uninsured in 2014 1.
  • Construction, with 5,920 workers gaining health insurance and an uninsured rate that fell from 63 percent to 32 percent.
  • Temp agencies, with 4,690 workers gaining health insurance and an uninsured rate that fell from 68 percent to 25 percent.

Kentucky led the nation in 2014 in its drop in rate of uninsured 2. While most of the adults gaining insurance are working, they are in jobs that do not offer them affordable coverage. The share of Kentucky workers who receive health insurance through their employer has gradually fallen over the decades from 70 percent in 1980-1982 to only 53.7 percent in 2011-2013 3. Medicaid and access to private insurance with the help of tax credits through Kynect, the state’s marketplace, are helping fill the gaps for workers.

Kentucky ranks near the bottom on many health measures, making our decision to expand Medicaid that much more important 4. Thousands more Kentuckians are getting the preventive care that can keep them healthy and on the job. Many of the workers who have gained coverage are people we encounter on a daily basis at restaurants, grocery stores, nursing homes, child care centers and more. Their ability to go to the doctor when sick also helps the rest of the state stay healthier.

 

  1. Report looks at citizens ages 19 through 64 in families with income at or below 138 percent of the federal poverty line who have worked within the past twelve months. Citizens are the focus because the Medicaid expansion is generally unavailable for non-citizens.
  2. US Census Bureau, “Health Insurance Coverage in the United States: 2014,” September 2015, http://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-253.pdf.
  3. Economic Policy Institute analysis of Current Population Survey March supplement.
  4. Kentucky’s overall health ranks 47th among states in the United Health Foundation’s American’s Health Rankings, http://www.americashealthrankings.org/KY.

Many Thousands of Kentucky Workers At Risk of Losing Coverage if Medicaid Expansion is Changed

For Immediate Release:

New U.S. Census data shows many thousands of Kentucky workers are at-risk of losing health coverage if changes to Kentucky’s Medicaid expansion occur, as detailed in a new brief by the Kentucky Center for Economic Policy.

Low-wage workers in a wide array of industries, including restaurants, construction, temp agencies and retail stores have gained health coverage due to Kentucky’s decision to expand Medicaid to 138 percent of the federal poverty line. The Census data shows 73,800 more low-wage workers who were eligible for Medicaid expansion were covered in 2014 than the prior year and workers were the majority of the low-income adults who gained coverage.

Changing from the current model to a waiver-based approach designed to make it harder for low-income people to get and keep coverage will put these workers at risk.

“Contrary to belief, those covered by Medicaid expansion do have ‘skin in the game’ as many are hard-working Kentuckians who weren’t offered coverage or couldn’t afford coverage provided by their employer,” Kenny Colston, communications director for the Kentucky Center for Economic Policy, said. “Trying to change Kentucky’s Medicaid expansion could leave many thousands of hardworking Kentuckians without coverage. We shouldn’t try to break a working system.”

While most of the adults gaining insurance are working, they are in jobs that do not offer them affordable coverage. The share of Kentucky workers who receive health insurance through their employer has gradually fallen over the decades from 70 percent in 1980-1982 to only 53.7 percent in 2011-2013. Medicaid and access to private insurance with the help of tax credits through Kynect, the state’s marketplace, are helping fill the gaps for workers.

Kentucky ranks near the bottom on many health measures, making our decision to expand Medicaid that much more important. Thousands more Kentuckians are getting the preventive care that can keep them healthy and on the job. To see the full research on how expanded Medicaid has helped Kentucky workers, click here.

For more information, contact Kenny Colston at kcolston@kypolicy.org

Newly Elected Kentucky Governor May Roll Back ACA

Close Look at Employment Numbers Shows Need for More Jobs

There’s a big inconsistency between Kentucky’s declining unemployment rate — now at five percent, the lowest level since 2001 — and the fact we still have many fewer people employed as a share of the population than before the Great Recession hit in 2007. This issue came up in the election and can be seen in the stark difference between the two graphs below — the unemployment rate shows full recovery from the recession, while according to the employment to population ratio things are still getting worse.

Those defending the unemployment rate as better reflecting the strength of the economy will say the difference between the two graphs can be explained by demographics. The baby boomer population is beginning to retire and that’s shrinking the labor force, which is not accounted for in the employment to population ratio (which counts people whether they are looking for a job or not). And the trend of aging baby boomers is undeniable.

But a close look at the numbers shows many working age people still missing from the labor force.

Monthly Unemployment Rate

Source: Bureau of Labor Statistics, Current Population Survey.

Unemployment to Population Radio

Source: Bureau of Labor Statistics, Current Population Survey.

That can be seen by looking at the employment to population ratio of prime age workers — those ages 25 to 54. One economist calls that measure the “desert island” statistic (the one you want to take with you to a desert island), because in many ways it’s the best indicator of the strength of the employment situation currently. An aging baby boomer population is factored out.

By that measure, Kentucky is still far from full recovery and substantially behind where we were before the recession, as seen in the graph below. In the third quarter of 2007, 75.9 percent of Kentucky prime age workers were employed compared to 69.6 percent in the same quarter of 2015. That difference of 6.4 percentage points is equal to about 110,000 fewer people with jobs (for comparison: Kentucky lost about 120,000 jobs in the Great Recession).

Unemployment to Population Radio 3rd Q

Source: Economic Policy Institute analysis of Current Population Survey microdata.

In fact, Kentucky has the second-worst prime age employment-to-population ratio in the country, lower than every other state but West Virginia.

Prime Age Table

Source: Economic Policy Institute analysis of Current Population Survey microdata.

So an aging baby boomer population can’t fully explain why a smaller share of people have jobs than before the recession despite our low unemployment rate. There are a variety of reasons workers between 25 and 54 might not be working or seeking work — they could be in school, caring for children or dealing with health problems. They could face significant barriers to work, like lack of access to affordable child care, family leave or transportation, or a criminal record that makes many employers unwilling to consider them.

But in the current context, there’s also the simple challenge that there still aren’t enough jobs available, especially in certain parts of the state. Kentucky as a whole has only two percent more jobs than it had before the recession hit eight years ago with an adult population that is five percent larger. An extended shortage of jobs has led some workers to become discouraged. Many would likely be willing to re-enter the labor market if more jobs were available, just as they did in much bigger numbers in the early part of last decade.

The talk about jobs in Kentucky shouldn’t be too quick to celebrate victory on the recovery. The lack of jobs persists and more must be done to increase those numbers. If the conversation was in touch with reality, we would be talking about expanding public investment — especially at the federal level — in infrastructure, land remediation, human services and more as part of a strategy to drive our economy back to truly full employment.

Child Care Workers’ Pay Is Not Enough

Child care plays a critical role for ensuring families can work and helping children get a healthy start to their developmental process. In Kentucky, it’s also responsible for $810 million in economic activity and over 26,000 jobs. However, as detailed in a new study by the Economic Policy Institute (EPI), pay in the industry is low, affecting the quality of care available and the well-being of child care workers.

According to the study, most child care workers are 23 – to- 49 years old and have completed some college. The overwhelming majority (95.6 percent) are women.

Nationwide, child care workers earn 23 percent less on average than workers with similar characteristics in other industries. They also rarely receive benefits — only 15 percent of child care workers get health insurance through their jobs, compared to 49.9 percent of workers in other occupations. Only 9.6 percent are covered by a pension plan, compared to 39 percent of workers in other jobs.

Low pay means many struggle to get by: 14.7 percent of U. S. child care workers live below the poverty line, compared to 6.7 percent of other workers. In Kentucky, child care workers earn a median wage of only $18,621, which is less than the $25,591 a single person in the state needs for a modest yet secure family budget, according to another EPI study. Eighty-eight percent of child care workers in Kentucky don’t make enough to make ends meet where they live 1.

Child care workers with families have it hardest. Ironically, many child care workers can’t afford the cost of child care for their own kids. In Kentucky, the median child care worker needs 33.9 percent of his or her income to afford infant care.

Kentucky provides child care assistance for low-income families through the Child Care Assistance Program (CCAP). This program allows families to receive care for a co-payment depending on their income and the state reimburses the provider based on a number of factors.

However, reimbursement rates are low. The standard for child care assistance reimbursements to providers is the 75th percentile of current market rates, but Kentucky only pays providers at the 68th percentile of 2005 market rates. And the Kentucky child care market in general is depressed by the low wages of Kentucky workers paying for that care. With over 24,000 children participating in CCAP, low reimbursements further depress what Kentucky child care workers earn. CCAP is currently funded at only 70 percent of its pre-recession levels when adjusted for inflation.

  1. EPI did not measure beyond 90 percent or below 10 percent if an area was beyond those two benchmarks, and nine of the 13 areas in Kentucky were beyond 90 percent who could not afford their community’s cost of living based on what they earn.

Minimum Wage Measure Heads to Vote

Conflicting Jobs Numbers Cited by Conway and Bevin Reflect Divergence of Federal Employment Surveys in Kentucky