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.
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.