Where Credit is Due

With only a handful of primaries remaining in the 2014 cycle, many incumbents and their opponents are gearing up for the general election in November. One of the most high profile races in the country is definitely the Senate contest in Kentucky, where five term incumbent Senator Mitch McConnell, a Republican and the Minority Leader in the Senate, is up against Democratic Secretary of State Alison Lundergan Grimes. With low approval ratings, Senator McConnell is viewed as vulnerable and has been attacked by both the left and right for his leadership since the Obama Administration has taken flight. McConnell has been Minority Leader since 2007, and has been the leader of Senate Republicans for the entirety of the Obama Era. He has clashed with the President on almost every issue imaginable, ranging from taxes to environmental regulations to foreign policy. Perhaps the defining issue of the 2014 campaign in the Bluegrass State will be the impact of the Affordable Care Act, A.K.A. Obamacare.

Although both of Kentucky’s senators are Republicans, the state has kept a Democratic governor and Democratic House. The Democrats even held the state Senate until the 2012 elections. However, with the guidance of Governor Steve Beshear, the state was able to craft a Kentucky Health Care Exchange (Kynect), in able to help the uninsured in Kentucky receive the best deal on health insurance. Compared to many other states, Kentucky has widely been viewed as a success story for the Obama Administration. It was estimated that 360,000 individuals had signed up through the Kynect exchange, and that almost 75 percent of those individuals previously were not insured. Compare that to the 2012 estimate by the Kaiser Foundation that there were 617,000 uninsured Kentuckians, and you factor in the 75 percent of the enrollees who previously were uninsured (being roughly 270,000), and you can conclude that over 40 percent of Kentucky’s uninsured population is now insured due to the exchange. This leads to a major campaign issue, since Senator McConnell has repeatedly called for the repeal of Obamacare, leading to the question of many pundits about what would happen to all of these newly insured individuals if the law is repealed.

In a surprising twist, Senator McConnell suggested that Kynect could remain intact, even if Obamacare is repealed. Kentucky’s other senator, Rand Paul, has also suggested that it will be up to Kentuckians if they choose to keep Kynect or not, regardless of what happens to the federal law. The problem is there is very little evidence that Kynect would be able to function at all without Obamacare, for two primary reasons:

  1. The Medicaid expansion- A significant portion of the uninsured population in Kentucky benefitted from the decision to expand Medicaid in the state, some estimates as high as 80 percent of the newly insured by Kynect comes from Medicaid. The funding to expand the state’s Medicaid program came directly from the federal government, under provisions of Obamacare. The state would need to find a new source of revenue in order to maintain the expansion, since the federal government currently covers 100 percent of the cost of expansion until 2017. To maintain the program without the law would require billions of dollars, which would need to be raised through increases in state taxes, along with cutting other programs. Even then, it isn’t certain that the costs would be covered.
  2. The subsidies- While a majority of those through Kynect were eligible for Medicaid, there were still thousands of residents who chose to purchase private plans, with the help of a subsidy from the federal government. Without these subsidies, many of these plans would be unaffordable for the individuals who bought them, increasing the likelihood that these individuals drop their plans and become uninsured again. Once more, the state of Kentucky would need to find more funds to maintain the subsidies if they wanted to keep the newly insured individuals on their plans.

The bottom line is the cost of maintaining Kynect without federal funding is enormous. It would be virtually impossible for the state to keep their current version of Kynect, which has been very successful I might add, without the help of the funding provided by Obamacare. Senators McConnell and Paul both are incorrect to assume that Kentucky could just easily keep their exchange if they choose to repeal the law that funds the entire exchange! This shows a lack of credibility by Senator McConnell, who has repeatedly criticized the law as being bad policy, despite the success in his own state.

I will concede that some states were not as successful as Kentucky with their state exchanges. Oregon completely failed and will be turning over control to the federal government. Maryland, Massachusetts, and Nevada also appear to have failing exchanges that might be handed over to the federal government. The structure of the entire health care law does hold flaws, yes. However, if criticism will be given, credit is due as well. Kentucky’s exchange program is a near perfect model of a state run exchange, made possible by the leadership of Governor Beshear and the funding by the federal government. Yet, Senator McConnell ignores this success and continues to voice only his dissatisfaction with the law, going as far as somehow attempting to disassociate Kynect from Obamacare all together. This instance, more than anything else so far in his re-election campaign, shows that Senator McConnell is out of touch, misinformed about the impacts of legislation on his own state.

 

Peter

http://www.politico.com/story/2014/05/obamacare-cost-failed-exchanges-106535.html

http://kff.org/interactive/uninsured-gap/

http://kff.org/other/state-indicator/total-population/#map

http://www.courier-journal.com/story/news/2014/03/31/kentucky-urges-kynect-sign-ups-deadline-nears/7116229/

http://www.msnbc.com/rachel-maddow-show/the-kentucky-case-study

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2013/Dec/1718_Glied_how_states_stand_gain_lose_Medicaid_expansion_ib_v2.pdf

http://obamacarefacts.com/obamacares-medicaid-expansion.php

http://migration.kentucky.gov/NR/rdonlyres/611A39A2-740F-45C2-B715-2F36F3C6AC96/303412/PDFFactSheetonMedicaidExpansion5913.pdf

http://talkingpointsmemo.com/dc/mitch-mcconnell-wavers-on-obamacare

http://talkingpointsmemo.com/livewire/rand-paul-kynect-obamacare-mitch-mcconnell

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