Could newly elected anti-Obamcare governor in Kentucky follow the lead of Asa Hutchinson and Arkansas? | Arkansas Blog

Wednesday, November 4, 2015

Could newly elected anti-Obamcare governor in Kentucky follow the lead of Asa Hutchinson and Arkansas?

Posted By on Wed, Nov 4, 2015 at 8:35 AM

ASACARE: Kentucky's new governor could follow Hutchinson's strategy on Medicaid expansion.
  • ASACARE: Kentucky's new governor could follow Hutchinson's strategy on Medicaid expansion.

As Max noted last night
, anti-Obamacare Tea Party favorite Matt Bevin won the governor's race in Kentucky. Bevin has made noises about dismantling Kynect, the state's popular program for Obamacare coverage expansion. That could include ending the state's Medicaid expansion, which would take health insurance away from more than 400,000 Kentuckians.

Back in February, Bevin told reporters that he would "absolutely" end Medicaid expansion. "No question about it," he said. "I would reverse that immediately."  

But more recently he has hedged on the issue. Bevin now seems to be signalling interest in a strategy similar to what we have seen in Arkansas, where anti-Obamacare GOPs who swept into power kept the coverage expansion in place but are aiming to Republicanize the program by seeking federal waivers of Medicaid rules. 

The stakes are high. Kentucky has seen its uninsured rate cut in more than half since the implementation of the Affordable Care Act, the second biggest drop in the nation, trailing only Arkansas. The two states have been outliers in the red-state South in choosing to go forward with Medicaid expansion. But Obamacare politics remain dicey in Dixie, to say the least. There was a legitimate concern after the 2014 election in Arkansas that more than 200,000 of the state's low-income residents could be booted off of their coverage; there is a legitimate concern after last night about the fate of more than 400,000 low-income residents of Kentucky. But the end of expansion in Kentucky is by no means a foregone conclusion; as we know here in Arkansas, hedging politicians making anti-Obamacare noise during the campaign may not actually be willing to kick hundreds of thousands of people off their health coverage once they're in office. 

There are really two separate choices ahead for Bevin. One is whether to move the state's healthcare marketplace from the state-run Kynect to the Federally Facilitated Marketplace (that would be healthcare.gov, the enrollment portal run by the feds for states, like Arkansas, that didn't set up their own). To be clear: all states have a marketplace like this, often called a health insurance exchange. The exchanges — regulated marketplaces where consumers can shop for insurance, with subsidies available for many to help with the cost of premiums — are mandated by Obamacare. Bevin can't opt out. What he can do is insist that the federal government operate the exchange instead of Kentucky. In terms of people's coverage, benefits, and subsidies, this wouldn't change a thing. Given that Kynect has been highly successful and switching would surely create administrative hassles, it's unclear whether Bevin has any coherent policy argument for this move, but it's largely a symbolic gesture. 

The more substantive issue is Medicaid expansion (sometimes also grouped with "Kynect" since that's the name of the web portal where Kentuckians enroll both for the exchange and for Medicaid). And here, faced with the prospect of actually kicking hundreds of thousands of people off of their health insurance, Bevin has softened as we got closer to election day. 

Here's Jeff Young reporting from the Huffington Post

During his campaign, Bevin has remained steadfast in his vow to eliminate the Kynect health insurance exchange and direct Kentuckians to the federal system instead. But he has hedged on the Medicaid expansion, first saying he would end it entirely, then later suggesting he might seek unspecified concessions from federal authorities to simply scale it back instead.

"When a tea party Republican can't embrace rolling back what the Affordable Care Act has done, who can?" said [Steve Voss, a political scientist at the University of Kentucky in Lexington]. "Not even this guy is willing to go to the mat for rolling back the Medicaid expansion. To me, that's your big story."

Bevin's apparent retreat from a wholesale repeal of the Medicaid expansion isn't necessarily a sign that his opposition to Obamacare has weakened, Voss said. Rather, it may merely reflect a growing understanding of the practical impact of abruptly taking away health coverage from hundreds of thousands of people.

"There has been an educational process for him as a campaigner talking to people with Republican sympathies but who are well-versed in health care policy that suggested maybe he needed more nuance," Voss said.

By August, Bevin was saying he would seek a waiver from the federal government to make changes to the Medicaid program and that no one would be "kicked to the curb."

This will start to sound familiar to anyone who has paid attention to Arkansas politics the last few years. GOP politicians here have run against Obamacare, but when it comes to the existing coverage expansion, many have hedged by making vague promises of reforms while insisting that they won't take people's coverage away. 

Last week, in the Cincinnati Enquirer, Bevin got more specific, though his language remained slippery: 

I would repeal the expansion as it currently exists, and seek a Section 1115 waiver from the Center for Medicaid Services. This would allow us to customize a plan that works better for Kentucky.

Again, this is exactly the kind of rhetoric we have heard from Republicans in Arkansas. Bevin would "repeal" the hated Obamacare expansion and put a plan that "works for Kentucky" in its place. But note that his mechanism for doing this — seeking an 1115 waiver from the feds — is what states like Arkansas, Iowa, and Montana have used to add GOP-friendly bells and whistles to a coverage expansion funded by Obamacare. An 1115 waiver could allow him to pursue stuff like small premiums or co-pays for some beneficiaries, or work referral or wellness programs (though there are limits to what the feds will allow). But if Bevin wants to avoid kicking the hundreds of thousands covered by Medicaid expansion "to the curb," his version of "repeal" would add these wrinkles but keep the coverage expansion in place. Which is precisely what we're seeing right now in Arkansas, the one Medicaid expansion state prior to Kentucky last night that has had anti-Obamacare Republicans sweep into power. 

Of course, what happened in Arkansas won't necessarily happen in Kentucky! Every state is unique, with different personalities, political dynamics, and policy- and lawmaking structures. For one thing, in Arkansas, the Republicanized version of Medicaid expansion via 1115 waiver (the private option) was already in place when Hutchinson won, and it already had buy-in from some prominent Republican lawmakers. And Hutchinson hedged on the private option from the get-go, whereas Bevin, who appears to be a Tea Party true believer, once made stark statements about immediately ending Medicaid expansion. 

The biggest difference is that the governor has more power in Kentucky. Part of the reason that Kentucky expanded Medicaid and created a state-run exchange in the first place was that popular Democratic Gov. Steve Beshear was able to implement it unilaterally without having to go to the legislature. Bevin could now unilaterally undo all of that.

But it's worth noting that ultimately, the decision to keep Medicaid expansion in place was Hutchinson's. Brian Beutler of the New Republic tweeted last night that "Arkansas expanded Medicaid, went fully Republican, and chickened out on rescinding it. But Bevin much less constrained." But the constraints in Arkansas actually worked against keeping the expansion in place. Along with Hutchinson, Republicans in 2014 gained total dominance in the House and Senate, with dozens of candidates running explicitly against the private option. In order to keep expansion in place, Hutchinson needed the approval of 75 percent of both chambers of the rabidly anti-Obamacare legislature (that incredibly steep threshold makes Arkansas unique in the nation). He managed to pull it off, convincing legislators who ran on repealing expansion to back his plan to keep it. But if Hutchinson had come out strongly against the private option, there is simply no way it could have cleared those hurdles. The legislature followed Hutchinson, not the other way around. In other words, if Hutchinson wanted to end the expansion, he could have, just as Bevin can now; if Bevin chooses the keep the expansion, he actually faces less constraints than Hutchinson did.  

Of course, Hutchinson is temperamentally a moderate, establishment type. Bevin is absolutely not. The fate of 400,000 Kentuckians is now in his hands, and that's reason enough to gulp. 

But here's one more bit of context for Kentucky: the state's Medicaid expansion remains popular; a recent poll found that only 24 percent of Kentuckians — and only 42 percent of Republicans in the state — want it repealed. Last night, the state's GOP Senate president said that Republicans will make sure people still have coverage and blamed "scare tactics" on social media. Who knows what Bevin will do, but the politically smart play seems clear. Bevin can move the state-based exchange to the federally facilitated marketplace and claim a symbolic victory, then he can use an 1115 waiver to make GOP-friendly adjustments to the Medicaid expansion — he can say that he "repealed" Beshear's Obamacare program without the political nightmare of actually kicking 400,000 people off of their health insurance. He can run the Asa Playbook. 

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