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Kentucky governor: Without Obamacare, there is no Kynect

NBC NewsWire

Kentucky Gov. Steve Beshear never planned on his state becoming an Obamacare stand-out.

Maryland and California spent much of 2013 boasting how their new marketplaces would, as Gov. Martin O'Malley put it, "lead the nation." Kentucky kept a relatively low profile as it built the only state-run health exchange in the south; boasting about Obamacare in a region staunchly opposed to the law didn't seem like the best path to success.

"We were working hard to make sure that everything worked, but we had no idea that we would be one of the few whose website would actually work when we started," Beshear says.

Six months later, Kentucky has arguably had one of the most successful rollouts of any state-run exchange. Unlike Healthcare.gov, Kentucky's marketplace, Kynect, worked on day one — and has continued running pretty smoothly since.

One in ten Kentucky residents now gets their health insurance through Kynect. The marketplace is so well-liked that Senate Minority Leader Mitch McConnell now supports keeping Kynect around while calling for Obamacare's repeal (a proposal that, policy-wise, would be nearly impossible to pull off).

Beshear visited Washington, D.C Tuesday to address Enroll America's conference on what worked during open enrollment. We spoke in his office about what worked in Kentucky, why he doesn't think other states will set up their own Obamacare exchanges and how long it will take other Southern governors to expand Medicaid. What follows is a transcript of our discussion, lightly edited for clarity and content.

Sarah Kliff: What was October 1 like for you guys in Kentucky? I know here in DC we had a government shutdown starting and a health care website that didn't work.

Gov. Steve Beshear: There had been an extreme amount of effort put in for months. All of our folks had been planning for the rollout of the Affordable Care Act, planning the website, organizing connectors, doing educational outreach. There were thousands of people involved all during the spring and summer working on different aspects of that.

One of the key decisions we made looking back on it was we didn't require people to register and sign-in before they could browse our website. You could go on and plug your numbers in and see what kind of subsidy you're going to get. The federal website was set up where everyone had to sign in first, and that just created a bottleneck.

All that work went in and then, quite honestly, at midnight when October 1 rolled around, we crossed our fingers, said a little prayer and hoped for the best. Fortunately, it worked. All that hard work paid off and it was, by noon, an avalanche of people. For the first couple of weeks, it was just amazing.

SK: Did you see Kentucky becoming a national success story and model? I know going into open enrollment, you had Maryland and California talking about how they were doing the best work. Is this the role you expected Kentucky to play in the Obamacare roll out?

SB: That idea wasn't even on our radar screen at the time. We were working hard to make sure that everything worked, but we had no idea that we would be one of the few whose website would actually work when we started. All at once, we were a national model because we were working with ease.

Obviously, the federal government website had such problems and when you look back on it, hindsight is 20/20, I'm sure when they started they're planning they never thought in their wildest dreams that they would have 34 or 35 states to run. I'm sure their idea going in was there will be a few that will just take the federal exchange, but most will do their exchange. They don't want the federal government to do this, they want to do it for themselves - that's the way Kentucky thought. They ended up having to deal with 35 sets of insurance laws. It got very complicated very fast.

SK: Do you expect more states will run their own exchanges in the future, or this open enrollment really just underscored how difficult it is to launch these marketplaces?

SB: The experience so far would seem to indicate that now that the federal exchange is up and running...and with the problems some states have had that tried to do local exchanges and the vendors who didn't work, my guess is you'll see states mostly allowing the federal government to do it. Some of the states that are rebooting are going to have spend considerably more money to get it done. My guess is you won't see a lot of states opting into that.

What I do think you'll see in the next two to four years is states opting into Medicaid expansions.

SK: How do you see that issue playing out in the South? I know Sen. Vitter said yesterday he was open to the idea in Louisiana, which seemed like quite a shift for the state.

SB: Before I made the decision to expand Medicaid, I wanted an answer to the question of whether we could afford to do so. It's easy to determine its the right thing to do, if you can do it without bankrupting the state. I brought PriceWaterhouseCooper in and they did that study for us that indicated that not only can you afford it, but you really can't afford not to. This is a positive economic impact on your state for the next five to ten years.

I think what you're going to see in a lot of these states where its been a political football that sooner or later most of these states are going to go ahead and opt into this. We get folks from Tennessee and some of the surrounding states that haven't done this, and are in Kentucky, and they see what's happening. They see their family or friends who live in Kentucky all at once have affordable health care, or qualify for Medicaid, and they can't get it. I think that sentiment will start growing and most these states will be forced to move on and get into expanded Medicaid.

SK: When you look at somewhere like Texas, where Gov. Perry has taken a very strong stance against this, do you think there's also a two to four year timeline for the state expanding?

SB: Who knows. I would never predict anything about Texas but I think for a good number of states that have yet to do it I think you will see it happen. As the political firestorm that we've had for the last six years, as we move hopefully a little bit beyond that in the next three or four years, I think it will be more palatable for some of the Republican governors to go ahead and do what they really should do and find a way to expand Medicaid. They may talk about it in a different way, may try to put different terms on it, but at the end they're denying a significant portion of their population affordable health coverage.

SK: Was the Medicaid expansion a difficult thing to do as an executive action? Would you have preferred to do it with the support of the legislature?

SB: No. Once I got the report from PriceWaterhouseCooper that demonstrated we could afford to go in that direction I was proud to make the decision. I was proud to have the executive branch write that regulation to expand Medicaid, because its the right thing to do. Once I found out I could afford it, it was an easy decision.

SK: On Kynect, I know Sen. McConnell has made some comments about the idea that we should repeal Obamacare, but definitely keep Kynect. Can you talk a little bit about, if Obamacare is repealed, what happens to Kynect?

SB: If Obamacare is repealed, there's not going to be any Kynect. First of all, if you repeal Obamacare, your folks with pre-existing conditions won't be able to get coverage. Kids won't be able to stay on their parents' policies until they're 26. Women will go back to having to pay more for the same insurance. There's all kinds of things the Affordable Care Act has done to change the landscape that will disappear and that's part of what Kynect is based on, all of those assumptions.

The second thing is expanded Medicaid is gone. If the federal government is not going to pay for expanded Medicaid, certainly the state can't pay for it. Third, all the premium subsidies will go away. So there won't be a lot of people who can afford the qualified health plans.

It'll be a total dismantlement of Kynect. And, the real consequence is the 421,000 Kentuckians buying affordable health insurance won't have it. I'll submit to you that's why Sen. McConnell is tap-dancing on this issue and trying to play both sides of it.

SK: Could you keep running any sort of marketplace, or would there be any point without the Affordable Care Act?

SB: There wouldn't be any point. You already had a marketplace for individual health insurance companies to come into the state and market their policies and really the reason for that marketplace disappears when you don't have the subsidies that come along with it, and there are no requirements for essential benefits. You would just be right back where we were before the Affordable Care Act passed.

SK: Do you think there's a point where Obamacare and Kynect become more equally-popular in your state, or will there always be this disconnect where Kynect is better liked?

SB: I think down the road it will all even out. This whole Affordable Care Act issue has been very partisan issue since the president proposed it. This will be his legacy. He will go down in history as the president who brought affordable health care to most Americans. That's a great legacy to have. It'll be the first major change since Medicare in the 1960s. And I would submit to you that 20 years from now, people will be looking at it like Medicare. It will be part of the fabric of our society and it will not be a hot button for anybody. If I had to guess, I'd think the president doesn't mind it being called Obamacare because he's going to be known for it and get the credit for it in the long term.