Kentucky can't afford health exchange or Medicaid expansion, senator says

12/26/2012 05:31 PM

Improving the health of Kentuckians, who as a group are among the sickest in the country, should be a priority for state leaders, one key senator said, but not at the risk of the state’s financial health, which is equally ailing.

“I think it’s critical that we take a look at those to see how we achieve that. I’m not sure that this would be the way that would be best-suited to Kentucky and be fiscally responsible for the state of Kentucky,” said Sen. Julie Denton, R-Louisville and chairman of the Senate Health and Welfare Committee, at 4:10 of the interview.

The biggest developments in public health care expected in 2013 are the creation of a health insurance exchange network and the decision to expand Medicaid — both offshoots of the Affordable Care Act.

Kentucky is one of 19 states moving forward with setting up a health benefits exchange. The exchanges will match up uninsured Kentuckians with private health insurance. Gov. Steve Beshear’s administration has used federal grants to cover the set-up costs and estimates the exchange will cost $39.5 million a year to run.

But Denton said she’s skeptical about those numbers. And she said she would prefer the federal government to set it up.

“If they think this is such a wonderful plan, let them implement it. And I think it’s much better if you can implement it on a wide scale,” she said at 0:50. The legislature could decide to overrule the governor’s decision when the General Assembly convenes in January, she added.

There’s another reason she said she’d rather see the federal government try to set it up. (Watch at 1:40)

The Affordable Care Act calls for expanding Medicaid to cover those making up to 138 percent of the poverty rate — about $32,000 a year for a family of four. Under that provision, Kentucky could add 300,000 more people to its rolls, bringing the total to more than 1.1 million. That would mean about a quarter of Kentuckians would have their health covered by the Medicaid program.

The federal government would cover the entire tab of the expansion from 2014 until 2017 when the state would have to pick up 5 percent of the costs. From there, the state’s share would increase to 10 percent by 2020.

“Frankly, I don’t think we can afford to do it,” Denton said.

About Ryan Alessi

Ryan Alessi joined cn|2 in May 2010 as senior managing editor and host of Pure Politics. He has covered politics for more than 10 years, including 7 years as a reporter for the Lexington Herald-Leader. Follow Ryan on Twitter @cn2Alessi. Ryan can be reached at 502-792-1135 or


  • EPluribusUnum wrote on December 27, 2012 12:25 AM :

    Republicans used to stand for STATESRIGHTS in the days before Barrack Obama…now that the Affordaable Care Act aka Obamacare has provisions allowing each state to implement the ACA with local control for local needs…..they abandon States’ Rights and say let the Feds do it……, what a difference a President makes!! And remember, the individual mandate was a Heritage Foundation idea……so GOP when your ideas are utilized to get something done, they become bad for everyone because they were implemented by a President that actually DID something rather than opining what should be done, all the while never doing anything which is precisely what the GOP has done for the 100 years since Teddy Roosevelt first attempted to bring health coverage to Americans

  • Cumberland Gap wrote on December 27, 2012 10:08 AM :

    The state pays a tiny piece of it! Interesting the Republicans can get away with saying the federal government should do it when they get elected saying the federal government should be more limited and do less. Why can’t these proponents (like Sen Denton and Sen Thayer) of expanding federal government be asked about that hypocrisy?

  • daniel wrote on December 27, 2012 08:51 PM :

    Denton is right the Health Care Exchange will be a pool of adverse health conditions as healthy workers will insure with their employer and most will be self insured. The State tried this community rating in 1994 and it was a huge failure. Rates shot up time 2 in a short period of time and it all shut down due to huge loses after less than a year.. Every health care policy will have a new tax added of at least $65 + the taxes needed to operate the new exchange. Yes, the federal government can do it better and for less- They have over 8 million federal , mostly healthy employees in that exchange already. KY may only have 100,000 to 200,000, not enough to provide any savings and will add additional cost for community rating in the system. As for mediciad- the federal Government will cover 100% for a year or two, then the state gets to pick up the tab of 10% to 30% – this is the big question. However; even at 10%, the state will have to take the revenue from education to provide this aditional service to medicaid and it will be huge- appox. an additional $500 million added to the current $6 billion per year cost today..+ the additional cost of heath care cost in two years. Health care cost far exceed the ability of the state to pay any portion of the aded medicaid services to be required by the Obama Health Care Act. Education will take a huge hit- both elementary- secandary and higher Education.. Universities will be forced to have big tuition hikes to take on this health care reform of mediciad The cost of health care is curently 54% or the KY’s problems in the retiremnt system.. KY will have to raise taxes by horrible amounts to cover all this insurance and education will suffer….All other departments have been cut to the bone + the average taxe payer will have to pony up $3,200 more next year as Congress and The President can not avoid the fisacl cliff and thus the tax increases come automaticall as the Bush tax cuts will not be renewed.. Companies are going to begin a severe cut back in staff to pay for all this if they are not self insured.

  • waybert17 wrote on December 28, 2012 07:37 AM :

    Kentucky’s medical system is broken….no money to pay for all the medical care. And yet, no surprise, they are going to take on even more debt to run ObamaCare in this state. Someday, citizens like EPlur and CGap will realize no matter what the tax rate is….there will never be enough money to pay for everything the government has planned for us.

  • EPluribusUnum wrote on January 01, 2013 01:49 AM :

    Daniel you are wrong about the exchange having adverse selection. Kentucky small employer groups (under 50 employees) will be able to join the exchange and the employer will enjoy a 50% tax credit for the premium paid for employees as long as they are in the exchange…the 35% tax credit enjoyed by employers today unfer the ACA will disappear in 2014, so if an employer wishes to enjoy the tax credits availabale at all and especially the 50% rate they can only do so by having their group in the exchange….hardly adverse selection, in fact that guarantees that there will be significant enrollment into the exchange.

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