Kentucky, one of 14 states in the United States that operate their own state health insurance exchanges, has plans to cut ties with Obamacare by the end of the year.
Kentucky’s Governor, Matt Bevin, notified officials that the state exchange will be shut down “as soon as it is practicable” which means at the minimum, a year from now according to federal law. Kentucky residents who have purchased 2016 plans will not be affected by the news.
The state-run health insurance market is one of the main pieces of Obamacare, and over 100,000 people have used it to sign up for coverage in Kentucky since 2013. The market is paid by a 1% tax on any health plans, both outside of and within the market, in the state of Kentucky. Bevin has stated that only $2.5-$4 million of the $27 million operating costs are covered by the tax.
Bevin’s main issues come with the fact that citizens are forced to pay a tax to help the cost of an exchange they may not use, since the tax applies to any plan regardless of whether it was purchased in the market or not. By eliminating the state-run market and moving to federal, only those individuals who purchase plans within the market will be taxed.
The state exchange was once used as a success story for the Democratic party eager to champion Obamacare after the technical issues that arose with the federal system. With this news, it looks like Obamacare doesn’t work at a federal or state level.