Is this new state governor the death knell for Obamacare?

The election of a governor promising to undo the Affordable Care Act in a state that established a successful reform is a grim sign for the law’s future, analysts say

Insurance News

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A newly minted Republican governor who ran on a platform of abolishing the state exchange and fighting the Affordable Care Act could prove seriously harmful to President Barack Obama’s signature healthcare law, analysts say.

Matt Bevin, a Tea Party-backed businessman, was elected handily as governor of Kentucky Tuesday with 53% of the vote. Bevin, who has never held political office, has promised to both end the expansion of Medicaid and axe the popular state-run Kynect, Kentucky’s health insurance exchange.

The abolition of these moves is within the realm of possibility. Former Kentucky Governor Steve Beshear used his executive power to bypass a conflicted state legislature to implement the two programs, and lawmakers could back Bevin’s efforts to undo that.

Kynect has consistently been one of the top-performing state insurance exchanges in the country, and together with the Medicaid expansion, has resulted in coverage for more than half a million people. The state experienced a 9% drop in its uninsured rate – the highest in the country.

The election of an ACA-opposed governor in such a state now has analysts suggesting the same thing could occur if a Republican is voted into the White House next year.

“If Mr. Bevin signs the death warrant for Mr. Obama’s reforms in his state, a Republican in the White House may find the political courage to do likewise,” Anthony Zurcher of the BBC wrote this week.

Many Republicans currently running for president have not embraced ACA repeal as a major part of their campaign strategies, however.  Only Scott Walker has suggested a complete scrap of the law, while grass-roots favorite Donald Trump has endorsed a new government-backed plan for healthcare and former Florida Governor has even criticized the repeal effort.

Popular support for a repeal is not there either, according to Republican pollster Whit Ayres.

“Only 18% of Americans want to go back to the system we had before because they do not want to go back to some of the problems we had,” Ayres said. “Smart Republicans in this area get that.”

Resistance to the ACA is also down among members of the insurance community, some of which enjoyed their best quarter since the law went into effect.

According to a Forbes report, UnitedHealth Group and HCA Holdings last week raised their 2015 revenue projections by billions of dollars.

Hospital operator HCA said its first quarter 2015 revenue could reach $40 billion – up from its initial outlook of between $38.5 billion and $39.5 billion. Meanwhile, UnitedHealth raised its revenue for 2015 by $2 billion; the insurance giant now expects to generate $143 billion in revenue this year.

“We knew back in January that the market was responding positively so it’s played out nicely,” said UnitedHealth Group CEO Stephen Hemsley.

However, insurer good fortune and changing political sentiment do not mean Obamacare is likely to remain unchanged. The individual mandate is still highly unpopular and could be adjusted, while provisions in the law that allow states to develop alternative systems for coverage could make health insurance a very different game state to state.

And that’s something that residents of Kentucky may be soon to see.
 

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