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In Kentucky, Obamacare's success did nothing to change the politics of the law

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Kentucky health care exchange navigator Courtney Lively
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FRANKFORT, Ky. — In one of the poorest areas of Appalachia, about 2,500 people have signed up to get health insurance over the last six months — a number that represents more than a tenth of Clay County’s residents.

One-hundred-and-twenty miles way, the county’s state senator, Robert Stivers, is laying out his plans to gradually gut the Affordable Care Act in Kentucky, which provided his constituents with insurance. The soft-spoken 52-year-old Republican is hardly a fiery Tea Party type: He first joined the state Legislature in 1997 and slowly rose through the ranks to become the state Senate president. In a mid-March interview in a small room just off the floor of the Senate in Kentucky’s Capitol building, Stivers acknowledged that Kentucky Gov. Steve Beshear had handled the rollout of President Barack Obama’s health care law smoothly in this state and that some people in his district now have health insurance for the first time.

Stivers, though, is unmoved. The Affordable Care Act, he says, is “unsustainable” in the long run. If Republicans can gain more seats in the state Legislature here over the next year, he said, they will look to peel back Kentucky’s participation in the health care law by limiting the expansion of Medicaid in the state. And he backs scrapping the entire law, too, at the federal level. “I do think it should be repealed,” he said emphatically at the end of the interview.

Kentucky's implementation of the Affordable Care Act has been wildy successful, with a well-functioning state website from day one of open enrollment and a major push that’s led to more than 300,000 signing up for the exchanges or Medicaid. Indeed, the rollout in this red state has been so successful that Obama invited Beshear, a Democrat, to attend the State of the Union address in January and praised him by name during the speech.

Far from being seen as a success story, though, in Kentucky, the health care law and Beshear's strong embrace of it remain deeply controversial. A recent poll showed that a plurality of Kentuckians continue to favor repealing the law. Other than Beshear, many of the state's leading Democrats, aware of the lingering tensions around the ACA, avoid speaking about it publicly, wary of being seen as too supportive of "Obamacare."

And Kentucky Republicans are acting just like those in Washington and states around the country: GOP state legislators in the Democrat-controlled Kentucky House this month pushed unsuccessfully for a provision to repeal the state’s Medicaid expansion under the ACA and suspend its health care exchange.

“The politics have really not changed,” said Regan Hunt, executive director of Kentucky Voices for Health, a nonprofit group that supports the health care law. She noted that while it’s easy to find Republicans in the state’s Legislature who will publicly blast the law, “I don’t know if we have true Democratic champions” besides Beshear.

The lingering opposition isn’t surprising. Kentucky didn’t become the poster child for Obamacare because of a broad consensus in the state, but because of the actions of one man: Beshear.

Like the rest of the South, the state, once dominated by Democrats, has moved decidedly right over the last 15 years. Bill Clinton won here in 1992 and 1996, but Obama was defeated by 23 points in 2012. Kentucky’s U.S. senators, Mitch McConnell and Rand Paul, are ardent conservatives.

At the same time, five of Kentucky's six statewide nonfederal officers are Democrats, including Beshear, and the party has maintained a majority in the state House of Representatives. That’s because state Democrats distance themselves from the national party whenever possible. Beshear, first elected in 2007, won again in 2011 by blasting Obama as an enemy of the state’s coal industry.

Through his first five years in office, the governor had high approval ratings, but that was largely because he hewed close to the political center.

Then came Obamacare. Freed from political considerations because term limits prevent him from running again, Beshear over the last two years has stunned Republicans and even Democrats here with his forceful advocacy of the ACA. He unilaterally decided to create a health care exchange and expand Medicaid, ignoring complaints from Republicans in the state's Legislature who either opposed those moves outright or wanted to reach some sort of compromise.

Kentucky is the only state in the South with expanded Medicaid and an exchange website built locally.

“Our statistics are horrible, our health statistics are among the worst in the country,” Beshear said in an interview in his office on the first floor of the Capitol, two floors below where Stivers and the legislators were meeting. He was referring to Kentucky’s high percentages of people who smoke, are obese or have dental problems.

“When the Affordable Care Act came along, it was a gift from heaven in the sense it gave us a tool to change the history of this commonwealth when it came to the health of our people,” Beshear said.

In the months before the October 2013 start of the new insurance options under the health care law, Beshear and his aides prepared extensively. Their strategy was to try to reach Kentuckians everywhere, with enrollment events at state fairs and bourbon festivals, but also to name their insurance website kynect (combining the words “Kentucky” and “connect”) and de-emphasize the link between kynect and the national health care law.

That approach worked. Even Republicans here say that some Kentuckians will criticize Obamacare but in the next breadth emphasize how well kynect works, as if they are not part of the same law. Kentucky’s health insurance website has had few of the technical problems that have dogged HealthCare.gov.

Beshear, to the consternation of Kentucky conservatives, has not only implemented the law without any input from them, but spent the last several months on something of a victory tour, penning an op-ed in The New York Times telling Obamacare opponents to "get over it," making regular appearances on MSNBC touting Kentucky’s success and sitting in first lady Michelle Obama's box when Obama singled him out for praise at the State of the Union address.

The Republicans were initially caught flat-footed, particularly as enrollments surged in many of the state's most conservative areas, which are also high in poverty. And some Republicans privately concede it will be difficult to roll back expansion of health insurance to so many.

"Three hundred thousand people are on this now," said one top Kentucky GOP operative. "It's going to be hard to take this away from people."

But other Republicans are undaunted, determined to poke holes in Beshear’s story of Kentucky as a health care success. They emphasize that about 80 percent of Kentucky's new enrollments have been in Medicaid, while only 20 percent are in private health care plans, a ratio Republicans argue will be problematic when the state must start paying for some of the costs. (Under the law, starting in 2017, states must pay 5 percent of the costs of new Medicaid enrollments. Most other states have not released precise data on their enrollments, so it's not clear if Kentucky's Medicaid ratio is unusually high.)

“I think it’s immoral to give you something you know we can’t pay for,” said Robert Benvenuti, a Republican state representative who unsuccessfully pushed a bill that would have required Beshear and state legislators to get their own insurance through the exchange. “Why are you creating dependency you know you can’t afford?"

Republicans are collecting stories of Kentuckians whose health care plans have been changed or eliminated because they do not comply with Obamacare regulations.

Steve Robertson, chairman of the Kentucky Republican Party, said the GOP statehouse candidates would run this fall on the mantle of repealing the health care law, looking to gain five seats and the House majority. And a Republican could replace Beshear after next year’s gubernatorial elections.

“It’s a question of when, not if, when Kentucky will become just truly a red state,” said Robertson.

From there, Stivers described a gradual process to reduce Kentucky’s participation in the health care law. He suggested, for example, that Republicans pare down the Medicaid expansion under the program, which currently covers people as long as their income is less than 138 percent of the federal poverty level, in increments, bringing it down to perhaps 130 percent initially, then a lower number after that. (The Obama administration has long said it would not support such a partial expansion of Medicaid.)

Democrats acknowledge the political challenge in defending the law. They say the policy success has done little to shift the politics because anything associated with Obama is unpopular in Kentucky.

At the national level, Democrats, including top White House aides, have long argued that Americans would view the ACA more positively once millions of people became insured through it, and that Republicans would stop urging repeal once people in their own districts and states were benefiting.

What's happening in Kentucky directly contradicts those assumptions: the stories of the newly insured are drowned out, politicians in both parties here say, by the enduring unpopularity of Obamacare and the man it is named after, concerns (often unfounded) that the law has caused premiums to increase for people who previously had insurance and general confusion about the law, particularly the individual mandate.

When the state House had the vote on defunding the health care law, nearly all Republicans backed the provision, while a bloc of more than 20 Democrats abstained, denying it the votes to pass but also illustrating their concern over supporting the ACA publicly. Alison Lundergan Grimes, the Democrat challenging McConnell in a closely watched U.S. Senate race, does not include any mention of the law on her campaign website and has avoided associating herself with Beshear’s embrace of it.

McConnell, on the other hand, pledges to repeal the law in nearly every campaign speech.

“Politics is two seconds. In two seconds, you can say, ‘Obamacare, lost insurance,” said Coleman Eldridge, a top aide to Beshear. “Takes three minutes to explain why that’s really not true. They’re (Republicans) smart to do it, just matters how we defend it.”

“It’s a reflection of the reactionary and racist nature of Kentucky,” said Gerald Neal of Louisville, a Democrat who is one of the two black state senators here. “This is Kentucky and some parts of Kentucky are living in the past. They (Republicans) have been successful in associating these issues with Obama.”

This hostile political environment has left Beshear on a determined effort in his last year and a half in office, racing to deeply entrench the health care expansion in Kentucky, to make it so embedded that even if a Republican succeeds him, it will be politically impossible to unwind the process.

Beshear is looking for ways to fund the state’s health-insurance exchange without using taxpayer dollars, a move that would make it harder for state Republicans to argue that implementing the ACA is draining state resources. The governor and his team are already talking about conducting focus groups to study how to get more young adults to sign up for insurance when open enrollment starts again in November, to further broaden the number of people in the program.

And last month, Beshear announced a new initiative called “kyhealthnow,” a kind of Obamacare 2.0 that seeks to build on insurance expansion in Kentucky and sets up a long list of new health goals for the state, such as reducing its uninsured population to less than 5 percent and cutting the state’s obesity rate by 10 percent.

Beshear aides believe that if the number of Kentuckians enrolled through kynect gets near 500,000 over the next year in this state of 4 million, Republicans will continue to complain publicly but also largely concede they won’t be able to unwind the ACA in Kentucky.

“I’m making sure that nothing happens during this legislative session that will stand in the way of our progress,” Beshear said. “We are also building, I think, the public support so that as we get into next year and the year after that, this will be a very acceptable effort to everyone, regardless of their political party.”

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