The Richmond Register

State News

October 8, 2013

Kynect passes another challenge

FRANKFORT — Kynect, Kentucky’s health benefit exchange under the Affordable Care Act, established by Gov. Steve Beshear’s executive order, survived another challenge Tuesday.

Republican state lawmakers have maintained Beshear doesn’t possess the authority to establish the exchange on his own, but a state court ruled the governor has such authority under a law passed by the General Assembly authorizing the governor to take steps necessary to implement federal programs. The ruling is under appeal.

But Kentucky law also requires regulations formulated by the executive branch to be reviewed by the legislature to determine if they are authorized by legislation, something it does through its Administrative Regulations Review Subcommittee.

So, when the exchange regulations were put in front of the subcommittee Tuesday, Sen. Sara Beth Gregory, R-Monticello, challenged the regulation’s statutory authority.

Carrie Banahan, executive director of the exchange, and Bill Nold, the deputy director, cited the same law under which Beshear created the exchange itself as authority for the regulations.

But Gregory pointed out there was no legislation which specifically authorized the exchange.

“I don’t think we have an applicable state law because there hasn’t been any legislation passed to establish this program,” Gregory said.

Sen. Joe Bowen, R-Owensboro, agreed.

“I think it is fair to say a lot of folks across the commonwealth question the broad authority the governor assumes to have to put in place such a comprehensive health policy,” Bowen said.

Gregory then moved to find the regulations deficient, and Bowen seconded the motion.

But that’s where the arcane procedures for regulations came into play.

The governor has the power to override the subcommittee’s decision when it finds a regulation deficient. But if the subcommittee finds a regulation deficient, that allows the full General Assembly to kill the regulation when it next convenes.

However, the subcommittee rules require a majority vote of its membership or five votes — not just a majority of those present — to find regulations deficient.

Prior to Gregory’s motion, two members — Rep. Johnny Bell, D-Glasgow, and Rep. Bob Damron, D-Nicholasville, left the room.

So when Gregory’s motion was put to a vote, there were only five members present. Gregory, Bowen and Harris voted to find the regulation deficient; Rep. Jimmie Lee, D-Elizabethtown, and Sen. Perry Clark, D-Louisville, voted against the motion.

So,although the vote was 3-2 to find the regulation deficient, the motion failed.

Contacted after the meeting, Bell said he left because he had “another (previously scheduled) meeting upstairs.” CNHI couldn’t reach Damron, but Banahan said he understood prior to the meeting that Damron had a private business meeting and would leave early.

She also said the administration is confident the law allowing it to implement programs to qualify for federal funding allows the establishment of the exchange.

Gregory, an attorney, disagreed, saying an executive order is not a statute, and the legislature never passed a statute authorizing the exchange.

“I don’t think it is appropriate for the administration to go forward with something of this magnitude without statutory authority,” she said.

Kynect, Kentucky’s online health benefit exchange, began operating last week, taking applications for low cost or subsidized health insurance under provisions of the Affordable Care Act also called “Obamacare” by its critics.

While the exchange has suffered several glitches, it has been singled out by pro-ACA groups and some media reports for performing better than the national exchange or other state exchanges.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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