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McConnell's claims on Kentucky exchange, Obamacare baffle experts

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McConnell's claims on Kentucky exchange, Obamacare baffle experts

Senate Minority Leader Mitch McConnell, R-Ky., has made a habit of saying during his hotly contested race for re-election that repealing the Patient Protection and Affordable Care Act would not necessarily mean shutting down Kentucky's popular insurance exchange that was established under the law.

The claim leaves many experts puzzled.

McConnell is poised to become Senate majority leader if Republicans gain control of the chamber in November. But only if he wins his own race.

“If you just took the Kentucky exchange out of the rest of Obamacare, it would have almost no business,” said Paul Ginsburg, professor of health policy and management at the University of Southern California. “It's not the website that makes the difference, it's the tax credits and regulations which transformed the individual market.”

Joel Ario, a managing director at consultancy Manatt Health Solutions and one of the architects behind the federal health exchange, likewise said the exchange, called Kynect, could not function without the regulatory framework and subsidies that define the marketplace. “It's very hard to square the circle,” he said. “He's saying, 'I like Kynect, and I like the storefront … but at the same time, I want to take away the law that is the source of all those products in the store.'”

Joseph Antos, a scholar at the conservative American Enterprise Institute, said that Sen. McConnell's comment left him bemused. Sen. McConnell, Mr. Antos said, is most likely “threading the needle” for political gain.

But, he added, the statement could have been misinterpreted. “Having an organized information clearinghouse kind of reminds you of Angie's List, or in health insurance, ehealthinsurance.com. The idea itself is not at all crazy.”

Changing the Affordable Care Act, however, might leave many exchanges unable to attract the number of insurers and consumers to sustain their business.

The McConnell camp has been coy about Sen. McConnell's preferred replacement for the Affordable Care Act and how an exchange might operate without the law in place. A McConnell spokesman said Sen. McConnell would likely defer to his members and committee chairs in drawing up a replacement to the act. He did not respond to questions about whether the alternative legislation would include subsidies or regulations such as the individual mandate that Messrs. Ario and Ginsburg believe make the marketplaces functional.

“There were exchange sites before the Affordable Care Act,” the spokesman said. “Obamacare did not invent websites.”

Dr. Avik Roy, a senior fellow at the Manhattan Institute, says that the proper replacement plan would actually boost the marketplaces' prospects. He believes that the regulations from the Affordable Care Act — such as essential health benefits and circumscribing certain high-deductible health plans — restrict choice, and that removing those regulations would result in more plans for consumers to pick from.

Dr. Roy's plan would include tax credits to keep reducing the ranks of uninsured, and he says that a plan put forward by Sens. Tom Coburn, R-Okla., Richard Burr, R-N.C., and Orrin Hatch, R-Utah, comes close to his vision. But, he said, the exchanges can survive without subsidies even though fewer people will get coverage.

Still, the debate may be academic because many believe Congress is unlikely to pass a wholesale repeal of the law at this point. More likely, the shape of the exchanges will evolve as federal and state officials make more subtle tweaks and fixes, either through legislation or innovation waivers, Mr. Ario said.

Darius Tahir writes for Modern Healthcare, a sister publication of Business Insurance.

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