(AP Photo/Timothy D. Easley)

Since it launched its state health-care exchange in 2013, Kentucky has been held up by Obamacare supporters as a model of how to do it right.

Now, Kentucky's newest governor, Republican Matt Bevin, is moving to get rid of it. He argues that the state-run exchange, kynect, will eventually cost the state money to keep running it, and that it's redundant when Kentuckians can just use the federal government's website to shop for health insurance.

Critics and nonpartisan health-care policy analysts question how much money Bevin will actually save in dismantling Kentucky's health-care exchange -- and at what cost to Kentuckians, who have used the popular health-care exchange to get insured in record numbers.

But if and when it happens -- and Bevin officially got the process started in a letter to the feds Dec. 30, which was reported this week -- Kentucky would again make history, becoming the first state to shut down a functioning health-care exchange and hand it over to the feds.

Once again, the eyes of the health-care industry are on Kentucky. Here is everything you need to know about how it's playing out.

How we got here, politically

It's helpful to know a little bit about Kentucky's newest governor. The self-funded political novice and tea party candidate campaigned this summer as an outsider and often made controversial statements that earned him comparisons in the national media to GOP front-runner Donald Trump.

In November, he beat his Democratic challenger in a landslide during a very good year for Kentucky Republicans, who are having a renaissance of sorts in a state where the top executive jobs had been dominated by Democrats. His election was a key victory for Republicans nationwide in November.

[Matt Bevin is the next governor of Kentucky. He has President Obama to thank for that.]

One of Bevin's most prominent campaign promises was to end kynect and roll back the Medicaid expansion led by his predecessor, the popular former Democratic governor, Steve Beshear. Democrats hoped to use this against Bevin and tried very hard to make it stick, but Bevin won by a surprising margin on Election Day.

Bevin has since stepped back from the call to roll back Medicaid, saying he'd instead freeze its expansion or get the federal government's permission to modify who can qualify (under current law, that's 138 percent above the poverty line). He also wants to figure out a way to charge Medicaid enrollees premiums.

What's driving Bevin's crusade against Obamacare

There are three dynamics likely playing a big role in Bevin's opposition to the exchange.

One is his core political philosophy that Obamacare is a flawed program and he doesn't want anything to do with it. In getting rid of the state exchange, he's washing his state's hands of the program and aligning himself with the 33 mostly Republican-run states that never set up an exchange in the first place.

The second is that, in trying to roll back or alter what low-income Kentucky residents can get on Medicaid, Bevin is championing traditional conservative beliefs that federal welfare can hinder some people's attempts to climb out of poverty.


The town of Pikeville is woven into the valleys of eastern Kentucky coal country of Pike County on Friday, November, 6, 2015. In this section of Appalachia, where coal jobs have been vanishing and poverty runs high, the effects of the Affordable Care Act has been dramatic. In a single year, from 2013 to 2014, the proportion of Pike County residents lacking health coverage plummeted by half -- from 13 percent to 6.6 percent. (Photo by Jahi Chikwendiu/The Washington Post)

"It will involve people having skin in the game … taking financial and personal responsibility for these things," he told reporters after his election in November, adding that he grew up below the federal poverty line and knows what it's like to live without health insurance. Bevin has even predicted that under his to-be-determined changes to Medicaid, the number of those enrolled could actually increase. (It's hard to parse that until health-care analysts see what he actually proposes.)

The third dynamic is perhaps even more pressing: Kentucky is broke, notes University of Kentucky political science professor Don Gross, and Bevin is under enormous strain to try to save every penny he can -- without raising taxes.

"A lot of this is fundamentally driven by the Kentucky budget," Gross said.

Bevin argues that getting rid of kynect will save the state money, and that trimming the number of people on Medicaid can slim down some of the 5 percent the state is expected to chip in next year -- an estimated $109 million -- to pay for it.

But can he legally do all this? 

As we mentioned, Kentucky was a leader in setting up the exchange so smoothly under its now-former Democratic governor, and it will lead the way in getting rid of it under its new Republican governor.

And that means no one really knows how that will work. Beshear implemented the exchange via executive order, so it's likely Bevin can take it away with his pen. (Democrats are considering an effort to stop him, but they only have control of one state legislative chamber and could lose their grip on that soon, thanks to party-switching.)

The federal government has received Bevin's letter and very diplomatically told the Louisville Courier-Journal in a statement it will work to make the Kentuckians's transition to HealthCare.gov "seamless."

Bevin had to notify the feds of his intent a year in advance, so the change, if it occurs at all, would happen by the open enrollment period in 2017.

Then there's the question of whether Kentucky would owe the federal government any money for handing over the reins to its insurance exchange. The government has helped pay for kynect, as much as $136 million so far. And the woman who led the exchange set-up told Louisville NPR affiliate WPFL that she's not sure if the government would make Kentucky pay that back.

An update: Bevin's predecessor, Beshear, weighed in on all this in an interview with CQ Roll Call's Nathan Gonzalez. "“He says the current system is unsustainable but he doesn’t have the facts to back it up,” Beshear told Gonzalez. “We’ll have to wait and see what steps are really attempted."

What the critics say

Health-care analysts and Obamacare supporters have brought up a lot of different objections to Bevin's plans. Most come down to numbers.

By most accounts, Kentucky has been one of the most successful states in the nation under Obamacare. It has slashed its uninsured rate in half since launching its state exchange and did so by investing heavily in community-driven outreach -- especially among the poorer and more rural Appalachian districts, to sign people up for health insurance or Medicaid.

The Medicaid expansion in particular worked out well; about 10 percent of Kentucky's population enrolled in Medicaid under kynect, bringing those enrolled in the program in Kentucky to 1.2 million.

If Bevin rolls back the Medicaid expansion, those same rural voters who supported Bevin could be the most affected by the changes, said Stephen Voss, a political science professor at the University of Kentucky.

At the very least, the thousands of Kentuckians who have since bought health insurance via kynect will have to switch to a new website and new format and will be required to re-enter their information -- even those just renewing their plan, said Jennifer Tolbert, with the Kaiser Family Foundation. With that confusion comes the risk of people just deciding not to go through the hassle or falling through the cracks.

And it will cost money to take down the site -- roughly $23 million, according to Jason Bailey, the director of the non-partisan progressive policy and research group Kentucky Center for Economic Policy, in an interview with the Courier-Journal.

Bevin, of course, disagrees or bats away many of those concerns, and he promises his experiment in health care will make the state more prosperous and healthy.

Analysts will be watching Kentucky's uninsured rate next year to see if that's the case. And once again, Kentucky's health-care system will be in the national spotlight.