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Kansas to weigh benefits, costs of expanding Medicaid

  • The Wichita Eagle
  • Published Wednesday, Jan. 2, 2013, at 6:54 p.m.

Like many states, Kansas is assessing the benefits and costs of expanding Medicaid – an option it has under the Affordable Care Act.

Health care leaders say they are pleased Gov. Sam Brownback’s administration is studying the issues, rather than opting out early as some Republican governors have done.

“It’s really good news that the governor hasn’t just automatically said no, that he is willing to look at the economic impact for the state of Kansas,” said David Sanford, CEO of GraceMed Clinic, a health ministry of the United Methodist Church.

“It’s good not just for the health and well-being for the number of people uninsured, but the financial impact for hospitals and clinics and providers.”Medicaid is a state-federal program that helps fund health care for low-income people. States can expand their Medicaid programs to cover more people, but last summer, the U.S. Supreme Court ruled that Medicaid expansion could not be mandated by the federal government.

Instead, the federal government will have to rely on the financial incentives that the law puts in place: It will pay states for the first three years of expansion, and then gradually phase down to 90 percent of the new costs by 2020.

Sanford said the expansion of Medicaid and additional funding could help offset cuts that some health care providers are facing because of the Affordable Care Act.

If Medicaid were expanded, another 24,000 people in Sedgwick County would qualify for Medicaid, Sanford said. The clinic estimates it would gain about $1.8 million in revenue per year if expansion occurred.

“When your budget is a little more than $10 million, that’s a significant impact on the ability to deliver quality care,” Sanford said.

About 380,000 Kansans are covered by Medicaid. The Kansas Medicaid eligibility upper income limit for children is currently 232 percent of the federal poverty level and for pregnant women 150 percent, according to the Kansas Department of Health and Environment.

For adults with children, it’s 32 percent, according to the Kaiser Family Foundation.

Non-disabled, childless adults do not qualify under Kansas’ current system, but would under expansion.

Expansion would start in 2014 and would cover people who make up to 138 percent of the federal poverty level, or about $15,415 a year for an individual in 2012, according to the Kaiser Family Foundation.

The Kansas Health Institute estimates Medicaid expansion in Kansas could cost between $21 million and $112 million for the first year, and that virtually all of those increased costs will be from people who were eligible before but not enrolled.

From 2014 to 2020, the KHI estimates the state’s share for the cost of expansion could total between $221 million and $912 million.

The Kaiser Family Foundation estimates that in Kansas, 169,000 people would join Medicaid because of the eligibility expansion and an additional 53,000 would gain coverage because of other provisions in the federal health care law.

“I think it is appropriate for the governor to carefully study the issue,” said Jon Rosell, executive director of the Medical Society of Sedgwick County. “We look forward to his recommendation and hope his decision strikes a balance between meeting the needs of Kansans and doing so in a fiscally responsible way.”

The Kansas Hospital Association has been advocating for the state to consider expansion.

President and CEO Tom Bell said it makes sense for the governor make the assessments before lawmakers take up the issue.

“This important decision isn’t one that should be entered into lightly,” Bell said. “Each state needs to look at what makes sense for each particular state.”

Bell said expansion “would potentially allow us to make sure costs are placed in the right point in system, as opposed to someone getting sick and going to the emergency room.”

The Kaiser Family Foundation estimates states will receive about $9 from the federal government for every $1 spent on expansion. There is no deadline for states to decide to expand their programs.

Other states

About half of states have yet to make a decision on Medicaid expansion.

Leaders in several states have shared similar concerns to those of Brownback, including whether the federal government will keep its promise to pay for most of the expansion and what the long-term costs will be for states.

In Ohio, state officials have said they are wary of the costs of expanding Medicaid, noting that they are bracing for thousands of currently eligible Ohioans to sign up for Medicaid once the law requires most people to have insurance in 2014.

Leaders of Missouri’s Republican-led Legislature have said they have concerns with long-term costs and increased federal debt, as well as general objections to expanding entitlements. But Gov. Jay Nixon, a Democrat, supports expansion.

Florida is also evaluating the cost to expand Medicaid. The state’s program costs more than $21 billion to operate each year and the federal government pays for 58 percent of it.

Estimates for Florida’s expansion vary drastically. Gov. Rick Scott’s health care agency estimates the state’s cost at nearly $26 billion over 10 years. However, state economists estimated in August it would cost $8 billion.

Contributing: Associated Press

Reach Kelsey Ryan at 316-269-6752 or kryan@wichitaeagle.com.

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