Apparent inaction on Medicaid expansion in Kansas leaves medical facilities scrambling to cover costs

06/05/2013 6:11 PM

08/08/2014 10:17 AM

With the close of the legislative session on Sunday and no definitive word from Gov. Sam Brownback, it appears the issue of Medicaid expansion in Kansas is dead – at least for the foreseeable future.

The news is a blow to hospitals and providers across the state that were pushing for the expansion.

As part of changes in federal health care laws, hospitals agreed to support cuts in federal funding meant to offset the cost of providing care for the underinsured and uninsured because they thought those cuts would be offset by additional payments through Medicaid expansion.

Now the hospitals will be hit with the cuts, but Medicaid won’t cover more people. As a result, providers are looking at their options and will have to evaluate the services they provide, said David Hadley, chief financial officer for Via Christi Health.

“(This) makes it hard to continue to pick up costs on a long-term basis,” Hadley said. “There are a lot of things still hanging that nobody knows the answer to.”

As part of the cuts, Via Christi Health expects losses of about $22 million, Hadley said, and Medicaid expansion would have helped Via Christi recoup $7 million.

“Medicaid doesn’t cover costs, but every little bit helps,” he said.

No one from Wesley Medical Center was available for comment. In a previous interview with The Eagle, CEO Hugh Tappan had said Wesley would face up to $11 million in cuts per year but did not have an estimate of how much would be returned through expansion.

Medicaid expansion would cover an additional estimated 151,000 Kansans, according to an independent analysis conducted for the state. The federal government would pay for the full cost of expansion for the first three years and 90 percent thereafter, under the Affordable Care Act.

The Legislature could expand Medicaid during the next session and still qualify for two years of the federal funding.

Hadley said Via Christi doesn’t expect a surge of patients when the Affordable Care Act’s individual mandate requiring nearly everyone to have insurance is implemented Jan. 1.

He thinks that many people may choose to pay the penalties instead of buying insurance because the penalty will be substantially cheaper than insurance.

Local clinics will also be affected by the decision not to expand Medicaid. Schaunta James-Boyd, executive director at the E.C. Tyree Clinic, said she is disappointed by the Legislature’s inaction.

“This definitely has a big effect on all clinics in Wichita and across Kansas,” James-Boyd said.

Under expansion, the E.C. Tyree Clinic would have received more than $200,000 in estimated Medicaid funding to cover clinic visits for an additional 2,500 individuals in the community next year, James-Boyd said.

Last year, the clinic saw 6,000 patients, she said.

“I know it’s a complicated situation for some that have decision-making power, but I just don’t think they got the full understanding of its importance and are more caught up in politics and don’t want the government involved in things, but they’re not looking at the effect on Kansans,” she said.

“The money we’re putting into this system is going to go to other states.”

Who’s expanding

So far, 23 states and the District of Columbia are planning to expand their Medicaid programs. About a dozen states are undecided.

If all states accept Medicaid expansion, more than 20 million people are expected to be added to the programs, mostly low-income adults with no children and the “working poor,” whose jobs don’t include insurance.

The issue of expansion has been a hot topic in predominantly Republican states.

So far, nine Republican governors have supported or accepted expansion. Some opponents say they don’t believe the federal government will stick to its word on funding the expansion, while others say they oppose it on ideological grounds.

The nine GOP governors supporting expansion are Jan Brewer in Arizona, Rick Scott in Florida, Terry Branstad in Iowa, Rick Snyder in Michigan, Brian Sandoval in Nevada, Chris Christie in New Jersey, Susana Martinez in New Mexico, Jack Dalrymple in North Dakota and John Kasich in Ohio, according to the Associated Press.

But four of those governors have run into battles with state legislatures, according to the AP. Expansion prospects are floundering in Florida and Michigan and have run into trouble in Arizona and Ohio.

Via Christi’s Hadley said he hopes the Kansas Legislature will look at alternative models that other states are pursuing.

In Arkansas, about half of the 500,000 people using the new online insurance marketplace will be able to purchase private insurance using federal Medicaid funds. The “private option” was approved by lawmakers earlier this year as an alternative to Medicaid expansion.

Contributing: Associated Press

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