State health costs to fall until 2020

TOPEKA — Federal health reform will likely cut in half the number of uninsured Kansans, but state spending on health care coverage will initially drop.

By 2020, though, reforms will cost state taxpayers to assist the poor and the elderly.

Federal health reform will likely increase overall annual health care spending in Kansas by about $150 million, to $13.6 billion overall, according to a report developed by the Kansas Health Policy Authority, a state agency.

The report showed Kansas' share of Medicaid spending dropping by about $33 million to $35 million when the reforms are fully implemented in 2014.

"In the first three years Medicaid expansion is paid 100 percent by the federal government, so there is no increase in cost to the state," said Andy Allison, the authority's executive director, who presented the findings earlier this month.

Over time, the federal government would scale back its share of Medicaid. By 2020, the study anticipated, Kansas' costs would increase about $4 million.

The study also found that employer costs are projected to fall overall while individual spending would depend on the person's circumstances.

The reforms will open Medicaid up to all adults who make 138 percent of the federal poverty level or lower — currently equal to $14,958 for an individual or $30,429 for a family of four.

Currently in Kansas, the program — which is paid for by federal and state dollars — is available to the elderly, those with disabilities, children, pregnant women and very-low-income families.

About 87,000 more people will be eligible under the change.

Overall, the study estimated that federal health reform would decrease the number of uninsured in Kansas by about 190,000 people from its current 335,000.

About 145,000 Kansans, mostly young adults who will opt to pay penalties and non-citizens who aren't eligible to participate in programs, will remain uninsured.

"It does look like we will be able to cover a lot of people, which I find very encouraging," said Anna Lambertson, interim director for the Kansas Health Consumer Coalition.

While the study noted that the reforms do not directly address behaviors that drive health care costs — such as smoking, overeating, or lack of exercise, Lambertson said she hoped that having more people covered would help reduce costs.

Those with insurance who did not have it previously would be more likely to visit the doctor and seek preventive care for various conditions, she said.