KDHE: Medicaid expansion could cost more than $100M per year

KDHE: Medicaid expansion could cost more than $100M per year

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State officials say federal Medicaid agency could require end to waiting lists as condition of expansion

by Andy Marso, KHI News Service

State officials told legislators Thursday that the state’s share of Medicaid expansion costs could start at $100 million per year and increase from there, and those costs could double if the federal government required full funding of waiting lists as a condition of expansion.

One day after her predecessor testified in favor of expansion under the Affordable Care Act, Kansas Department of Health and Environment Secretary Susan Mosier provided neutral testimony that warned legislators of potential fiscal pitfalls.

Mosier said there were “moral implications” of expanding Medicaid to “able-bodied adults” while Kansans with disabilities were still awaiting some services, likening it to “cutting in line.”

“We still do have over 5,000 individuals awaiting services,” Mosier said.
Mosier’s comments and a fiscal note from budget director Shawn Sullivan that included costs of funding the waiting lists in the expansion proposal, House Bill 2319, prompted questions from members of the House Health and Human Services Committee.

Rep. Susan Concannon, a Republican from Beloit, called it “a little bit disingenuous” and suggested it was artificially pumping up the projected cost of the bill.

“This is not part of the bill that the waiting list disappears,” Concannon said. “This is a decision from the administration to include those numbers in the bill?”

Mosier said Gov. Sam Brownback considers funding the waiting lists his top priority within Medicaid.

Rep. Jim Ward, a Democrat from Wichita and the leading legislative proponent of expansion, questioned that commitment.

“How do you stand there and pit disabled people against the uninsured when you haven’t spent a dollar on the waiting list?” Ward said.

“Actually we’ve spent $64 million on the waiting lists since the inception of KanCare,” Mosier responded.

The Medicaid waiver waiting lists Mosier referred to are for home-and-community-based support services for Kansans with disabilities, which is different from the strictly medical coverage that would be extended to Kansans under Medicaid expansion. Kansans with disabilities who are on waiting lists for HCBS services are not waiting for medical coverage.

The Kansas Hospital Association is one of the group’s leading the lobbying effort for Medicaid expansion. In the hearing Wednesday, the association’s president, Tom Bell, said the group believes expansion will pay for itself through economic development spurred by the infusion of more than $2 billion in federal cash into the health care system by 2020. But he anticipated Thursday’s waiting list concerns and said the hospitals are willing to talk about how to cover the state’s share of the costs, even if they include the cost of eliminating the HCBS waiting lists.

“We would love to be able to sit down and look at options for how to fund this,” Bell said.

Kansas’ privatized Medicaid program, KanCare, provides medical coverage for about 425,000 children and low-income, disabled and elderly adults. But that number includes relatively few non-disabled adults.

Adults with dependent children can participate in KanCare, but only if they have incomes below 33 percent of the federal poverty level, or a little more than $8,000 annually for a family of four. Adults without children aren’t eligible for coverage no matter how poor they are.

Expansion would make all Kansans with incomes up to 138 percent of poverty eligible for KanCare. The eligibility cap would be set at annual income of $16,105 for an individual and $32,913 for a family of four. Estimates vary, but it’s thought Medicaid expansion would extend coverage to between 140,000 and 170,000 Kansans.

Wednesday’s hearing on expansion brought in more than 150 pieces of testimony from health care providers, business groups and religious leaders who favor expansion and a crowd that spilled out into the hallway.

Thursday’s hearing, which included opponents and Mosier, brought in free-market think tanks like the Kansas Policy Institute, Americans for Prosperity, the Foundation for Government Accountability and Wichita-based Kansans for Liberty. AFP supporters, many in the organization’s green t-shirts, filled much of the Old Supreme Courtroom.

Akash Chougule, a senior policy analyst in AFP’s Washington, D.C., office, provided a laundry list of states where he said expansion had been fraught with cost overruns due to higher-than-expected enrollment, including his home state of Rhode Island. Chougule also cautioned that having insurance coverage does not guarantee patients will be able to find the doctors and treatments they need.

“Putting an insurance card in everyone’s pocket, by all means, does not ensure access to quality medical care,” Chougule said.

Ward, questioning both Chougule and Dean Clancy of the Foundation for Government Accountability, asked them if both had “one of those dreaded insurance cards.”

“Would you agree that though it may not be perfect, it’s a lot better than not having one?” Ward asked, rhetorically.

Chougule and Clancy nodded ‘yes’ in response.

Rep. Don Hill, a Republican from Emporia who has quietly helped steer the Medicaid expansion discussion, thanked Chougule, Clancy and other opponents for their testimony but said he thought the hearing had gotten “a little far afield.”

Hill noted that the bill in question does not prescribe a certain type of expansion, but only repeals a previous law that required legislative approval and compels the Brownback administration to begin negotiating with the federal government on an expansion plan.

“It’s really pretty simple,” Hill said. “It’s just saying we, the Legislature, are ready to get out of the way.”

Hill asked the opponents of expansion to offer the administration advice in crafting the best possible plan based on their research.

Nearly all the opponents who testified said they doubted the federal government would maintain the promised long-term 90 percent match. They predicted that costs would balloon and pull money away from other essential state services.

Chougule, whose group flexed its muscle in scuttling an alternative expansion plan in Tennessee earlier this year, predicted political consequences for legislator who votes for expansion or works for its passage.

“We certainly plan to hold accountable any legislator who supports this misguided scheme,” Chougule said.

Even the most conservative members of the committee had questions about how the status quo could be sustained, though.

The ACA cut Medicare payments to hospitals on the assumption that expansion of Medicaid would make up the lost revenue. But the 2012 U.S. Supreme Court decision upholding the ACA also said that states could opt out of expansion, and about half the states — all controlled by Republican legislatures — have done so.

Rep. Jim Kelly, a Republican from Independence, asked Chougule what would happen to rural towns in his district if their hospitals closed, and whether they would be able to attract new businesses to an area that was without a medical center.

Rep. Dick Jones, a Republican from Topeka, told Clancy he was not sure KanCare coverage was the ultimate answer. But Jones said he was struck the previous day by the testimony of Marcillene Dover, an uninsured Wichita State University student who said she faced delays getting her multiple sclerosis diagnosed and was further “devastated” when she had to figure out how to pay for costly treatments.

“This is what we want to prevent,” Jones said.

The nonprofit KHI News Service is an editorially independent initiative of the Kansas Health Institute and a partner in the Heartland Health Monitor reporting collaboration. All stories and photos may be republished at no cost with proper attribution and a link back to KHI.org when a story is reposted online.
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