I appreciated a letter from my friend, Len Hudson, last week regarding Medicaid expansion. Len made a good argument for expanding our Medicaid program under the Affordable Care Act.
Approximately 380,000 low income Kansans are covered by Medicaid which is now known as KanCare. Two thirds are children and adults with children who receive medical services under the program. The other one third represent our disabled population who receive medical as well as community supports through Medicaid waivers that keep them in the community and out of institutional care. Medicaid also supports nursing home care.
Medicaid expansion would cover adults without children up to 138% of poverty. Although an accurate prediction is impossible, the bipartisan Kansas Health Institute predicts that 122,000 could enroll in 2014 of which 47,000 would be moving from private health insurance into Medicaid.
A very important consideration under the ACA is the “woodwork effect”. There are approximately 29,400 adults and 45,000 children who are eligible for Medicaid who have never enrolled. With the individual mandate under the ACA many of these individuals will enroll. The state will be required to cover this group at the current match rate of 43% at a cost of approximately $70 million per year. So in effect, we are expanding Medicaid coverage in Kansas even if we opt out of the expansion.
Although the first 3 years of the expansion are covered by the Federal government, the Kansas Health Institute predicts that the first 7 years of the program will cost the state around $500 million over and above the current $1.3 billion state cost. The 7 year cost to the Federal government will be around $4 billion in Kansas. Our national debt threatens our national security as well as vital programs such as Social Security, Medicare and Medicaid. With bipartisan recognition that these three programs must be reformed, is it wise to borrow more money to fund Medicaid expansion at this time?
Going forward in Kansas our primary concern should be to insure continued Medicaid coverage to our disabled. We know that the costs to fund the Physical Disability Waiver, the Frail Elderly Waiver, and nursing home care are going to rise with the aging of our “baby boomer” generation. Do we really feel that we can meet these needs, while at the same time expanding Medicaid to cover a minimum of 500,000 Kansans?
Federal and state governments provide millions of dollars annually for a system of “safety net clinics” to provide health care coverage to the uninsured. This funding will continue regardless of whether our state decides to expand Medicaid. In Kansas, hospitals receive $76 million annually in Disproportionate Share Payments (DSH) to provide coverage to the uninsured. Although hospitals have expressed concern that the DSH funding will be reduced under the ACA, the secretary of Health and Human Services won’t make a ruling for another month. There is every indication that DSH payments will continue.
Page 2 of 2 - Many have stated that Kansas should get our share of federal funds by expanding our Medicaid program. Although I understand that argument, a significant reason that the federal government is running huge deficits is that every state is making a concerted effort to pull down as many federal dollars as possible. In Kansas we participate in two programs that are specifically designed to enhance the federal Medicaid match for hospitals and nursing homes. Although this program is very important, it was done in an effort to keep up with other states that had implemented similar programs.
It has been argued that expanding Medicaid will create more jobs in our state. However, when I was in business I would never have considered borrowing money to hire additional employees.
The Supreme Court, in their ruling regarding the ACA, gave states the option to opt out of participation in the Medicaid expansion provision. The court ruled that in regard to the Spending Clause Power of congress the law crossed the line resulting in unconstitutional coercion of the states. The court understood the financial burden the expansion would place on the states and the federal government.
In conclusion, these are the kind of decisions that keep legislators awake at night. Len makes a very compelling argument. I don’t claim to have all the right answers, but hopefully this article will outline my reasoning for opposing the Medicaid expansion.
I can be reached at 1-785-296-6989.