Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — “Repeal and replace,” that's what Republican gubernatorial candidate Sam Brownback says should be done with the new federal health reform law, which he consistently voted against in the U.S. Senate.

Brownback has called the new law, “an abomination,” and has vowed to “fight it all the way,” if elected governor.

His position is clear and succinct.

But the candidate has said little about why he opposes health reform. Or what he would do as governor to combat its implementation. The Affordable Care Act gives states a key role but also allows for federal intervention, if a state chooses not to act.

Brownback apparently said about as much as he intends to say about health reform - at least before the November election - during an Oct. 4 press conference that he held for the express purpose of criticizing health reform and endorsing fellow Republican candidate Derek Schmidt, who is running for attorney general.

"We don't have anything else other than what the senator said," then, according to Sherriene Jones-Sontag, a campaign spokesperson, when asked this week for additional details or comments regarding the candidate's views on health reform.

The campaign's official statement from the Oct. 4 event made five claims about the consequences of health reform for Kansans.

KHI News Service closely examined each, consulting various independent experts and source documents. The statements were found to be misleading or inaccurate and blind to any of the law's potential benefits. This story, first in a series of five, looks at what Brownback said about state Medicaid spending.

Beginning in 2014, the new reform law will make Medicaid available to all adults earning 133 percent or less of federal poverty guidelines or about $15,000 a year for an individual or about $24,000 for a family of three.

New Medicaid costs

Brownback claimed that the reform law would require, "between $160 million and $260 million in new Medicaid costs to Kansas," which would, " threaten funding for all other state priorities."

His campaign cited a report done for the Kaiser Commission on Medicaid and the Uninsured.

But John Holahan, a co-author of the study, called Brownback’s interpretation “bizarre,” and “just false.”

While it is true, the researcher said, that the study showed a likely 1.7 percent increase in Kansas Medicaid spending that could range up to $160 million over 10 years, that projection assumed a 42 percent increase in Medicaid enrollment, or 143,400 additional Kansans with coverage. A second scenario projected 192,000 new Kansas enrollees with a 2.6 percent increase in state Medicaid spending up to $260 million by 2019. Also carefully noted was that the report focused solely on some of the Medicaid aspects of health reform without taking into account other Medicaid changes in the law or other far reaching provisions and their fiscal impacts.

"We made it pretty clear in our report that there were a number of things we weren't considering," Holahan said.

For example, the health reform law will significantly boost the federal share of spending on the Children's Health Insurance Program, which would save the state money. It also could reduce or make unnecessary state support for many mental health services, safety net clinics and other programs mooted by the broad expansion of Medicaid. Nor did the report account for the new federal subsidies to low- and moderate-income families buying private insurance through the new state health insurance exchanges.

"Almost 20 times more than that amount comes into the state in matching (federal) dollars, so it's hard to see how anything else is hurt by this," Holahan said. "That's just a false statement."

The Kansas Health Policy Authority did a more complete analysis of the law's expected consequences.

That study by actuarial consultants schramm-raleigh Health Strategy looked at the reform's various provisions and concluded that they would save Kansas taxpayers about $206 million between 2014 and 2019. After that it would cost the state about $2 million a year, assuming that 131,000 currently uninsured, low-income Kansans are added to the Medicaid rolls.

The schramm-raleigh analysis included a couple of other possible scenarios, too. For example, if the state chose to increase by 5 percent its Medicaid reimbursements to doctors, hospitals and other Medicaid providers, then the new law would cost state taxpayers an additional $32.6 million to $36.3 million a year after 2020, depending on how many new people enrolled in Medicaid.

"We are comfortable with our estimates based on our knowledge of the program, but we understand how difficult it is to agree on a set of common assumptions and to predict the impact of changes that are this large," said Andy Allison, executive director of the health policy authority. "We welcome the discussion."

The Medicaid expansion is expected to reduce the cost of uncompenstated care for hospitals and other providers, costs that currently are shifted to patients with insurance or other means to pay. The health reform law is expected to reduce the amount of federal "disproportionate share" dollars some Kansas hospitals receive to help defray the costs of uncompensated care.

In any event, states are not obliged to participate in the Medicaid program and the reform law does nothing to change that. But states that choose not to participate lose federal money for the program, which is scheduled to increase significantly in 2014 as a result of the reform.

Wishing it would start sooner

The Kansas Health Care Consumer Coalition, the state's Native American tribes, the safety net clinics and many other organizations that struggle to provide health care to low-income Kansans are anxious to see the Medicaid expansion kick in.

“If there’s a negative side to this, I guess it’s that it doesn’t start until 2014, said Anna Lambertson, executive director of the consumer coalition. “We’d like to see it start in 2011.”

The health policy authority's analysis concluded that health reform will increase overall federal health spending in Kansas on those under age 65 by about $820 million a year, a sum that nearly rivals the amount of annual federal agriculture subsidies to Kansas farmers and landowners.

"That money's got to come from somewhere," said Jones-Sontag.

In fact, the federal reform law promises to shift even more of the state's health care costs onto federal taxpayers, which means a growing net gain for Kansas, a state that, according to the Tax Foundation, since at least 1982 has each year received more federal dollars than it sends to Washington thanks to farm subsidies, defense spending and health care programs such as Medicare.

The Tax Foundation ranks Kansas' combined federal, state, and local tax burden as 31st in the nation.

(Next: Health Reform and Medicare Advantage Plans)