KHI News Service

Connecticut 1st state to embrace health reform’s Medicaid expansion

Kansas not yet ready, officials say

By Dave Ranney, Mike Shields | June 22, 2010

Federal officials have approved Connecticut's plan to add low-income adults to its Medicaid program, the earliest advance on the new federal health reform's goal of expanded Medicaid coverage nationally.

The approval means Connecticut will become the first state in the nation to adopt those elements of the new law and become the first to collect accompanying federal aid dollars that will be retroactive to April 1, when the new federal law became effective.

Officials at the U.S. Department of Health and Human Services said the state's speed in adopting the new law will save Connecticut at least $53 million by July 2011.

But a recent 10 percent cut in state Medicaid reimbursements to doctors and other medical providers that won't be restored until July 1, means Kansas has work to do before it can begin the transition to broader Medicaid enrollment, according to Andy Allison, head of the Kansas Health Policy Authority, the agency that oversees the state's Medicaid program.

Rebuilding relationships

"It is not an option we have pursued," Allison said of the development in Connecticut. "We have not recommended any expansion of services. We are just coming off, in July, a 10 percent reduction in Medicaid. We have some relationships to rebuild with providers."

All states will be required to expand eligibility for their Medicaid programs by 2014. Currently, in most states, including Kansas, Medicaid is offered only to the poor elderly and disabled or low-income parents.

The reform law will open the program to all adults with annual earnings 133 percent or less of federal poverty guidelines, or about $14,400 a year.

“We applaud Connecticut’s speedy action to expand coverage for its lowest-income residents who will now have reliable access to affordable, quality care as a result of the incentives contained in the Affordable Care Act,” U.S. Health and Human Service Secretary Kathleen Sebelius said in an issued statement. “Today’s action will bring substantial new federal support to the state and help improve the health of its citizens.”

Prior to passage of health reform, states could only cover childless adults by applying for a waiver of Medicaid rules. The waivers were temporary and states had to meet strict criteria for approval and renewal. The Affordable Care Act requires states to cover all low-income individuals in Medicaid starting in 2014, but also allows states to get federal funding to enroll them right away.

The Centers for Medicare & Medicaid Services (CMS) approved Connecticut’s state plan amendment on Monday. Connecticut officials estimated that about 45,000 adults would become eligible.

“We hope other states will follow Connecticut’s example and not wait four years to provide health benefits to those who desperately need them,” said Marilyn Tavenner, acting administrator for CMS.

No Kansas timetable

But there is no timetable yet in Kansas for adopting the reform changes other than the federally imposed deadlines, which many officials here say will arrive soon enough.

Kansas, like most states, has seen its tax revenues decimated by the recession. The health policy authority, like most state agencies, has seen its operating budget cut.

"We would support that discussion," of how and when Kansas might begin expanding Medicaid enrollment, Allison said, "but our agency doesn't have the capacity to do that kind of expansion and I don't think the state is in the right place," to do what Connecticut has done.

Prior to passage of the new health care law, many uninsured adults in Connecticut received coverage through a state-funded program, known as State-Administered General Assistance (SAGA). Connecticut will now enroll in Medicaid individuals whose annual income is up to 56 percent of poverty guidelines or $6,650 per year for an individual.

Historically, the federal government has paid 60 percent to 70 percent of the costs of Medicaid, leaving the balance for states to cover.

Under provisions of the Affordable Care Act, beginning Jan. 1, 2014, the federal government will pay 100 percent of the costs related to newly eligible Medicaid enrollees. Then, starting in 2017, the federal match will decline gradually until it reaches 90 percent of allowable costs.

Health policy authority officials have predicted that the greater federal role in Medicaid will save the state money, at least in the early years of the expansion.

Tuesday marked the 90th day since the health reform law went on the books.

CMS officials said besides Connecticut, they also were working with the District of Columbia and have been in discussion with a couple of other states interested in early phase-ins of the Medicaid expansion.

"We are currently working with the District of Columbia on their proposal to provide coverage to individuals with incomes up to 133 percent of (federal poverty guidelines) and CMS is providing technical assistance to other states that have expressed interest in taking up the early option," said Mary Kahn, a public affairs specialist for CMS.