KHI News Service

New Medicaid expansion plan introduced

Plan drafted by Kansas hospitals mirrors one championed by Indiana's conservative Republican governor

By Jim McLean | January 26, 2016

The Kansas Hospital Association has engineered the introduction of a Medicaid expansion bill modeled after a so-called consumer driven plan implemented last year in Indiana.

The measure, introduced Tuesday in House and Senate committees, would provide coverage to approximately 150,000 low-income but non-disabled adults by making them eligible for KanCare, the state’s privatized Medicaid program.

Tom Bell, president and chief executive of KHA, said the proposal was written with input from Kansas lawmakers, who he said wanted something patterned after Indiana’s more conservative approach to expansion.

“Our proposal isn’t exactly like Indiana’s, but it does have a lot of the same elements,” Bell said.

The Indiana plan was crafted by conservative Republican Gov. Mike Pence and approved by that state’s Republican-controlled Legislature. It requires beneficiaries to pay up to 2 percent of their monthly income and locks them out of coverage if they fall behind.

The Kansas plan, which KHA is calling “The Bridge to a Healthy Kansas,” also requires people earning above the federal poverty level to make monthly payments into personal health care accounts and, like the Indiana plan, terminates coverage for those who fall behind in their payments.

“The idea is to create some personal investment,” Bell said.

The Kansas proposal, which was introduced in the House Federal and State Affairs Committee and its Senate counterpart, also would make participants responsible for a $25 co-pay if they go to the emergency room for non-emergency care.

Photo by Susie Fagan Rep. Susan Concannon, a Beloit Republican, made a motion Tuesday to introduce the Medicaid expansion bill in the House Federal and State Affairs Committee.

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Rep. Susan Concannon, a Beloit Republican, made the motion to introduce the bill in the House committee, which traditionally honors such requests from members without requiring debate and a vote. However, Concannon and others don’t anticipate the bill will remain in the committee long enough for hearings. Rather, they expect House Speaker Ray Merrick, a Stilwell Republican and expansion opponent, to refer the bill to a new committee and work to keep it from coming to a vote on the House floor.

“It will be assigned to another committee and probably will not be worked this year,” Concannon said. “But at least we have a bill and opportunity for discussion. Whether it’s in committee or outside of committee, we have a bill and we can have some discussion.”

Concannon was one of several lawmakers that Merrick removed from the Health and Human Services Committee prior to the session because of their support for expansion. 

Both versions of the expansion bill will be given numbers Wednesday when they are formally introduced on the House and Senate floors. 

‘Beyond budget neutral’

Kansas hospitals have been urging passage of expansion for several years without success. The bill they backed last year, which merely authorized Republican Gov. Sam Brownback to craft an expansion plan and negotiate its approval with federal officials, received a hearing but no vote in either the House or Senate. 

Brownback opposes expansion but has said he might be willing to discuss a plan that meets certain requirements. Among other things, he has said, it must be budget neutral.

Bell said the KHA plan meets that requirement. He said it includes funding mechanisms that would generate more than the estimated $55 million annual cost of expansion.

“It is beyond budget neutral,” Bell said.

The savings and revenue-raising measures called for in the plan would generate an estimated $183 million in 2017 and $217.7 million in 2018. The total would increase to $240 million by 2020, according to KHA estimates.

“Studies have shown here that many of those 150,000 are working Kansans. They’re our working poor.”

- Rep. Susan Concannon, a Beloit Republican

The proposal creates several special funds to pay for expansion. One would collect premiums from beneficiaries that are expected to total $16.4 million in 2017 and grow to $20.5 million by 2020.

Between $7.9 million and $8.9 million a year flow into another fund from a drug rebate program. A third fund would capture a portion of the privilege taxes paid by the KanCare managed care organizations. That is expected to total $20.3 million in 2017 and average between $15 million and $15.8 million annually through 2020. 

In addition to the new revenue sources in the bill, the hospital association estimates that expansion would create opportunities to save up $113 million by reducing the need for KanCare services for which the state is now paying. 

Brownback and other Republicans have said any expansion plan should require that beneficiaries work. However, federal officials have consistently rejected expansion plans that contained a work requirement. So The Bridge to a Healthy Kansas proposal requires only that recipients be referred to an employment assistance program.

“That’s as far was we can go,” Concannon said. “But studies have shown here that many of those 150,000 are working Kansans. They’re our working poor.”

An uphill fight

Despite efforts to appease Brownback and Republican legislative leaders, KHA and other expansion advocates face an uphill fight.

For one thing, the bill doesn’t address one of Brownback’s top priorities, the elimination of waiting lists for Kansans with physical and developmental disabilities. Currently several thousand Kansans with disabilities are receiving medical care under KanCare but are wating for support services to help them live independently. 

Key legislators share Brownback’s objection to extending health benefits to non-disabled Kansans until the waiting lists are eliminated.

“The state has a responsibility to provide a health care safety net to the poor, disabled and elderly. My concern begins when we expand that to able-bodied adults,” said Rep. Dan Hawkins in a recent blog.

Hawkins, a Wichita Republican, chairs the House Health and Human Services Committee.

Advocates for Kansans with disabilities recently urged policymakers to stop using the waiting lists as reasons to oppose expansion.

Expansion advocates are hoping that the closure last fall of Mercy Hospital in Independence and the financial struggles of other Kansas hospitals will add urgency to the debate and win over some rural lawmakers. They say the hundreds of millions of additional federal dollars expansion would bring to the state could help offset reductions in Medicare reimbursements triggered by the Affordable Care Act and federal budget reductions. 

Brownback isn’t persuaded. In his State of the State address earlier this month, he said expansion isn't the answer to the problems facing rural providers. 

“It was Obamacare that cut Medicare reimbursements to rural hospitals,” Brownback said, referring to the Affordable Care Act. “It was Obamacare that caused the problem. We should not expand Obamacare to solve the problem.”

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