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Brownback officials release their cost projections for Medicaid expansion

An estimated $1.1 billion in new state spending over 10 years

By Mike Shields | February 08, 2013


KDHE Medicaid Expansion Cost Estimate

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Summary of Cost Estimates on Medicaid Expansion

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The administration of Gov. Sam Brownback today released a summary of its estimated cost for Kansas to expand the Medicaid program.

More details on how the projection were made are promised for release next week, but officials said the state could expect to spend an additional $513 million over 10 years, if it does nothing different or $1.1 billion over the same period if policymakers choose to open Medicaid to people earning up to 138 percent of federal poverty guidelines.

Currently, Kansas has among the nation's most restrictive eligibility standards, limiting Medicaid coverage to poor children, pregnant women, the disabled and elderly. Childless adults are excluded regardless how little income they have.

Brownback officials said the cost estimates were prepared by the consulting firm Aon Hewitt. The projected cost, according to their findings, would be significantly less than some previous estimates but considerably more than others.

“We look forward to working with the State Legislature in the coming weeks to discuss the findings as the members deliberate the impact of expansion,” said KDHE secretary Dr. Robert Moser in a prepared statement.

Unlike some conservative GOP governors, Brownback has not yet said whether he would support expanding Medicaid.

But it is already clear that key Republicans in the Legislature would fight opening up the program, a move that is supported by many in the Kansas health industry, including the Kansas Hospital Association. The federal government, when it passed the Affordable Care Act in 2010, pledged to cover most of the cost of covering new Medicaid enrollees, once that portion of the law kicks in on Jan. 1, 2014. But many of the law's opponents say they doubt Washington can keep the pledge given the size of the federal deficit.

House Speaker Ray Merrick, a Stilwell Republican, told KHI News Service that he wouldn't support Medicaid expansion regardless the cost estimate.

"I don't believe any number we get is going to be a number that's cast in concrete," he said. "Where is the federal government going to get the money — other than borrowing it from the Chinese — to do what they say they're going to do. And we take the bait and we're sitting here two years from now counting the change saying, 'why did we do this?' Fool me once, fool me twice...I'm not really willing to go there again."

Brownback hasn't yet ruled out the possibility he would support an expansion, but comments from administration officials have led many to assume that is unlikely.

“For Kansas to expand the Medicaid program as the (Affordable Care Act) requires, the state would need more than $1 billion in new expenditures," said Sherriene Jones-Sontag, the governor's chief spokesperson. "This impact would be significant and would directly affect the ability of the state to fund other core responsibilities like K-12 education and public safety. And if the federal government fails to keep its promise to pay for its part of the expansion, the direct impact would be even greater."

Even before the Brownback administration projections, the Legislature's research arm already had noted 10 varying estimates of what the costs could be.

The reports are not easily compared — they vary, for example, in the timeframe of their estimates and the number of people projected to gain coverage — but roughly they range from a high of $2.1 billion to a low of about $171 million over six years. The Kansas Policy Institute, a conservative think tank based in Wichita, arrived at the high number. The Kansas Health Institute had the low estimate in that bunch but prepared three different scenarios with the most expensive coming in at about $750 million.

The defunct Kansas Health Policy Authority commissioned the first Kansas-specific cost projections. The actuarial firm of schramm-raleigh concluded the Medicaid expansion could cost the state as much as $35 million more a year or save it up to $39 million a year, depending how policymakers chose to implement the expansion.

KHI News Service coverage of Medicaid expansion

Medicaid Access Coalition launches online "ticker" showing foregone federal dollars (2/13/14)
→ KHI report: Nearly 182,000 Kansans in the ‘Eligibility Gap’ (1/11/14)
House speaker says Medicaid expansion is "up to the governor" (1/10/14)
KS Senate president says Medicaid expansion unlikely to gain approval this session (1/7/14)
Profiles of the coverage gap: Kathleen Christian (1/6/14)
Efforts continue to expand Medicaid in Kansas and Missouri (1/6/14)
Hospital association hires former Bush HHS secretary to help craft a plan Kansas Republicans might support (12/23/13)
Iowa wins approval to expand Medicaid by using federal funds to buy private insurance (12/11/13)
White House officials hold call to urge Medicaid expansion in Kansas (11/21/13)
Republican governor talks up plan to expand Medicaid — his way (10/28/13)
Challenger says Brownback owes voters a decision on Medicaid expansion (10/22/13)
Nearly 5.2M Americans fall in coverage gap in states not expanding Medicaid (10/16/13)
Sebelius: Feds flexible on how states expand Medicaid (9/22/13)
Sebelius says Kansas and Missouri are missing the boat on Medicaid expansion (9/20/13)
Medicaid expansion coalition finds strength in numbers (9/17/13)
Republican Gov. Corbett proposes expanding Pennsylvania Medicaid (9/16/13)
Kansas lawmakers urged to consider Medicaid expansion by Wesley CEO (8/29/13)
Estimating maneuver could help more people gain from Obamacare: How the poor might qualify for Affordable Care Act subsidies in states that don't expand Medicaid (8/12/13)
Report: States not expanding Medicaid stand to benefit most from doing so (7/18/13)
CMS won’t penalize hospitals in states slow to expand Medicaid (5/14/13)
Insurer Centene: We can do Arkansas-style Medicaid (5/14/13)
The Arkansas Medicaid Model: What you need to know about the 'private option' (5/2/13)
Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
Brownback says he's listening to Medicaid expansion proponents, opponents (4/5/13)
Oregon shows costs of putting Medicaid enrollees in private coverage (3/29/13)
Governor urged to expand Medicaid eligibility (3/27/13)
Arkansas Medicaid expansion attracts other states' interest (3/26/13)
Senate president prefers options remain open on Medicaid expansion (3/25/13)
States urged to expand Medicaid with private insurance (3/22/13)
Senate budget amendment underscores opposition to Medicaid expansion (3/21/13)
Study: Kansas employers face millions a year in possible penalties without Medicaid expansion (3/15/13)
More than 30 Kansas groups pushing for Medicaid expansion (3/12/13)
Health insurers see big opportunities in health law’s Medicaid expansion (3/8/13)
Medicaid expansion supporters to step up lobbying efforts (3/7/13)
Budget committee hears resolution opposing Medicaid expansion (2/22/13)
Legislators focusing on Medicaid expansion cost estimates (2/19/13)
Kansas hospital group study predicts expanding Medicaid would generate 4,000 jobs (2/18/13)
Brownback officials release their cost projections for Medicaid expansion (2/8/13)
Medicaid expansion bill introduced (1/22/13)
Kansas hospitals worried about loss of dollars for charity care (1/14/13)
Brownback compiling own estimate of Medicaid expansion cost (12/20/12)
Group urges Brownback to expand Medicaid eligibility (11/9/12)
Debate begins on possible Kansas Medicaid expansion (10/25/12)
Amerigroup CEO says states ‘need’ to go along with Medicaid expansion (7/11/12)
Kansas hospitals ready to get on with federal health reform, spokesman says (7/2/12)
Kansas AG claims partial victory in health reform case (6/29/12)
High court upholds Affordable Care Act, but ruling puts limits on Medicaid expansion (6/28/12)

→ Kansas Hospital Association: An opportunity for the Kansas Medicaid program
→ Americans for Prosperity-Kansas: Well-intentioned policies do more harm than good
→ Health Reform Resource Project: The cost of not expanding Medicaid
→ Rep. Jim Ward: Medicaid expansion essential for healthier Kansas
→ Rep. David Crum: Reasons for opposing Medicaid expansion
→ National Academy for State Health Policy: Much ado about Arkansas: Medicaid in the insurance exchange

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