Kansas Hospitals Pushing Medicaid Expansion Hard
Expanding the Medicaid program in Kansas as part of the Patient Protection and Affordable Care Act could prove a boon to the Sunflower State, creating thousands of jobs and saving taxpayers tens of millions of dollars a year, according to a new report.
The report, released last week by the Kansas Hospital Association, comes at a critical juncture for states still on the fence as to whether to expand their Medicaid programs under the relaxed income cutoffs that are part of the ACA. Several of the redder states have surprisingly dropped their opposition to participating in recent weeks, enticed in part by the fact the federal government will foot the bill entirely for the first three years, and 90% of the costs after that – meaning a flow of billions of dollars their way with little risk in accepting them.
According to the KHA report, which was researched and authored by the Amherst, Mass.-based company Regional Economic Models Inc. in conjunction with George Washington University, Kansas would receive $334 million in additional federal funding in 2014 should it decide to expand its Medicaid program, a total that would rise to $533 million by 2020, as more residents received coverage. Hospitals and providers of outpatient care such as clinics would receive the lion's share, about 80% of that total.
As a result, the influx of money would lead to new jobs, the report concluded.
“While the majority of these jobs will be in the healthcare sector, a substantial share will occur in other economic sectors, reflecting the broad multiplier effect of the Medicaid expansion on many sectors of the state economy,” the report noted. “For example, to the extent that healthcare facilities need to expand to serve the newly covered patients, there will be real estate and construction costs that will boost employment in those sectors as well.”
Altogether, the report concluded that expanding Medicaid coverage would create 3,400 new jobs in 2014 and 4,000 in total by 2020. Most of those positions would with hospitals or organizations providing outpatient medical care. Kansas' gross state output would also increase by about $319 million per year, according to the report.
Conversely, the state itself would save $82 million cumulatively between 2014 and 2020 should it expand Medicaid, the report concluded.
Both the American Hospital Association and acute care lobbies on the state level have been pushing lawmakers hostile to the ACA to change their minds, fearful they will continue to lose hundreds of millions of dollars a year through providing uncompensated care. The KHA report – which ran 13 pages and included several supplements – appears to be no exception. And on Monday, the KHA released an opinion poll claiming 60% of the state's residents support the Medicaid expansion.
“A decision to forego Medicaid expansion is more than just a decision to refuse the federal funding associated with Medicaid expansion,” KHA President Tom Bell. “In fact, it amounts to additional real cuts to hospitals that are currently serving as the primary safety net for many uninsured individuals, and it comes at a time when the uncompensated care burden on those hospitals continues to grow at an alarming rate.”
However, Kansas has been generally reluctant to embrace Medicaid. The state has one of the tightest income restrictions for program eligibility in the U.S. Under current guidelines, a family of three has to earn less than $7,540 a year to be eligible, or 32% of the federal poverty level or less. As many as 162,000 more Kansans would be eligible to enroll in Medicaid under the income level restrictions of the ACA, which reach 138% of the federal poverty level. That's about $31,000 a year for a family of four, or more than quadruple the current income cutoff.
Moreover, another 53,000 residents who are currently eligible for Medicaid but not in the program may also enroll, according to data from the Urban Institute. That's part of the so-call “woodwork effect,” wherein marketing efforts to promote the expanded program attract those who had not enrolled in the past.
Despite the relative largess offered by the ACA in terms of cost subsidies, expanding Medicaid has met resistance from states with Republican governor, GOP-controlled statehouses or both.
However, that resistance has been fading in recent weeks, as Republican governors such as Ohio's John Kasich and Florida's Rick Scott – one of the fiercest critics of the ACA – have said they would be amenable to Medicaid expansion.
Nevertheless, it remains to be seen whether Kansas will participate. Its governor, Sam Brownback, is among the most conservative of the Red State executives, and its legislators are of a similar mind. Currently being debated in the Legislature is a resolution stating Kansas would not participate in Medicaid expansion.
Should Kansas decline to participate in the expansion, the KHA report noted that residents earning between 100% and 133% of the poverty level could enroll in the state insurance exchange and obtain commercial coverage heavily subsidized with tax breaks. However, those earning between 33% and 99% of the federal poverty level would have no place at all to obtain coverage under the ACA.
