Kansas Medicaid Expansion Forfeit Surpasses $1B

The Kansas Hospital Association estimates that about 150,000 Kansans who would have been eligible for coverage under Medicaid expansion make too much for Medicaid, but can't afford private coverage.

The state of Kansas this month stumbled across an inauspicious threshold.

Since Jan. 1, 2014 the state has forfeited an estimated $10.75 per second with its decision to reject Medicaid expansion under the Patient Protection and Affordable Care Act.

Those forfeited federal dollars can add up, and according to a live ticker at the Kansas Hospital Association's website, the total of could-have-been funding surpassed $1 billion sometime over this past weekend.

"That is very tangible money going out the door," says Cindy Samuelson, vice president for political fundraising and public relations at KHA. "It has affected not only individuals in Kansas and the folks who could be served by those programs, but also the communities that serve them, which are businesses, healthcare providers, and hospitals. The whole economic impact that healthcare has in our state is large, so there is an impact broader than just the population being served."

KHA estimates that about 150,000 Kansans who would have been eligible for coverage under Medicaid expansion have now fallen into the coverage gap. Even though they're working poor, they make too much for Medicaid, but they can't afford private coverage.

"Many of these are working Kansans that work sometimes more than one job, but who don't make enough money to be part of the exchange," Samuelson says. "These are low-income folks, dishwashers, daycare providers, health aides, construction workers, fast-food service workers; people who are working hard in our state, but who don't have an opportunity for coverage."

The loss of funding has also made life difficult for the state's hospitals. A report this month from iVantage Analytics identified 31 rural hospitals in Kansas as vulnerable, almost twice as many as the 17 Kansas hospitals flagged the last time the iVantage study was done in 2014. 

KHA estimates that the state's 84 critical access hospitals will lose an average $255,469 in funding in 2016 from the non-expansion, while 16 rural, non-CAH hospitals will lose $913,418, and 28 urban hospitals will each lose $6.2 million on average.

Critical Action Needed for Critical Access Hospitals

"It may be a lot smaller for critical access hospitals than the dollar amount for urban hospitals, but it has a huge impact on the bottom line in the communities they serve," Samuelson says. "It would make a big impact because they are struggling with so many different things now and this is just one factor that has been a harm versus a help."

A Non-Obamacare Alternative
Republican Gov. Sam Brownback as recently as during last month's State of the State address continued to blame Obamacare for the financial problems dogging rural providers, and to oppose any expansion of the program. Instead, Brownback called for a "working group" to provide him with an alternative to the Medicaid expansion by early 2017.

Hoping to be that alternative, the KHA is backing what it's calling a budget-neutral Bridge to a Healthy Kansas plan, which is modelled after the market-based HIP 2.0 Medicaid waiver program in Indiana.

The Kansas Bridge program would extend coverage to nondisabled Kansas adult residents earning less than 138% of the federal poverty level, and working 20 or more hours per week, or in work training programs. Exemptions would be made for students and stay-at-home parents. Those enrollees earning more than 100% of the federal poverty limit would pay a portion of their healthcare costs through monthly contributions to a health savings account.  

Underfunding, Understaffing Hobble Outcomes at Safety Net Hospitals

"We have in the legislation this path to personal responsibility and accountability, which means there is some skin in the game," Samuelson says. "This is a hand up, not a hand out. It has an opportunity for folks to pay a portion of their costs, just like many folks who are employed and have insurance through employers. But it is also designed to be that bridge between nothing and being part of the marketplace and have some opportunities for coverage."

Samuelson says KHA is trying to convince the governor and state legislators that, above all, their Bridge proposal "is not Obamacare."

"There is no support in our state for Obamacare," she says. "We are looking for a unique Kansas solution, one that meets the needs of Kansans by being budget neutral, not using any of the state general fund, a program that would also have skin in the game and provide a path toward health and personal responsibility. These are very important to Kansans. Our plan, a bridge to a healthy Kansas, takes those elements that our legislature and governor think are very important."

Even if the legislature and Gov. Brownback sign on, Samuelson says it's highly unlikely that any sort of Medicaid waiver program could be operational until at least 2017, or later. All the while, through the coming months and years, the live ticker will be running up the tab. Before Kansas can craft a waiver and get federal approval, the state's healthcare infrastructure could lose another $1 billion.  

As the late, great US Congressman and later Senator Everett Dirksen (R-IL) once said, "a billion here, a billion there and pretty soon you're talking about real money."