Kansas hospital group study predicts expanding Medicaid would generate 4,000 jobs

Projected job creation due to Medicaid expansion, according to a report issued by the Kansas Hospital Association.

Projected job creation due to Medicaid expansion, according to a report issued by the Kansas Hospital Association. by Phil Cauthon

A study released today by the Kansas Hospital Association says that expanding Medicaid eligibility to levels called for in the federal health reform law would pump more than $3 billion into the state’s economy and create 4,000 new jobs by 2020.

The study, done for the association by the Center for Health Policy Research at George Washington University and Regional Economic Models, Inc., also shows that expansion would save the state more than it would cost.

Tom Bell, the association’s chief executive, said the projected economic benefits were too significant to be ignored by Gov. Sam Brownback and legislative leaders as they consider whether or not to expand eligibility for the healthcare program that serves poor, elderly and disabled Kansans.

Brownback has been a vocal opponent of the Affordable Care Act but has not made a decision on Medicaid expansion, which was made optional for states as the result of last year’s U.S. Supreme Court decision upholding the law.

“I think from our perspective, it’s not unlike the state landing a huge federal contract,” Bell said.

The impact of the expansion on the Kansas economy could rival that of the National Bio and Agro-Defense Facility in Manhattan, Bell said.

“That’s the way we look at it, as an opportunity for our state,” he said.

Bigger impact in Kansas

Since Jan. 1 in Kansas, the Medicaid program has operated under the name of KanCare. Three health insurance companies are under contract with the state administer it.

The health reform law requires that the federal government cover state costs of expanding Medicaid for three years. After that, the federal share would recede gradually until it reaches 90 percent, where it would remain.

Currently, Kansas’ Medicaid eligibility criteria for adults are among the most restrictive in the nation. Only those with children are eligible and only then if they earn less than 32 percent of the Federal Poverty Level (FPF) — currently $5,900 a year for a family of four.

Because those numbers are so low, expanding Medicaid would have a bigger impact in Kansas than in many other states by making all Kansans who earn up to 133 percent of FPL — $30,660 for a family of four — eligible for the program.

Various estimates suggest that expansion could add between 226,000 and 240,000 Kansans to the 380,000 now enrolled in Medicaid.

Net benefit to the state

A Kansas Department of Health and Environment report released last week estimated Medicaid costs would climb by $513 million over 10 years regardless of whether the state expanded eligibility for the program. That’s because heightened attention surrounding the expansion issue is expected to prompt many people who already are eligible but not enrolled to sign up.

Covering only those who are made eligible by the expansion would cost another $600 million over 10 years, the KDHE report said. Even so, the hospital association report said that expanding Medicaid would produce a net savings to the state of $82 million from 2014 to 2020.

“That’s front loaded into those first three years, but it’s still a substantial net benefit,” Bell said.

Governor undecided

Brownback has not ruled out expansion but neither has his administration shown much, if any, enthusiasm for the idea. Reacting to the KDHE cost estimate, Sherriene Jones-Sontag, the governor’s chief spokesperson, said expanding Medicaid would affect the state’s ability to fund other “core responsibilities.” The impact would be even greater “if the federal government fails to keep its promise to pay for its part of the expansion,” she said.

Bell said administrators at the association’s 126 member hospitals understand Brownback’s concerns, which are shared by many legislators. But he said they believe the Medicaid expansion dollars are needed to offset the anticipated loss of other federal funds that hospitals have used to cover the cost of caring for the uninsured.

“From an economic perspective for our members — especially those that treat a higher number of uninsured — they think it makes great sense to take a serious look this and see if we can make it work,” Bell said.

Find the various cost estimates of Medicaid expansion in Kansas, as well as archived coverage of the issue, here.

Tagged: obamacare, medicaid, act, aca, brownback, hospitals, share, disproportionate, affordable, dsh, expansion, care, kansas

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Richard Heckler 1 year, 6 months ago

FYI

Florida Gov. Rick Scott — a fierce foe of Obamacare who fought it all the way to the Supreme Court — on Wednesday announced that he would accept the Medicaid expansion under the health law.

He is the seventh GOP governor to do so — and arguably the biggest political symbol of grudging Republican acceptance that Obamacare is the law of the land.

Scott had campaigned against the health legislation even before he began running for office, and Florida led the 26 states that fought it in court.

On Wednesday, that changed as he agreed to take the federally financed expansion that would cover more than 1 million people — at least for the first three years.

“While the federal government is committed to paying 100 percent of the cost of new people in Medicaid, I cannot in good conscience deny the uninsured access to care,” he explained in a speech late Wednesday.

But Scott’s Medicaid endorsement comes with a caveat no other governor has proposed. He said he’ll push legislators to support just a three-year expansion of the program — which is after the end of his first term. That forces the state to re-evaluate the expansion before getting locked in for a longer-term commitment.

“This is a commonsense solution to dealing with this for the next three years,” Scott said. “It’ll give us time to think about how we can improve the system.”

Democrats and advocates of the health law were jubilant — but annoyed that it took so long.

"Three years of staunch opposition and tens of thousands of taxpayer dollars later, embattled Gov. Rick Scott today flip-flopped on the central issue which has defined his political career,” said Florida Democratic Party Chairwoman Allison Tant.

“This stunning about-face is merely the latest move to repackage a governor whose approval rating with Floridians remains as toxic as his tea party agenda,” she added.

The road from Obamacare foe to Medicaid expander was a long and strange journey for Scott, a former hospital executive who spent millions four years ago in a failed attempt to derail the health care bill in Congress.

From there, he launched a gubernatorial bid in Florida, took office in 2011 and quickly aligned himself with Govs. Rick Perry of Texas and Bobby Jindal of Louisiana — outspoken conservatives who have refused to lift a finger to implement Obamacare.

A few days after Obama won reelection, Scott gave a surprising interview to The Associated Press hinting a softening in his stalwart opposition. Amid unfavorable polls at home, Scott talked about wanting to work with the feds on the health law.

This article first appeared on POLITICO Pro at 5:19 p.m. on February 20, 2013.

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