School administrators here say they are alarmed and confounded by the looming, new costs they face with the implementation of the Affordable Care Act.
“We've been talking about it (in anticipation) the last two years. I wish there was somebody smarter than me to find a solution,” said Chris Hipp, director of the North Central Kansas Special Education Cooperative Interlocal 636.
“We are not built to pay full health benefits for non-certified folks who work a little over 1,000 hours a year. I've spent hours and hours running every possible scenario. We can't pay for any of them, so it’s all kind of an academic effort really," he said.
As part of the federal health reform law, commonly referred to as Obamacare, larger employers across the country have a new set of insurance coverage obligations and fees they must pay. The new rules apply to commercial enterprises with 50 workers or more but also to public employers such as cities, school districts and the state of Kansas.
Kansas officials estimate the new fees alone will cost the State Employees’ Health Benefit Plan at least $4.7 million in 2014, or about $63 per worker. That’s without reckoning the added costs of the law’s new coverage requirements, much of which the plan already is absorbing.
For many businesses and larger governmental units, the new obligations are unwelcome but not unmanageable because they can be passed through either to customers or, at least partially, to health plan policyholders.
And for some governmental units, the expected costs represent a small percentage of overall spending. Lawrence officials, for example, estimate the new Obamacare fees will cost the city $137,200 in 2014, which could be considerably less than the potential costs of complying with a new conceal-carry firearm law passed earlier this year by state lawmakers.
Rural school districts
But the new health reform rules are particularly challenging for rural school districts and special education cooperatives, where officials say they have little or no place to turn for additional money, especially since state school aid has been held flat or reduced and more often than not the so-called “local option” school budget authority already has been maxed out.
“A lot of the districts and co-ops are looking at various options, including the option of getting out of offering health insurance and acknowledging that the most economical step for them is to pay the penalty and have their employees go to the exchange and get what's available through the marketplace. But a lot have not made that decision yet,” said David Shriver, assistant executive director for insurance services at the Kansas Association of School Boards.
The situation at the Phillipsburg special education cooperative offers a stark example of the complications many Kansas schools are facing, Shriver said.
The interlocal co-op is funded by 11 participating school districts that together cover an area of about 4,500 square miles spanning eight rural counties slightly west of the geographic center of the conterminous United States. It is square in the heart of the heartland. The districts collectively serve about 3,700 students, of which about 670 are in the special education program.
Hipp said NCKSEC Interlocal 636 has about 85 “certified” employees (mostly teachers) but also employs about twice that many people as “non-certified” teacher assistants or “paras” and other support staff.
Those workers, earning close to minimum wage, also are offered health benefits by the co-op. But about 100 of them don’t take it because it is too costly for them. The imbalance between their wages and their health insurance costs is so pronounced, Hipp said, that some of the para-educators who use the co-op’s health plan end up writing checks to the co-op two or three times a year just to cover their share of the benefits.
Under the health reform law, Hipp said, the interlocal must offer health coverage that meets the federal standard of affordability or pay a penalty for each employee that gets insurance through the subsidized federal exchange. The exchange — sometimes called a marketplace — is scheduled to be in operation by Oct. 1, with the coverage effective for policyholders beginning Jan. 1, 2014.
Here’s the dilemma for the co-op and similar organizations: On one hand, they can’t afford to pay their “non-certified” workers enough to make premium costs an affordable percentage of their incomes. But nor can the organizations afford to maintain a health plan and pay the annual penalties that must be paid by employers that have workers who opt for coverage through the insurance exchange.
Kansas insurance companies are preparing to sell a range of health plans on a new, online exchange being created by the federal government in an effort to make coverage more available to the thousands of people who have struggled to obtain it.
The Affordable Care Act, often called “Obamacare,” requires the new health insurance marketplaces to be up and running in every state by October, with the coverage sold through them effective on Jan. 1. But large numbers of Americans who stand to benefit most from the exchanges still know little to nothing about the law or how it will affect them, according to a recent poll by the Kaiser Family Foundation.
Anyone will be able to use the online marketplaces to purchase health coverage, but they are being created mostly to make private coverage more affordable for the uninsured and individual policies more widely available to those who don’t have access to group coverage through an employer.
“It’s going to create new opportunities for people who don’t have any insurance at all,” said Andy Corbin, chief executive of Blue Cross Blue Shield of Kansas, the state’s largest private health insurer. “And for those who don’t make much money, it may save them some dollars.”
Corbin said that plans offered on the exchange will “probably be more expensive” than the individual and small-group policies the company now sells. But he said in many cases the amount that consumers actually pay would be lower because of federal subsidies.
The exchange, or marketplace, also will give small businesses — those with fewer than 50 employees — new options. Rather than purchasing group insurance, they will be able to select a plan on the exchange and allow their workers to purchase individual policies. The businesses will have the option of helping their employees pay for the coverage, or not.
At least three insurance companies will sell multiple plans on the Kansas exchange, which will be operated by the federal government because Gov. Sam Brownback, a Republican opponent of the health reform law, declined to establish a state-run exchange. The companies are Blue Cross Blue Shield of Kansas, Coventry Health Care of Kansas and Blue Cross Blue Shield of Kansas City, which does business in two Kansas counties, Johnson and Wyandotte.
Subsidies to blunt higher premiums
Ron Rowe, a vice president for BCBS of Kansas City, predicted the cost of premiums for new, non-group policies would trend higher.
“Some people’s rates are going to go down and some are going to go up, but in aggregate it’s going to be about a 30 to 35 percent increase for that entire block of business,” he said.
But those increased costs could be mitigated for many. People who already have individual policies can keep them. And those who qualify for federal subsidies could end up paying less for more expensive and more complete coverage.
“Many people who are going to see big, high rate increases are going to qualify for a subsidy,” Rowe said. “And the amount that they’re going to pay out-of-pocket, net with the subsidy next year, will be less than they’re paying today even if the premium is significantly higher.”
For example, a person with annual earnings equal to 150 percent of the federal poverty level — $17,235 — would pay about $460 a year for a $5,000 policy, according to a cost-estimating tool developed by the Kansas Insurance Department. Federal tax credits paid directly to the insurance company would cover the remaining $4,540.
The credits, available only through the exchange, will be calculated on a sliding scale up to 400 percent of federal poverty guidelines, or annual earnings of $45,960 for an individual. But at that top level, the subsidy would amount to only about $630 leaving the consumer responsible for the remaining $4,370.
Despite the likelihood that many consumers purchasing through the exchange could pay less, both Corbin and Rowe said they anticipated a backlash from those forced to pay more.
“We’re trying to get out in front of the negative that’s going to come,” Corbin said.
To do that, he said, the company planned to do as much as it could to educate consumers about the exchange, the subsidies available and why some coverage would cost more.
Higher risks mean higher costs
Premiums are expected to rise because the reform law prohibits insurance companies from continuing practices they have historically used to reduce their risks. Those practices include denying or limiting coverage for high-cost individuals or capping their benefits. Going forward, the companies must sell policies to anyone regardless how sick they might be.
Kansas Insurance Commissioner Sandy Praeger, a Republican who has bucked the party line in supporting the law, said the old system often denied affordable coverage to people who needed it most.
“If you had any kind of pre-existing condition, you probably couldn’t buy (insurance) at all,” Praeger said. “You could be denied coverage because of allergies.”
Lawrence call center expected to add positions to handle insurance exchange calls.
Four states that have snubbed the federal health law by defaulting to the federal government to build new online insurance marketplaces and not agreeing to expand Medicaid are getting new jobs at call centers that will help consumers understand their new coverage options this fall. Kansas is one of the four states.
Up to 9,000 jobs are expected to be created at call centers to support the new federally run marketplaces. A U.S. Department of Health and Human Services spokeswoman said some of them will be added to existing Medicare call centers in Phoenix, Chester, Va., Lawrence, Kan., and Tampa, Fla. — all states with Republican leaders who oppose the law.
A fifth center in Coralville, Iowa and a sixth in Corbin, Ky., will also be expanded, she said. Plans are still being finalized for other locations, she said.
Of those states, only Kentucky is setting up its own online insurance marketplace that will help people shop for individual or small employer coverage. Iowa, will run its exchange in partnership with the federal government. The other states are relying entirely on the federal government.
Of the six states getting call centers, only Kentucky has committed to expanding Medicaid in 2014, even though governors in Florida and Arizona say they support it. So far, 22 states have agreed to expand Medicaid.
The jobs are through Vangent, a General Dynamics Information Technology subsidiary, which was awarded a $530 million one-year contract by the federal government to set up call centers to answer inquiries related to the insurance marketplaces in 34 states where they will be run in whole or part by the federal government.
The government estimates that next October, when the marketplaces go live, the call centers will be open seven days of the week, 24 hours a day, handling 6.1 million phone calls and 23,000 e-mails. The contract could be renewed for up to nine more years, making it potentially worth more than $5 billion.
States running their own marketplaces will have their own call centers.
The marketplaces are expected to expand health coverage to about 27 million people by 2016. Under the federal contract awarded to Fairfax, Va.-based Vangent, the company will also field inquiries about Medicare, Medicare Advantage and “other relevant programs,” the award announcement stated.
Advocates pushing Kansas officials to expand Medicaid acknowledge it is unlikely they will achieve their goal this year.
But they said they remain hopeful they can convince Gov. Sam Brownback and legislators next year to make more Kansans eligible for the program.
“If it’s not going to happen the first year, we’ll continue to build grassroots support. We’re not giving up,” said Anna Lambertson, director of the Kansas Health Consumer Coalition, one of the groups pushing for expansion.
Medicaid, known in Kansas as KanCare, currently provides medical and long-term living assistance services for about 380,000 poor, disabled and elderly Kansans. Expansion could increase enrollment in the program by as many as 240,000, according to various projections.
The federal Affordable Care Act initially required states to expand Medicaid eligibility. However, the U.S. Supreme Court decision that upheld the law made expansion optional for states.
Expansion would have a bigger impact in Kansas than in many other states. That’s because the state’s current eligibility criteria exclude all but the poorest adults. Only those with children and incomes less than 32 percent of the federal poverty level — about $6,000 a year for a family of four — can qualify. Implementing expansion would mean that adults in that same family of four could make more than $31,000 a year and qualify.
The Brownback administration has estimated that expanding eligibility for the $3.2 billion program would cost the state an additional $600 million over 10 years.
Door still open
Whenever asked about expansion, Brownback says things that suggest he’s more likely to say “no” than “yes” to it. But advocates said they remain encouraged by the fact he hasn’t rejected the idea.
“If he’s really looking at the options with an open mind — as he himself has said he’s doing — then I see him taking his time (to decide) as beneficial,” Lambertson said. “I’d rather that he take his time than just say ‘no’.”
Last week, Brownback again expressed doubts that the federal government could afford to keep its promise to cover all the costs of expansion for the first three years and no less than 90 percent thereafter. Despite his misgivings, he said, he continues to have “active conversations” with expansion advocates and legislators on the topic.
“It’s in the legislative process,” Brownback said. “Expansion would have to be addressed by the Legislature. They would have to budget it.”
Brownback’s requirement that legislators budget for it before he would sign off on it has advocates convinced a decision won’t be made this year.
Members of the House-Senate conference committee negotiating a final version of the fiscal 2014-15 budgets are scheduled to return to the bargaining table early next month when the Legislature returns to Topeka for what leaders hope will be a brief wrap-up session.
With the filing deadline approaching, the nation’s largest tax preparation company is letting its customers know how they are likely to be affected by the Affordable Care Act.
“After the ACA was upheld by the Supreme Court in 2011, we did some focus groups and some surveys to try and measure the public’s understanding of what all is in the ACA,” said Meg Sutton, senior advisor for tax and health care services at H&R Block. “It became pretty clear that there needed to be a process for educating our clients.”
Sutton called the 2010 federal health reform law the “biggest tax-code change in the past 20 years.”
The company’s tax preparers, she said, have been calling their customers’ attention to the ACA’s penalties for not having health insurance and to the subsidies that will be available to low- and modest-income families.
The information also is available on an H&R Block website.
“Client reaction has been very positive,” Sutton said.
The company’s surveys, she said, had found that 77 percent of its clientele didn’t realize their 2013 tax returns would be used to determine their eligibility for health insurance subsidies and that 44 percent of those between ages 18 and 34 were unaware of the penalties for being uninsured.
Sutton said the company’s tax preparers do not tell their customers to buy - or not to buy – health insurance. Instead, she said, customers are “informed of their options” based on the information in their 2013 tax returns.
The ACA’s mandate that almost all Americans either have health insurance or pay a penalty takes effect Jan. 1, 2014.
Marvin Lawton has been a tax preparer at the H&R Block office in Topeka for the past eight years.
“I’ve found there to be quite a cross section in the way people react – all the way from being OK with it to being dismayed by it,” he said. “Some are OK with it because they already have insurance and won’t be affected by it, some are bewildered over how they’re going to afford it and some wonder why they have to pay a penalty if everybody in their family is healthy."
Most of his customers with little or no health insurance have seemed pleased to hear about the subsidies, he said.
“I’ve had a lot of people who used to have insurance through their job but ended up getting laid off in the past year,” he said. “They know how expensive health insurance is. So when I tell them about penalties, they say ‘But I can’t afford it.’ Then, when I tell them about the subsidies and how they’ll be able to buy it through the exchange and be part of a larger pool, they’re OK with it. They say they’re OK with it if it’s affordable. And I say that’s the intent, that’s why it’s called the Affordable Care Act.”
H&R Block customers have the option of signing up for email alerts on changes in the new health reform law.
Sutton said, H&R Block appears to be the only national tax preparation firm helping its customers predict the law’s effect on their 2014 taxes.
Surveys have shown that about 60 percent of the nation’s taxpayers use tax preparation companies. H&R Block accounts for almost 20 percent of the tax-preparation market.
Kansas Health Consumer Coalition Executive Director Anna Lambertson said she welcomed the company’s initiative.
“I think it’s great,” Lambertson said. “I give them high marks.”
The coalition, she said, has been looking for ways to launch a similar informational campaign in Kansas.
“We can’t do it alone,” she said. “And H&R Block can’t do it alone. It’s going to take everybody getting involved.”
Sheldon Weisgrau, a spokesman for the Health Reform Resource Project, also praised the company.
“I assume they’re hoping this will lead to more people coming to them to have their taxes done,” he said. “But that’s fine. Anytime you’ve got someone providing accurate information it’s a positive.
Weisgrau said federal officials have announced plans for launching a major outreach campaign in June.
“They don’t want to start too early, which makes sense,” he said. “The exchange won’t be up and running until October.”
Mary McBain, chief executive of the Kansas Society of Certified Public Accountants CEO said the H&R Block initiative had not gone unnoticed.
“The major accounting firms have definitely been ramping up for this,” she said. “Some of the bigger firms have hired people just to work on ACA – that’s all they do.”
MacBain said her organization was committed to providing its members with accurate information about the law.
“All of us, I think, need to take a deep breath and not get caught up in all the emotion that’s comes with health care reform,” she said. “We need to be informed because, frankly, there’s a lot of misinformation out there.”
→ Find more information on health insurance exchanges and other health reform topics at khi.org/healthreform.
After months of trying to dance around the politically charged issue, the administration of Gov. Sam Brownback has openly acknowledged that the $139 million Medicaid enrollment system that it is building will be interconnected with the online health insurance exchange required by the Affordable Care Act, and that the system will be ready to go by the Oct. 1 federal deadline.
“It's just a connectivity kind of a thing,” said Dr. Robert Moser, secretary of the Kansas Department of Health and Environment, which is spearheading the project to overhaul the 26-year-old, paper-based system to a modern online one.
“I certainly appreciate the concerns that are tied to the political angst, but this program was well on its way when I came on board and my job is to make sure it gets completed successfully,” he said.
Entangled with the exchange
Overhauling the state’s antiquated Medicaid enrollment system has been in the works since at least 2009, when the project was called K-MED.
The project stalled briefly in August 2011, when Brownback returned a $31.5 million federal grant, most of which had been earmarked for developing the state’s new Medicaid enrollment system. Brownback said he was returning the grant because it was tied to the Affordable Care Act — which he he had pledged he would not implement prior to the U.S. Supreme Court ruling on the law, and later until after the 2012 federal elections.
Then that same month, administration officials announced a new contract with Accenture to develop the Kansas Eligibility and Enforcement System (KEES), using $118 million in federal funds to pay for the $139 million projected cost. K-MED became KEES.
A key condition of the federal funding was that the KEES system would have to be “interoperable” with the coming health insurance exchange — an online marketplace scheduled to launch Oct. 1 where consumers can compare and buy coverage that will begin Jan. 1, 2014.
In Kansas and the 25 other states that elected not to run their own health insurance exchanges, the federal government will build and operate them.
Moser said interoperability of KEES and the exchange means that — for consumers — there will be a single entry point for enrolling in private health insurance or in Medicaid, the state-federal health care program for low-income, elderly and disabled persons. Medicaid in Kansas is known as KanCare.
“You enter in some information, most of it is going to be yes/no. If you're eligible for Medicaid then it would pop up the KEES patient portal,” Moser said. “If it shows that your income level is such that you don't qualify for Medicaid…it's going to push your information over to the federal exchange. So those two systems literally will be handing back and forth inquiries.”
Moser said the fact KEES would interface with the insurance exchange was no different than integration with other federal computer systems, such as Homeland Security or the Internal Revenue Service.
“It doesn't really have that significant of an implication in my mind. But then again, I'm a physician and a little bit more patient-centered and look at the convenience factor. If that person is in a hospital setting and I think they need admitted, but they're worried about the cost because they don't have coverage, I'd like to be able to determine at that point in time 'Are they eligible for coverage' and use that as leverage to get them in to the hospital,” Moser said.
Is the whirl of hospital revolving doors slowing?
Federal health officials are now reporting that the rate of preventable and costly hospital readmissions is down for the first time in more than five years, which meant about 70,000 fewer hospital returns nationally in 2012 for the Medicare program alone.
With a strong push from the federal health reform law, scores of medical and social service workers around Kansas — like thousands of their counterparts in other states — are working together on projects that officials say show promise for reducing avoidable readmissions.
If they succeed, hospitals could be spared some of the Affordable Care Act penalties they face in the form of reduced Medicare payments and federal health care spending could be trimmed $8.2 billion by 2019, if projections from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) prove accurate.
Starting in October 2012, almost 30 of the 46 non-exempt Kansas hospitals were punished for relatively high readmission rates in the first year of the ACA program, according to information from CMS compiled by Kaiser Health News, a partner of KHI News Service.
Because of the potential financial sting attached, nobody wants to be on that penalty list when it’s redrawn for this year, especially since last year’s maximum penalty of a 1 percent reduction will grow to a maximum 2 percent and then 3 percent for 2014.
“Almost every hospital is looking at this, because they stand to gain or lose,” said Ken Mishler, chief executive of the Kansas Foundation for Medical Care, a Topeka-based, non-profit organization that is the federal government’s sole designated contractor in Kansas for improving health care quality. In federal parlance, the foundation is known as a Quality Improvement Organization or QIO.
Mishler’s group was directly involved with organizing projects in four locations - Hays, Topeka, Kansas City and Wichita – but there are others underway, too, including one by the Kansas Healthcare Collaborative, a 2008 creation of the Kansas Hospital Association and the Kansas Medical Society.
There is evidence the various efforts, some of which predate the ACA, may be working. The readmission rate in Kansas was already lower than the national average, but recent numbers show even that somewhat lower rate has dropped.
According to the Kansas Foundation for Medical Care there were 49.4 per 1,000 Medicare fee-for-service patients readmitted to Kansas hospitals within 30 days in 2011 versus 52.5 in 2010. That compares favorably to the national average of 56.8 per 1,000 in 2011 and 58.2 per 1,000 in 2010. Foundation officials say the ultimate goal is a 20 percent reduction.
The efforts to make that happen in Kansas vary place to place but among the things they have in common is the involvement of multiple types of medical and social service providers or agencies, not just hospitals.
The reason for that, experts say, is that one of the best ways to reduce readmissions is to make sure that patients get proper follow-up care or attention after they are discharged whether they leave the hospital to live alone at home - where they may receive limited assistance from a variety of outside sources - or a skilled nursing facility where they get more-or-less 24-hour attention.
‘A community problem’
“It’s not just a hospital problem. It’s a community problem and you have to get all the providers together. It’s not easy work. It’s hard work,” said Laura Sanchez, the project director for the Kansas Foundation for Medical Care.
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.
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.
Many Kansas hospital officials say they are worried that if state policymakers choose not to expand eligibility for the state’s Medicaid program, the hospitals will see a significant drop in the money they receive to help care for patients who can’t or won’t pay their medical bills.
Currently, 64 of the state’s 127 hospitals divide about $51.3 million a year in what are called Medicaid disproportionate share payments.
They use the money, a mix of federal and state dollars, to offset some of the costs of caring for the uninsured.
“It’s a significant amount of funding for us,” said Bruce Witt, director of governmental relations at Via Christi Health in Wichita.
In the current fiscal year, Via Christi Health is expected to receive almost $13 million from the disproportionate share payments, the most of any health care provider in the state.
Under the Affordable Care Act, also known as Obamacare, those payments are to be significantly reduced, starting in October.
“We’re being told that ‘disproportionate share’ won’t be completely phased out, but that roughly 50 percent will be going away,” said Tom Bell, chief executive of the Kansas Hospital Association. “It may end up being somewhere between 50 and 75 percent. We don’t know at this point.”
Though Via Christi could expect to lose the most dollars, the smaller, rural hospitals likely would be the hardest hit proportionately based on an analysis done for the KHI News Service by its parent organization, the Kansas Health Institute. The analysis calculated the likely revenue hit on each Kansas hospital based on recent payment histories, bed counts and inpatient stays.
State option on Medicaid
The law’s design, Bell said, preceded the U.S. Supreme Court’s June 28, 2012 ruling that gives states the option of choosing to not expand their Medicaid coverage to include non-disabled, childless adults whose incomes fall below 133 percent of the federal poverty level.
Since the ruling, governors in at least 10 states – Alabama, Georgia, Idaho, Louisiana, Maine, Mississippi, South Carolina, South Dakota, Oklahoma, and Texas - have said they will not expand Medicaid eligibility.
“Our lieutenant governor is saying he’s not sure that DSH (disproportionate share) is going away because the (U.S.) Supreme Court has said the federal government can’t penalize states for not going along with the Medicaid expansion,” said Shawn Rossi, a vice president with the Mississippi Hospital Association.
“We don’t know if that’s a correct assumption,” Rossi said, “but we are for sure telling our legislators that if DSH goes away, we’re definitely going to need something to take its place. We see a very large number of people who are uninsured.”
Brownback looking it over
Kansas’ Gov. Sam Brownback has been an outspoken opponent of the Affordable Care Act, has not yet decided whether to implement the Medicaid expansion.
The Brownback administration has not ruled out implementing the Medicaid expansion called for in the federal health reform law.
But a spokesman today told members of the Legislature’s Joint Committee on Health Policy Oversight that prior to making a decision administration officials want to develop their own estimate of how many Kansans are likely to sign up for the health care program and how much the expansion would cost the state.
“We’re continuing to study the issue,” said Mark Dugan, chief of staff for Lt. Gov. Jeff Colyer. “We would like to come to you with our own numbers.”
Currently, there are several competing estimates of how the expansion would affect Medicaid enrollment and the cost of the program. The latest, released earlier this month by the Kansas Health Institute indicated that approximately 240,000 additional low-income, disabled and elderly Kansans would enroll in a program that currently serves about 380,000. According to the KHI analysis, expanding Medicaid would cost the state an additional $519 million between its implementation in 2014 and 2020.
The KHI projections are higher than those in a 2010 report prepared for the now defunct Kansas Health Policy Authority and also higher than those in a state-by-state analysis done in 2010 by the Kaiser Family Foundation. However, they considerably less than those estimated in 2011 by the Kansas Policy Institute, a conservative think-tank based in Wichita, which has opposed the Affordable Care Act.
The KHI News Service is an editorially independent program of KHI.
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 — $5,900 a year for a family of four.
The ACA expansion would have a bigger impact in Kansas than many states. It would raise the eligibility threshold for all Kansans to 133 percent of FPL — $30,660 for a family of four.
Two of the four legislators who braved inclement weather to attend Thursday’s meeting of the 12-member committee made it clear that they favored the expansion.
Rep. Don Hill, a moderate Republican from Emporia, said that virtually all legislators regardless of party and ideology agree that the current health care system is broken and in need of reform to lower costs and reduce the number of people who are either uninsured and under-insured.
He said while the ACA is far from perfect, “it has some redeeming elements.” One of those, he said, is the Medicaid expansion because of its potential to extend coverage to many of the state’s 365,000 uninsured.
Citing the federal government’s promise to shoulder the cost of serving all those made eligible by the expansion for the first three years, Sen. David Haley, a Kansas City Democrat, asked, “Why can’t we cover more Kansans and why shouldn’t we?”
“I think we’re going to take a good look at it,” Dugan answered.
But, Dugan said, a factor that must be considered is whether or not the cash-strapped federal government can be counted on to keep its funding promise. After paying all of the costs of the expansion for three years, the federal government would gradually reduce its commitment until it reached 90 percent, where it would be maintained.
“He (Gov. Brownback) doesn’t have a high degree of confidence in the federal government maintaining that 90 percent commitment over the long term,” Dugan said.
Dugan said the federal government missed an opportunity to negotiate a compromise with Republican governors skeptical of the expansion when it rejected the idea of allowing states to increase eligibility to only 100 percent of FPL.
“That was an opportunity for middle ground that was lost,” he said.
Like Kansas Gov. Sam Brownback, Bob Laszewski is a staunch opponent of the Affordable Care Act.
Despite that, the Washington, D.C. consultant said at a meeting here today that Brownback is making a mistake by refusing to partner with the federal government to run the Kansas health insurance purchasing exchange that the law requires to be operational by 2014.
“Do the partnership. That is a no-brainer,” Laszewski said to about 100 legislators, lobbyists and health care providers at a meeting sponsored by the Kansas Health Institute, the parent organization of the KHI News Service.
Laszewski, whose client list consists mostly of health insurance companies, said it’s time for opponents of the law to stop fighting it and start doing what they can to ensure that it is implemented in a way that does the least harm to the industry and consumers. One way to do that, he said, would be to implement exchanges – new online marketplaces – that encourage competition among insurance companies rather than rely on regulations to moderate increases in premiums.
“Putting the insurance exchange up doesn’t mean you support the thing (the reform law), it means you are trying to minimize the damage,” Laszewski said, predicting that premiums in the individual and small-group markets would go up no matter who runs the exchanges.
Brownback last year blocked Kansas Insurance Commissioner Sandy Praeger’s attempts to establish a state-operated exchange, returning a $31.5 million federal grant in the process. Last month, the governor told Praeger, who also is a Republican, that he would not support her efforts to partner with the federal government to operate and fund the Kansas exchange.
“Kansans feel Obamacare is an overreach by Washington and have rejected the state’s participation in this federal program," Brownback said, explaining his decision.
Praeger, who also spoke at the KHI meeting, said she would try once more before a Feb. 15 federal deadline to convince the governor and legislators that partnering on an exchange would be better than allowing the federal government to run it. Federal officials recently extended the deadline in an effort to accommodate states where governors had opposed or held out on state participation pending the outcome of the November national elections.
“There is still some opportunity for us to retain some control,” Praeger said. “Our department looks forward to working with the Legislature and the governor to see if that still is an option. The decision really rests with them.”
Praeger said partnering with the federal government would allow her department to retain authority to approve the plans marketed in the exchange and manage consumer protection efforts. She said it might also prevent federal officials from over-regulating the exchange.
The ACA calls on states to expand Medicaid eligibility to include adults earning up to 138 percent of the federal poverty level — $30,660 a year for a family of four. But the U.S. Supreme Court decision earlier this year that upheld the law also made the program expansion optional for states.
Implementing the expansion in Kansas would make more than 300,000 additional adults eligible for a program that today serves approximately 380,000 Kansans – mainly women, children, seniors in nursing homes and people with disabilities.
A KHI analysis handed out at the meeting estimated that about 240,000 additional Kansans would enroll in Medicaid if the expansion were implemented in 2014, including 122,185 adults and 117,886 children. According to the analysis, expanding Medicaid would cost the state an additional $519 million between 2014 and 2020.
The projected cost and enrollment figures in the KHI analysis are higher than those in a 2010 report prepared for the now-defunct Kansas Health Policy Authority and also higher than those in a state-by-state analysis prepared in 2010 by the Kaiser Family Foundation. But the costs projected in the KHI analysis were considerably less than those estimated in 2011 by the Kansas Policy Institute, a conservative think-tank based in Wichita, which has opposed the Affordable Care Act and its implementation. The Kansas Policy Institute also projected the program’s cost through 2023.
Currently, the state’s Medicaid eligibility criteria for adults are among the most restrictive in the nation. Only those with children are eligible and then only if they earn less than 32 percent of FPL – $5,900 a year for a family of four.
Brownback hasn’t said whether he plans to implement or recommend the expansion for Kansas. But he has said that he doubts the federal government would keep its promise to initially pay 100 percent of the cost of serving all those newly made eligible by the Medicaid expansion. Under current law, the federal commitment would be good for the first three years, drop to 95 percent in 2017 and then to 90 percent in 2020, where it would remain.
Laszewski said covering currently uninsured Kansans in Medicaid would be significantly cheaper for taxpayers than providing them with tax credits to purchase private coverage in the exchange. And he said by agreeing to the expansion, Brownback and other Republican governors might be able to get federal officials to agree to their long-standing request to convert the program to block grants to states with fewer restrictions on how the money is spent.
“Put up or shut up, that’s what I say to Republican governors,” Laszewski said. “It gives you leverage to get what you’ve always said you wanted — autonomy. Go to the Obama administration and say, ‘OK, we’ll expand Medicaid but we’re not going to do it your way.’”
About 100 people rallied outside the Kansas Statehouse Nov. 9, urging state officials to expand Medicaid eligiblity as provided for in the federal health reform law.
A Lawrence pastor cast the expansion as a Christian imperative during a call-and-response exercise with the crowd.
“If Jesus was up in the Capitol would he make a choice to keep 130,000 people without care?” said the Rev. Joshua Longbottom, associate pastor at Plymouth Congregational Church in Lawrence.
"No," the crowd shouted.
“If Jesus was up in the Capitol, would he tell families that they just need to get better jobs so that they could afford to take care of themselves?” Longbottom asked.
Again, the answer was "no."
“Did Jesus say, ‘I’m sorry you can’t get to the well, Mr. Leper, but you need to cultivate some self-reliance’?” Longbottom said.
“No,” the crowd yelled.
“So I ask the question, Gov. Brownback, ‘What would Jesus do?” Longbottom said. “I thought the mark of his ministry was caring for the ill, caring for the sick, caring for the dispossessed, caring for the marginalized, caring the first for the least.”
Longbottom said he hoped the governor wasn’t a “…politician who puts on his Christianity like it’s a cardigan (sweater), using it to gain access to a constituency.”
Brownback, a conservative Republican, has been outspoken about his Christianity and penned a spiritual autobiography titled "From Power to Purpose."
He's been a consistent political foe of the Affordable Care Act, also known as ObamaCare, first in the U.S. Senate and later as governor.
He has said repeatedly that the majority of Kansans are opposed to the reform law and cites the success of the law's opponents in recent state elections as the proof.
Expansion not ruled out
Last week, the governor announced that he would block the state’s participation in a state-federal insurance exchange, one of the hallmarks of the new law. But unlike some Republican governors, he hasn't ruled out the possibility he would support some sort of Medicaid expansion.
"The Medicaid expansion is a separate issue" from the insurance exchange, said chief Brownback spokesperson Sherriene Jones-Sontag in an email Friday to KHI News Service in response to a question asking if the governor would oppose opening up the program.
"We are continuing to discuss options and alternatives with like-minded states and with our legislative partners in Kansas," she said.
The U.S. Supreme Court has upheld the Affordable Care Act, but said the law couldn't oblige states to expand their Medicaid programs. The law gives states the option of expanding their Medicaid programs to include adults earning up to 133 percent of federal poverty guidelines.
Kansas Insurance Commissioner Sandy Praeger said today that she wants to meet this week with Gov. Sam Brownback about how to move forward with implementation of the federal health reform law.
Specifically, Praeger said she wants to talk to Brownback about the state partnering with the federal government on a health insurance purchasing exchange. Kansas no longer has the option of designing its own online insurance marketplace but it can still partner on one with federal officials, if it acts quickly, she said.
Praeger said partnering with the federal government on an exchange would allow the state to maintain its authority to review and license insurance plans.
Praeger, a moderate Republican who supports the reform law, said she must let federal officials know by Friday, Nov. 16 whether the state intends to partner on an exchange. But she said she needs the governor’s blessing on that and a grant application her department has prepared, which must be submitted by Thursday, Nov. 15.
“The governor needs to agree that he won’t oppose us applying for the grant,” Praeger said. “He doesn’t have to give tacit approval necessarily, but just indicate it’s OK if we want to move forward on this.”
Brownback, a conservative Republican, voted against the Affordable Care Act as a member of the U.S. Senate and as governor has tried to block its implementation pending the outcome of a U.S. Supreme Court ruling on the law and then later the outcome of the presidential race.
Brownback in August 2011 rejected a $31.5 million federal grant intended to help Kansas develop an exchange as part of a program to develop models for other states to use.
Praeger said President Obama’s re-election means that the reform law won’t be repealed. It also means that states that have been slow to act will have to play catch up to meet approaching implementation deadlines.
Under the law, each state is to have an exchange operational by Jan. 2014.
“It’s time to stop resisting,” Praeger said.
A Kansas health consumer group is planning a post-election rally at the Statehouse in support of expanding the state’s Medicaid program.
Meanwhile, Lt. Gov. Jeff Colyer today headlined an event in Overland Park that was sponsored by a conservative think tank that opposes broadening the Medicaid program. Colyer, however, didn't make explicit what intentions, if any, the administration of Gov. Sam Brownback might have with respect to the issue.
Anna Lambertson, executive director of the Kansas Health Consumer Coalition, said the group "wants to get the dialogue started," on the potential benefits for Kansans, if policymakers here decide they will open up eligibility to include adults earning up to 133 percent of federal poverty guidelines.
Currently, the state's Medicaid program is mostly restricted to poor children, pregnant women, the disabled and the elderly. A non-disabled adult rearing children is currently eligible for Medicaid, if his or her income is below 32 percent of the poverty level – about $5,200 a year for a young mother with two children.
Kansas’ eligibility threshold is among the lowest in the nation.
Affordable Care Act
Under the federal Affordable Care Act, commonly referred to as Obamacare, states would have the option of expanding their Medicaid programs to include adults with incomes at or below 133 percent of federal poverty guidelines or about $30,700 a year for a parent in a four-person household or about $14,900 a year for a childless adult.
Brownback, an outspoken critic of the health reform law, has said he won't consider any aspect of the health reform law's implementation, including a possible Medicaid expansion, until after the Nov. 6 election.
Republican presidential candidate Mitt Romney has pledged to repeal the law, if elected.
Governors in at least six states – Florida, Georgia, Louisiana, Mississippi, South Carolina, and Texas – have said they will reject the expansion, citing concerns that it would prove to be too expensive and would expand – rather than shrink – the role of government.
Governors in at least 13 states have said they will expand the program.
According to a preliminary estimate by analysts at the Kansas Health Institute, if the expansion is approved here it could add 130,000 people to Kansas Medicaid by 2019.
Colyer was the main speaker at a Kansas Policy Institute (KPI) meeting today in Overland Park that drew about 60 people. He confined his remarks to describing the administration's rationale and goals for its KanCare Medicaid reforms.
He didn't offer new information, but instead repeated points he and other administration officials have made in various venues since unveiling their plan about a year ago. He didn't touch on the question of Medicaid expansion and did not take queries from the audience before leaving for another engagement.
But earlier in the two-hour event, KPI President Dave Trabert said that expanding Medicaid in the state could increase the program's enrollment by 254,000 people by 2023 and increase state general fund spending on Medicaid by $4.7 billion within a decade.
Under the law, the federal government, starting Jan. 1, 2014, would finance 100 percent of the costs of covering the newly eligible Medicaid enrollees for three years: 2014, 2015, and 2016.
The federal match would drop to 95 percent in 2017; 94 percent in 2018; 93 percent in 2019; and 90 percent in 2020 and beyond.
Currently, the federal government picks up about 57 percent of the state’s Medicaid cost. The state pays the remainder.
If policies proposed by GOP presidential candidate Mitt Romney and his running mate, Paul Ryan, were put in place, among the results would be deep cuts in federal Medicaid spending in Kansas and other states, according to a new report from the Kaiser Commission on Medicaid and the Uninsured.
Nationwide, federal Medicaid spending would drop $1.7 trillion between 2013 and 2022, according to the analysis. Of that, $932 billion would come from repealing the Affordable Care Act. The other $810 billion would come from reductions or savings realized by converting Medicaid to a block grant program for states, capping the amount of federal aid each state could receive.
Romney's Medicaid and budget proposals already have been approved twice in the Republican-dominated U.S. House but were not advanced due to opposition from the Democrats who control the U.S. Senate and the White House.
Romney once again voiced his support for Medicaid block grants and his vow to repeal Obamacare before a national audience during the third presidential debate on Monday night. Romney said the block grants had been successfully tried in Rhode Island and Arizona.
Kansas Gov. Sam Brownback, a Republican, also has championed Medicaid block grants and has asked federal officials to grant one to Kansas as part of a Medicaid waiver application his administration submitted with his plan to put virtually all Kansas Medicaid enrollees into managed care plans run by private insurance companies.
That request is still pending.
Supporters of the Romney Medicaid and budget proposals say they are needed to help cut the federal budget deficit. Critics say they would mean certain cuts in services to Medicaid patients and reduced payments to hospitals and other medical providers.
The Kaiser report, a more detailed reprise of one published in 2011, offered new information by breaking down the projected reductions in federal Medicaid spending in each state, should the Romney proposals be enacted.
Kansas would see a 36 percent reduction in federal Medicaid dollars over the 2013-2022 period, or about $12 billion, according to the report.
Kansas is expected to spend about $3.2 billion on Medicaid next year, with the federal government picking up about 57 percent of that cost.
The analysis drew on estimates prepared earlier by the Congressional Budget Office.
The projected reductions in spending from repealing Obamacare were based on an assumption that each state would expand the number of people eligible for Medicaid services under the law. The U.S. Supreme Court ruled earlier this year that states could not be obliged under the law to expand Medicaid eligibility.
Some Republican governors have signaled that their states would not add people to Medicaid, should the health reform law stay on the books.
Brownback has been a vocal opponent of the Affordable Care Act, but has not yet said whether he would propose expanding the program in Kansas. He has said he expects the reform law to be repealed.
Note: Updated 8:30 a.m. Aug. 7 to reflect last-minute campaign contributions.
A national organization that polices the accuracy of charges made in political campaigns has said mailed materials being used in the coordinated effort to oust some incumbent Republican state senators in Kansas are misleading.
FactCheck.org is a nonprofit project of the Annenberg Public Policy Center of the University of Pennsylvania.
The group examined direct-mail pieces that accused some incumbent senators of scuttling efforts to pass a state constitutional amendment opposing the federal health reform law commonly known as the Affordable Care Act or Obamacare.
“One mailer makes the slippery statement that the legislation ‘would have amended the Kansas Constitution to allow you to vote to opt-out of Obama’s new health care law,’” FactCheck.org researchers concluded. “That’s true. Kansans could have voted – but purely on a symbolic level.”
Kansans go to the polls Tuesday to decide a host of races in Republican and Democratic primaries. The most heated and expensive races so far have been those of Republicans seeking to hold or capture Senate seats.
For the most part, the mailed information has been sent on behalf of conservative Republicans vying against GOP opponents who are considered more moderate in their views.
Supporters of the proposed amendment, which over the course of two legislative sessions failed to get enough legislative backing to make it onto the ballot, said it would have allowed Kansans to opt-out of the federal health reform law. It would not have created that option and some opponents of the measure said it might mislead Kansans into thinking, for example, that they could choose not to have health insurance and avoid the federal tax penalty the law would impose on those who can afford health coverage but decide against it.
The proposal passed the House earlier this year but failed by one vote in the Senate, with six moderate Republicans voting with Democrats to deny it the needed two-thirds majority. A similar statewide ballot measure was approved in Missouri.
Some of the targeted moderates voted for the amendment but also voted for a provision to keep it off the ballot, if the U.S. Supreme Court upheld the health reform law, which it did in June.
Americans for Prosperity-Kansas, an organization that advocates for smaller government and lower taxes, produced several of the direct-mail pieces.
As a nonprofit advocacy group, AFP-Kansas doesn’t have to disclose the names of its contributors or its campaign expenditures. However, it’s known that Wichita businessmen Charles and David Koch were founders and major contributors to AFP.
State campaign finance filings show that their company, Koch Industries, has contributed about $175,000 to other organizations involved in the effort to defeat eight to 10 moderate Kansas Republican senators. Much of it – $125,000 - went to the Kansas Chamber, which has spent more than $675,000 on this year’s campaigns. More than $300,000 of that total was spent in the last few days.
“We need to be more competitive,” said Eric Stafford, a Chamber lobbyist. “Our state has a lot of attractive elements; one of those, unfortunately, is not its tax policy.”
Many of the moderates being targeted for defeat resisted Brownback’s successful push last session to cut income taxes. Brownback and the Chamber’s leaders said the tax cuts would stimulate the Kansas economy.
Health reform as a wedge issue
A recent mailer paid for by the Chamber’s political action committee features a photo of Sen. Vicki Schmidt affixed to a rubber stamp. The piece accuses the Topeka moderate of siding with the Democrats and President Obama on a host of key economic issues and charges that she voted against “efforts to stop Obamacare.”
Stafford said it was fair to focus on the health reform issue even though leading constitutional scholars said the amendment would have had no effect had it passed.
“Kansans didn’t have the opportunity to voice their opinion,” he said. “For our state Legislature not to give Kansans the right to voice their opinion on their ability to opt-out of the most controversial health care reform to take place in our country is unfair.”
Conservative State Rep. Joe Patton, who has the Chamber’s endorsement, is challenging Schmidt in the primary. The Chamber spent more than $17,000 on mailings to help Patton in the final days of the campaign.
The mailers, Stafford said, helped educate voters about who voted against the opt-out amendment or to weaken it.
Mark Desetti is on the other side of this year’s high-stakes campaign for control of the Kansas Senate. He lobbies for the state teacher’s union, the Kansas National Education Association.
The group has spent more than $237,000 this election cycle, much of it to help Democrats and moderate Republicans.
Desetti was critical of conservatives for using the federal health reform law as a wedge issue in state legislative campaigns.
“This election has nothing to do with Obamacare, and yet that’s what they’re running their campaign on as if the state Legislature is the one that is going to make that decision,” Desetti said. “It (the health reform law) has nothing to do with the Kansas Legislature.”
The Legislature could play a lead or major role in deciding whether the state will choose to expand eligibility for the Medicaid program. The federal law would expand eligibility to all adults earning 138 percent or less of federal poverty guidelines. But the U.S. Supreme Court, in its ruling, found that state’s have the option of expanding the program or not. If Kansas chooses to widen the program, an estimated 130,000 Kansas are expected to directly benefit from the coverage. Currently, about 383,000 Kansans are enrolled in Medicaid, but virtually all adults are barred except for pregnant women, frail elderly or disabled persons who are very poor.
But the Medicaid expansion issue has not been raised in any of the races to date. Patton, who held a Monday afternoon press conference to blast his opponent’s “lies and deceit,” for questioning his commitment to conservatism, indicated he was unfamiliar with the issue and said ”I would have to take a look at that.”
Talk of repealing the Affordable Care Act is partisan bluster that won’t come to pass even if Republicans sweep the November elections, a top Obama administration health care official predicted at a forum here today.
“Even those people who are talking about repealing, privately, they acknowledge that no, the law is here to stay,” said Jay Angoff, director of the U.S. Health and Human Services Department region that includes Missouri, Kansas, Nebraska and Iowa.
Angoff said that even if Republicans control the White House and U.S. House following the election, they would not have a large enough majority in the Senate to push through legislation to overturn the law. Senate rules require 60 votes to advance most legislation.
Angoff is a former Missouri insurance commissioner and has served as an advisor to Health and Human Services Secretary Kathleen Sebelius on health insurance cost and coverage issues. The forum, organized by the Health Care Foundation of Greater Kansas City, drew an audience of about 50 people.
'When the dust settles'
Kansas State Rep. Jim Denning, an Overland Park Republican, disputed Angoff’s comments, including taking issue with the director’s analysis of the potential congressional repeal. Denning is the retired chief executive of Discover Vision Centers, which has eight locations in Missouri and Kansas.
Angoff also predicted that states eventually would go along with the expansion of Medicaid eligibility included in the Affordable Care Act.
“When the dust settles,” he said, “states are going to realize what a terrific deal this is.”
In its June 28 ruling on the reform law, the U.S. Supreme Court left it up to the states to decide if they want to participate in the expanded Medicaid program.
Under the law, the federal government would pay 100 percent of the costs of the newly eligible Medicaid enrollees when the provision takes effect in 2014, gradually reducing its share to 90 percent by 2020.
The expanded eligibility would take in low-income residents under the age of 65 who earn up to 138 percent of the federal poverty level.
Kansas currently covers more than 350,000 individuals under its Medicaid program. Preliminary estimates project the state’s enrollment could increase by about 130,000 individuals under the health law expansion.
The Kansas Medicaid program costs about $2.8 billion a year. The federal government currently covers about 60 percent of the cost.
Good for small business
Angoff also said the Affordable Care Act was a great deal for small businesses, despite the fact that the National Federation of Independent Businesses was a lead challenger of the law in the suit before the Supreme Court.
He noted a provision that provides tax credits to businesses with 25 or fewer workers that offer health insurance to their workers.
Roughly 360,000 small businesses have already received assistance under that program, Angoff said, and more than 1 million more are eligible.
“We think it’s a great victory for the American public,” Angoff said of the Supreme Court decision.
Denning said it wouldn’t take a 60-vote majority in the Senate to repeal the Affordable Care Act.
He said the Senate could overturn the act with a simple majority through the budget process, much the way the law was passed in the first place.
He also disagreed that the Medicaid expansion was a good deal.
“This is not free money,” Denning said. “The federal government has no money.”
He said the federal government would have to run up its debt to pay for the Medicaid expansion.
He also said he was concerned that the federal government would pay for the expansion the first few years but then would pull back, leaving states to pick up more and more of the tab.
Denning also said the tax credit program for small businesses has not been nearly as popular as Angoff made it seem.
“He’s just talking sound bite stuff there,” Denning said of Angoff's remarks.
The tax credit program was complicated and resulted in costly plans that insurance brokers had little luck in pushing with their business customers, he said.
The chief executive officer of one of the private insurance companies that recently signed Medicaid managed care contracts with the state of Kansas said today that states shouldn’t refuse the offer of additional federal money to expand their programs.
James Carlson, CEO of Amerigroup, made the comment during a discussion with Wall Street analysts about his company’s potential sale to insurance giant WellPoint.
“When you step back from this, there are billions of dollars of federal money that are going to flow into states,” Carlson said in a report published by Politico. “We think the states are going to need to take it.”
Kansas insurance officials are evaluating WellPoint’s bid for Amerigroup, which is one of three companies selected by the state to manage care provided to the approximately 350,000 poor, elderly and disabled Kansans enrolled in Medicaid. The other two are United Healthcare of the Midwest, a subsidiary of United Healthcare, and Sunflower State Health Plan, a subsidiary of Centene.
Several Republican governors have said they don’t intend to expand eligibility for their Medicaid programs now that the U.S. Supreme Court has ruled that the federal government can’t withhold its share of funding for the program in states that decline to do so.
Kansas Gov. Sam Brownback has reiterated his opposition to the Affordable Care Act in statements since the ruling, but he has stopped short of saying the state won’t implement the Medicaid expansion on schedule in 2014.
Brownback spokesperson Sherriene Jones-Sontag said the governor still favors repeal of the health reform law and has urged voters to reject it at the polls in November by voting against President Obama’s re-election.
The expansion would result in a more dramatic increase in Medicaid eligibility in Kansas compared to other states. Currently, Kansas adults with dependent children can’t qualify for the program unless they earn less than 27 percent of the federal poverty threshold – about $6,000 for a family of four. Adults without children aren’t eligible for Medicaid unless they are disabled.
The ACA expansion would make everyone who earns less than 133 percent of the poverty threshold eligible for Medicaid. That means a family of four could earn up to about $30,000 and still qualify.
If implemented, the expansion could add as many as 150,000 Kansans to Medicaid rolls.
Related coverage on KHI.org:
Republicans are working still to repeal it, but even before the U.S. Supreme Court ruled that the Affordable Care Act was constitutional, many of its major changes were under way for Kansas hospitals, doctors and other medical providers.
In fact, some representatives of doctor and hospital groups in Kansas and nationally say that many key requirements of the law were inevitable or bound to happen with or without the law, simply because the status quo of the health care industry was unsustainable because of its costs.
In 1965, U.S. health care spending accounted for about 6 percent of the gross domestic product; by 2009, it represented about 17 percent. One culprit for the rising cost, experts say, has been payment systems that reimburse providers more for the volume of their services than for the quality or effectiveness of the care.
“I don't want to downplay the significance of the (Supreme Court) ruling,” said Tom Bell, chief executive of the Kansas Hospital Association, “but I think it’s been clear for some time that a lot of the ways that the system is changing - the movement away from fee-for-service, value-based purchasing, those sorts of things - those things were going to continue whether this law was struck down or upheld. ... So from that perspective, (the decision) was maybe not quite as momentous as we’ve been hearing on the cable news networks.”
A report on the ACA by the national Physicians Foundation published soon after the law was passed in 2010 generally was negative about the reform’s anticipated consequences, particularly for the 32 percent of the nation’s doctors working in individual, private practices of one or two physicians. For them, the authors concluded, the law almost certainly means that their forms of practice “will be largely, though not uniformly, replaced” by new arrangements that will make many of them salaried employees of hospitals or larger group practices.
Nonetheless, the report concluded, “health reform was necessary and inevitable. The impetus of informal reform would likely have spurred many of the changes (required by the ACA) independent of formal reform.”
Quietly moving forward
So as politicians continue to fight over the law, forward-looking hospitals and doctors for at least the past two years quietly have been preparing for and adopting its various provisions.
“The Supreme Court’s ruling keeps in place improved access to health care through expanded insurance coverage and important insurance reforms, which were key elements of the Affordable Care Act,” said Jeff Korsmo, chief executive of Via Christi Health, a Catholic-affiliated system that is the largest private provider of health services in Kansas. “The way we deliver health care has been changing since the Affordable Care Act took effect two years ago, and it will need to change even more dramatically in the years ahead.
“The growth in the cost of health care in the United States is simply unsustainable,” Korsmo said after the court ruling, “and it’s going to get worse because 10,000 baby boomers a day are reaching Medicare age. Those costs, combined with our federal and state governments’ fiscal challenges, all call for major change in health care.”
The head of the Kansas Hospital Association said today that most of the group's member hospitals have accepted the U.S. Supreme Court decision to uphold the Affordable Care Act and are ready to embrace reform.
“The number one thing I’m hearing from my people is, ‘Oh my gosh, are we going to have to go through this health reform political debate again?’” said Tom Bell, noting that he and other health care officials had hoped the ruling would give them a clearer picture of the future.
So far, he said, that’s not happened.
“I’m not so sure that – because of our political environment – we have any more certainty today than we did last week,” he said. “It’s hard to plan.”
Bell spoke during a Kansas Health Institute-sponsored panel discussion on the court’s ruling. Also participating on the panel were:
• Bill Rich, professor of constitutional law at Washburn University School of Law.
• Kansas Insurance Commissioner Sandy Praeger.
• Jay Angoff, director of the U.S. Health and Human Services regional office in Kansas City.
Angoff told the audience that over time “cooler heads are going to prevail” as the public learns more about the law’s benefits and costs.
The court's decision left intact the law's requirement that everyone who can afford health insurance buy it or pay a penalty. But the ruling also made the law's planned Medicaid expansion optional for states. Several Republican governors already have said they do not intend to expand Medicaid eligibility in their states. Gov. Sam Brownback hasn't said yet what his intentions might be with respect to the expansion, which could mean as many as 130,000 additional Kansans would gain eligibility.
Brownback has said he would take no steps to implement the Affordable Care Act until after the November elections, based on the assumption that Republicans will prevail in their bid for control of the White House and Congress and then repeal the law.
If Kansas opts not to expand its Medicaid coverage, Bell said, the state’s hospitals would be put in a position of still having to care for thousands of uninsured people in their emergency rooms while losing millions of dollars in federal disproportionate share payments.
Currently, the disproportionate share payments are meant to help hospitals offset the costs of caring for the uninsured.
Under the Affordable Care Act, Bell said, the payments would be phased out because it assumes the vast majority of the hospitals’ patients will be insured under Medicaid or otherwise by 2014, when the law's major coverage provisions are scheduled to kick in.
“There are a lot of things that really need to be looked at closely,” Bell said.
A Wichita legislator who attended the event said he thought fellow lawmakers would act in the 2013 legislative session to authorize Kansas' participation in the Medicaid expansion.
“If you’re a legislator and the hospitals’ (profit) margins in your district are tied to their DSH (disproportionate share) payments, how do you vote against giving them more patients with insurance through a Medicaid expansion if you know there isn’t going to be anything to replace the DSH payments with?” said Rep. Jim Ward, a Wichita Democrat who serves on the House Health and Services Committee. “At what point does ideology get by the practical reality?”
→ Related story: States balk at expanding Medicaid
In the wake of today's U.S. Supreme Court ruling, Kansas could still avoid ceding total control of its health insurance exchange to the federal government if it moves quickly, Insurance Commissioner Sandy Praeger said.
“That’s probably the best-case scenario now from an exchange standpoint,” Praeger said.
But that would require a meeting of the minds between Praeger and Gov. Sam Brownback and meeting a mid-November deadline for alerting federal officials to the state's intentions.
Last year, Brownback returned a $31.5 million federal grant that would have helped the state develop its own exchange. And today, after the court's decision, the governor vowed he would do nothing to implement the Affordable Care Act's provisions until after the November elections.
“Stopping ObamaCare is now in the hands of the American people," Brownback said. "It begins with electing a new president this fall.”
Opposition from Brownback and Republican legislative leaders resulted in Kansas missing deadlines for establishing its own exchange. Under the federal law, each state must have an operational exchange by Jan. 1, 2014, with plans for it certified by Jan. 1, 2013. States that choose not to implement an exchange on their own would cede that authority to federal officials.
Kansas missed the cutoff for developing its own exchange but could still partner with the federal government on one, an arrangement that Praeger said would allow state officials to set rules for insurance company participation in the online marketplace and direct consumer assistance efforts.
“Plan management and consumer assistance are two functions that our industry and our agent community are most concerned about. So, I think they would like us to retain control,” Praeger said.
Praeger said federal officials have told her that she doesn’t need explicit authorization from Brownback to proceed. She could sign the letter declaring the state’s intention to partner with the federal government on an exchange.
Despite those assurances, Praeger, a moderate Republican who supports the health reform law, said she doesn’t want to circumvent Brownback, a conservative Republican who continues to fight the law.
“Even if I’m allowed to sign the letter, I’m not going to do that unless the governor at least agrees they won’t try to block our efforts,” Praeger said. “After the dust settles, I think we (Praeger and Brownback) will have a conversation and we’ll sort through all of the issues.”
As outlined in the Affordable Care Act, individuals, small-business owners and people whose incomes qualify them for federal subsidies and tax credits would shop for policies using the exchange websites that would help the shoppers sort through coverage and price options. The exchange also could be used to determine eligibility for the Medicaid program, eligibility for which would be expanded under the law where states choose to do so.
→ More in-depth coverage of the Supreme Court's ruling on health reform and its implications for Kansas at khi.org/aca-ruling.
For many, the term co-op evokes images of grain elevators, Depression-era workers stringing electric lines or maybe the more contemporary picture of a place where local-food devotees go to get a weekly helping of fresh produce.
But a group at work in Wichita has a different vision. They are working to develop a member-owned co-op that would provide thousands of Kansans with health insurance. And they want the coverage to be different from plans offered by traditional carriers.
Anne Nelson, associate director of the Central Plains Health Care Partnership in Wichita, an affiliate of the Medical Society of Sedgwick County, said the goal is to create a Kansas cooperative that offers individual and small business coverage that is both affordable and innovative in that it will emphasize patient-centered and preventive care.
“There will be a direct relationship with the people who are served by the products in the plan. If a product isn’t working based on consumer feedback, the consumer leaders (of the cooperative) can make changes,” Nelson said.
If the co-op does well financially, it would be required to use money not needed for claims or state solvency requirements to lower premiums or increase benefits.
Working with a small planning committee that includes health care providers, lawyers, actuaries, insurance experts and representatives of the business community, Nelson is preparing to apply for millions of dollars in federal loans to fund the launch of the nonprofit health insurance cooperative. She said she plans to submit the loan application this fall to the U.S. Department of Health and Human Services, which already has provided nearly $850 million in start-up and sustainability loans to health insurance cooperative in 10 states.
The loans approved earlier this year ranged from around $57 million to a cooperative in Oregon to nearly $175 million to the Freelancers Health Service Corporation, a union-affiliate co-op in New York. Midwest Members Health, which is planning to offer coverage to residents of Iowa and Nebraska, received $107 million.
“We don’t know yet what our application will be. But it’s a multimillion-dollar project,” Nelson said.
Money in health reform law
Creating more competition in the health insurance marketplace is one of the objectives of the controversial and still not-well-understood Affordable Care Act. The health reform law authorizes $3.4 billion in low-cost federal loans to start and help sustain at least one consumer-governed health plan in each state