Rep. Jim Ward, D-Wichita, introduced a bill to expand Kansas’ Medicaid program, and Gov. Laura Kelly said in her state of the state address earlier this week that expansion will be a priority for her administration. However, opponents say expansion would be a poison pill for the state’s budget.
Ward’s bill, HB 2030, would expand Medicaid to include able-bodied, childless, adults who meet certain low income requirements. When he was running for Governor, Ward said he thought Medicaid expansion would be an economic boon to the Sunflower State, but Nicholas Horton, research director at the Foundation for Government Accountability, said that is unlikely. Thirty-six states already expanded Medicaid and he says it’s been a budget-buster with abysmal projections.
“On average, states have underestimated enrollment by half,” Horton said in a “Choosing Freedom” podcast, scheduled for broadcast on Kansas radio stations Jan. 19-20. “So they’re signing up more than twice as many non-disabled adults in Obamacare as promised.”
Horton listed Arkansas, Iowa, and Colorado as examples. In Arkansas, expansion advocates anticipated less than 200,000 able-bodied adults would enroll in Medicaid. Today, the state provides Medicaid for 330,000 able-bodied, childless adults.
In Iowa, they anticipated 123,000 enrollees. There are now 150,000, and in Colorado, 500,000 people, more than 2.5 times the number estimated, enrolled.
“I know I’m throwing a lot of numbers at you, but the point is really simple: government projections cannot be trusted. Advocates of Medicaid expansion always under promise in order to make the program look more affordable and over-deliver, enrolling literally millions more people nationwide than promised,” he said. “And ultimately, that means more able-bodied adults taking resources that could instead go to the truly needy.”
Kansas officials estimate that expanding Medicaid would add 150,000 people to KanCare’s roles, but Horton says if other states are used as a guide, the Sunflower State should anticipate 260,000 enrollees or more.
“In terms of cost, you’re looking at roughly $10 billion over 10 years,” he said. “…And even if someone wants to argue with those revised projections, third-party advocacy groups on the other side of the aisle say it’s going to cost at least $6.7 billion.” Ninety percent of costs would be paid with federal tax dollars, which would increase the national debt and deficit since the federal budget is already out of balance.
Kansas advocates say expanding Medicaid will stem the tide of rural hospital closings. When Mercy Hospital in Fort Scott announced it would shutter at the end of 2018, the Kansas Hospital Association pointed to the state’s failure to expand Medicaid as the primary reason.
“Since the opportunity initially arose, Kansas has left more than $2.8 billion on the table that could have gone toward strengthening access to healthcare in our state,” the KHA said in a statement last October.
Kelly echoed those sentiments in her state of the state address, saying Mercy Hospital’s closure will result in Bourbon County residents having to travel for emergency care or to get medical tests done.
“Just by expanding KanCare – the state’s Medicaid program – we can help keep these important facilities stay open and provide affordable health care to 150,000 more Kansans – no matter where they live,” Kelly said.
But expanding Medicaid doesn’t guarantee rural hospitals will remain open, according to Kansas House Majority Leader Dan Hawkins, a Wichita Republican.
According to an AON study for the Kansas Department of Health and Environment in 2015, expansion would have netted Mercy Hospital $2.8 million in additional revenue in 2018, but the company that owns the hospital lost $13 million and $15 million, respectively, the last two years for which financial statements are published, Hawkins said. He served for several years on the Kansas House Health and Human Services committee.
“Mercy Hospital has been running a deficit for several years now,” Hawkins said. “Medicaid expansion would not save them. It will never save a hospital from closing.”
In addition to extravagant costs to taxpayers–estimates suggest Kansas taxpayers would foot a $100 million Medicaid bill by 2020–Hawkins said expansion won’t increase access to healthcare, as its proponents suggest.
Doctors complain that Medicaid reimbursement payments don’t cover the costs of providing care.
“So doctors limit the the amount of Medicaid patients they will take, because they can’t afford it,” Hawkins explained. According to estimates, Medicaid expansion would add 150,000 able-bodied adults to the government program originally designed to serve the disabled. Those originally covered by Medicaid are less likely to have the mobility to go and search for a provider.
“All of a sudden, you start squeezing them out,” Hawkins said.
In addition to the challenges rural hospitals face from Medicaid’s low reimbursement rates, they also must contend with low reimbursement rates from Medicare. Medicare is a federal program that provides healthcare for seniors. In Bourbon County, where Mercy Hospital was located, nearly 20 percent of the population is 65 or older.
Since 2010 almost 90 rural hospitals nationwide have closed –many in states that expanded Medicaid, according to the National Rural Health Association. Cuts to federal Medicare reimbursements coupled with the Affordable Care Act, which favors high volume hospitals like Kansas’s top 10 hospitals where the majority of expansion funding would go, are slicing into rural hospitals’ bottom line.
“Bad-debt reductions, sequestration cuts and other cumulative Medicare cuts hurt rural hospitals disproportionately hard, because per capita rural America is older, poorer and sicker than their urban counterparts,” Alan Morgan, CEO of the National Rural Health Association, said.
Hawkins calls Medicaid expansion a ‘bandaid’ that won’t do what its proponents think it will.
“Medicaid expansion is really kind of one of those items that is the issue of the day and everyone wants to talk about it, but nobody really understands it,” he said. “If they did, they wouldn’t want to do it.”
If approved by the Legislature, Medicad expansion would further exacerbate a budget that’s already out of balance. A Legislative Research report shows more than a $1 billion shortfall over the next four years without any new spending and no money taken from the highway fund.