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Election Clouds Medicaid Expansion Forecast In Kansas

Kansas News Service/File photo

Medicaid expansion advocates in Kansas say they’ll move forward with legislation despite national election results that signal a repeal of Obamacare.

But they are a lot less optimistic about their chances than they were before last week.

“There is still significant support in Kansas for expanding KanCare both in the public and among legislators,” said David Jordan, director of the Alliance for a Healthy Kansas, a nonprofit advocacy group formed to push for the expansion of KanCare, the state’s privatized Medicaid program.

Jordan is technically correct. Primary and general election victories by dozens of moderate Republicans and Democrats appear to have given expansion advocates majorities in both the Kansas House and Senate.

But that may not matter given the results of the presidential election and those that preserved Republican majorities in Congress. They all but ensure that substantial changes will be made in the federal health reform law that gives states financial incentives to expand their Medicaid programs.

“Clearly, this changes the landscape,” said Tom Bell, president and CEO of the Kansas Hospital Association, which maintains that expansion is critical to stabilizing the finances of several struggling hospitals across the state.

“I think anybody who said that it doesn’t change the dynamics of this issue isn’t being honest with themselves,” Bell said.

That change is evident when talking with newly elected Kansas lawmakers.

In her bid to unseat a conservative Republican incumbent in the August primary, moderate Republican Patty Markley not only supported Medicaid expansion, she said it was “morally reprehensible that we have not done it.”

Expansion would provide coverage to more than 100,000 Kansas adults, many of whom are uninsured and don’t qualify for federal subsidies to help them purchase insurance in the Obamacare marketplace.

Reached after her general election victory last week, Markley — who will represent Johnson County’s 8th House District when the 2017 Legislature convenes in January — said while she still supports expansion, it may no longer be feasible given the changes in Washington, D.C.

“We’ll just have to wait and see how that plays out,” she said.

Repeal and replace, with what?

At the moment, it’s clear that President-elect Donald Trump and GOP congressional leaders want to make good on their collective campaign promise to “repeal” the Affordable Care Act. What isn’t clear is what they intend to put in its place.

In post-election interviews, Trump has said he wants to retain certain popular features of the health reform law, including those that prohibit insurance companies from denying coverage to people with pre-existing conditions and allow children to remain on their parents’ policies until they turn 26.

But Jordan and others who are anxiously reading the tea leaves hope that Trump can be convinced to preserve other parts of the law as well.

“There aren’t many details out there, but there is recognition that you just can’t take health insurance and health security away from 20 million people without having a conversation about what it looks like and how it plays out,” Jordan said, referring to the number of Americans who over the last three years have purchased coverage in the Obamacare marketplace or obtained it through Medicaid expansion.

As president of the hospital association, Bell said an immediate priority for him is to seek protection from members of Kansas’ congressional delegation. A worst-case scenario, Bell said, would be locking in a system that benefits the 31 states and District of Columbia that have expanded their Medicaid programs.

“The election has changed some things, but what hasn’t changed is the fact that we — as a state — are at a disadvantage when we compare ourselves to other states that haven taken advantage of expansion,” Bell said. “We need to have a discussion about what we can do in our state to protect ourselves as this discussion goes forward, and that may still involve expansion.”

To date, the hospital association estimates the decision by Republican Gov. Sam Brownback and GOP legislative leaders to reject expansion has cost the state more than $1.5 billion in additional federal funds.

Expansion out, block grants in?

In the face of uncertainty, Bell said, the biggest mistake expansion advocates could make is to do nothing. So, he said, they will introduce an expansion bill for lawmakers to consider.

“I think we’d be missing an opportunity if we didn’t get a bill introduced,” he said. “There could be a window that you would miss out on if you didn’t have something in the hopper.”

Rep. Jim Ward, a Wichita Democrat, said after three years of Brownback and conservative leaders blocking debate on expansion, he wants a chance to vote.

“The people of Kansas deserve to know where their legislators are on this issue,” Ward said. “We should vote and let those who don’t want to vote for it make whatever excuses they’re going to make.”

Rep. Dan Hawkins, a Wichita Republican and expansion opponent who chairs the House Health and Human Services Committee, said he doesn’t expect Trump and GOP congressional leaders to preserve the part of the law that requires the federal government to pay no less than 90 percent of the costs of expansion.

It’s more likely, he said, that Congress will substitute U.S. House Speaker Paul Ryan’s plan to convert Medicaid to a block grant program. States would get a set amount of federal dollars and the freedom to design their own health care programs for low-income families and people with disabilities.

“With a block grant, I believe we could build something that could work,” Hawkins said. “But let’s do it quickly. Uncertainty is one of the worst things we could have right now.”

Such talk alarms interest groups that see block grants as little more than a way for the federal government to reduce spending on Medicaid. Currently, federal funds cover about 57 percent of KanCare’s annual $3 billion cost.

“If block grant means that states would have some flexibility to make sure that money is used in exactly the right places, that would be one thing,” Bell said. “But if it means ‘we just want to reduce the amount of money provided to states,’ that’s entirely different. And at this point, the fear is it would amount to a reduction in money.”

Ward said speculation about a switch to Medicaid block grants adds urgency to the expansion discussion because states that are drawing down more federal funds may be able to lock them in. “They (expansion states) are going to argue, ‘This is what you’ve been giving us for the past three years,’” Ward said. “I think block grants are a horrible idea, but if that’s going to happen we need to be bold now so that we can increase our stake and get a bigger piece of the pie.”

Jim McLean is executive editor of KHI News Service in Topeka, a partner in the Heartland Health Monitor team.