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Kansas Paves Medicaid Expansion Path After Governor And Top Republican Break Partisan Logjam

Protesters last year targeted Senate Majority Leader Jim Denning for blocking Medicaid expansion. Now he and Gov. Laura Kelly have settled on a compromise.
Jim McLean
Kansas News Service
Protesters last year targeted Senate Majority Leader Jim Denning for blocking Medicaid expansion. Now he and Gov. Laura Kelly have settled on a compromise.

TOPEKA, Kansas — Democratic Gov. Laura Kelly and a key Republican lawmaker said Thursday they’ve crafted a deal to make roughly 130,000 more Kansans eligible for Medicaid.

In a joint Statehouse news conference, Kelly and Senate Majority Leader Jim Denning revealed their compromise to expand the government-run health plan for the poor and disabled.

“Compromise is hard,” Kelly said with lawmakers from both parties looking on. “It’s messy and it’s slow. But it’s so worth it.”

The deal, Denning said, is the product of several weeks of intense negotiations.

“This,” he said, “is what governing looks like.”

Last year, the Kansas House passed an expansion plan and then saw Senate leaders, Denning chief among them, block it in the session’s final days.

The plan announced Thursday appears to reflect a middle ground that could clear the Legislature and win Kelly’s signature.

Senate Minority Leader Anthony Hensley said the compromise has bipartisan support.

“We have 22 co-sponsers, 11 Democrats and 11 Republicans,” the Democratic senator said.

It takes 21 votes in the 40-member Senate to pass a bill.

If signed into law, the compromise would make Kansas the 38th state to expand Medicaid (counting the District of Columbia). It would also end a partisan standoff that began nearly a decade ago with the passage of the federal Affordable Care Act. That law — better known as Obamacare — requires the federal government to shoulder 90 percent of the cost of expansion.

Carl Frazier, the pastor of Topeka’s New Hope and Community Chruch and a longtime advocate for expansion, was among the more than 100 people who attended the news conference.

“I’m all excited,” Frazier said. “It just proves in Kansas that we’re better together.”

Carrie Saia, the head of the Holton Community Hospital, said the additional federal dollars that Kansas would get because of expansion are critical to the survival of rural hospitals.

“In the last couple of years, we have not had a profitable bottom line,” Saia said. “This will help.”

The plan’s key elements:

  • Expanding Medicaid to cover people who earn up to 38% percent above the federal poverty level. For a family of four, that’s about $35,500 a year.
  • The federal government will cover 90% percent of the cost. The rest — estimated at $35 million — falls to the state.
  • A “re-insurance” plan — a provision requiring a special waiver from federal regulators — aimed at lowering the cost of private health insurance in the Obamacare exchange. It does that by helping insurance companies cover people who rack up the highest medical bills.
  • Hospitals in the state could be charged up to $35 million starting in the summer of 2021 to help pay the state’s cost of expansion. The Kansas Hospital Association has endorsed the surcharge.
  • A work referral program, but no new work requirements. In addition, enrollees will pay up to $25 a month for coverage. For those who can’t afford those premiums, the state will tap a special fund.
  • An initiative aimed at helping Kansas hospitals get federal OKs to experiment with more efficient ways of delivering health care in rural areas. Most of the state’s rural hospitals currently operate at a loss.

The path to compromise

The breakthrough on expansion comes after years of contentious debate that peaked in the 2019 legislative session. Denning and other Republican leaders blocked a Senate vote on a plan that Kelly had made her top priority.

Expansion advocates demanded a vote, staging noisy protests that briefly shut down the Senate. They accused Denning and Senate President Susan Wagle, a conservative running for the U.S. Senate, of putting the lives of poor Kansans at risk.

That didn’t move Denning.

“That’s an emotional issue and I don’t run on emotion,” he said at the time. “All my decisions are based on good policy.”

Gov. Laura Kelly and Senate Majority Leader Jim Denning announcing a Medicaid expansion compromise on Thursday.
Credit Stephen Koranda / Kansas News Service
Kansas News Service
Gov. Laura Kelly and Senate Majority Leader Jim Denning announcing a Medicaid expansion compromise on Thursday.

Continuing to block Medicaid expansion might have put Denning at risk in his Johnson County district, where Democrats are gaining strength. He unveiled his own plan in October.

It proposed expanding Medicaid for only the poorest Kansans while subsidizing private insurance for those making more than 100% of the federal poverty level ($25,100 a year for a family of four).

Denning’s two-tiered plan also proposed the creation of a re-insurance fund to lower the cost of private coverage in the Obamacare marketplace. Helping insurance companies cover their highest-cost patients, Denning said, could lower premiums by more than 20%.

“We want to get as many Kansans covered with health insurance as we can in the Medicaid market and the non-Medicaid market,” Denning said when he unveiled the plan in October.

Expansion advocates welcomed Denning’s attempt at compromise but said his plan was too complicated. With so many “moving parts,” they feared federal officials would either reject it or take years to approve it.

“When it comes to Medicaid expansion, simpler is better,” said Sheldon Weisgrau, an analyst for the pro-expansion group Alliance for a Healthy Kansas.

In her negotiations with Denning, Kelly wanted a more straightforward plan that federal regulators could green light by the end of the year. That’s what she got.

“Kansas will not repeat the mistakes made in other states where expansion plans were loaded up with bureaucratic red tape and expensive administrative barriers,” she said Thursday.

Senate Vice President Jeff Longbine, a Republican from Emporia, predicted lawmakers would act quickly.

“I’m quite confident that we’ll be able to pass it fairly early in the session,” Longbine said.

Some not celebrating

Wagle, the Senate president, maintained her opposition on Thursday.

“Expanding a broken system that doesn’t allow physician choice, limits pharmaceuticals and therapies, places Kansans in waiting lines and delays payments to providers,” she said in a statement. She said it failed to do anything to keep down health care costs.

Sen. Richard Hilderbrand, a Republican from Galena, said before Thursday’s press conference he won’t vote the expansion compromise. He said it isn’t the state’s responsibility to provide health coverge to “able-bodied adults” capable of fending for themselves.

To get any support from conservatives, Hilderbrand said, the plan must include a work requirement.

“I can tell you, most people don’t want Medicaid expansion,” he said. “Those that do, the vast majority say they want work requirements.”

At Kelly’s insistence, the plan includes a work referral program but doesn’t require Medicaid recipients to either have a job or be actively looking for one.

The referral program, which includes training, Kelly said, is a more effective way to get people working.

“The only thing that empowers Kansans more than good health,” she said, “is a good job.”

Hilderbrand said he and other conservatives are disappointed by Denning’s “retreat” on expansion. Still, he agrees that the compromise plan will likely pass.

“If you have leadership that wants it,” he said, “there’s no way to stop it.”

Jim McLean is the senior correspondent for the Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy. You can reach him on Twitter @jmcleanks or email jim (at) kcur (dot) org.

Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.

Copyright 2020 KCUR 89.3

Jim McLean is an editor and reporter for KCUR 89.3. He is the managing director of KCUR's Kansas News Service, a collaboration between KCUR and other public media stations across Kansas.