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Affordable Care Act Gets Mixed Reviews At Kansas Economic Conference

Jim McLean
KHI News Service



Which of the following is true?

  • The Affordable Care Act has provided thousands of low-income Kansas with greater access to affordable health insurance.
  • A looming ACA mandate has caused some Kansas employers to hire fewer full-time workers and instead fill positions with part-time employees.
  • The combination of reductions in Medicare rates and the state’s decision not to expand Medicaid eligibility has put Kansas hospitals in a financial bind.

The correct answer is “all of the above.”
Less than a year after the first plans were sold in the Obamacare marketplace, it’s clear that the law’s impact on consumers, providers and employers has been mixed. But it’s also clear that it’s too soon to fully gauge its impact.

“There is so much uncertainty going forward,” said economist Donna Ginther, wrapping up the 2014 Kansas Economic Policy Conference on Thursday at the University of Kansas.

Consumers are hopeful but confused. Employers are wary. Health insurers are shooting in the dark. And providers – particularly rural hospitals – are worried about surviving as they transform the way they deliver care.

“It’s really hard if you’re a provider out there … with one foot on the dock and one foot on the boat,” said Kansas Hospital Association President and CEO Tom Bell, referring to the difficulties that hospitals face transitioning from the old fee-for-service system to one that requires providers to manage the health of their patients.

Arthur Frable, CEO of the Bob Wilson Memorial Grant County Hospital in Ulysses, said creating a value-based system that rewards providers that meet certain quality measures and penalizes those that don’t can be a “very scary” proposition for rural providers serving higher proportions of elderly Kansans who require more acute care.

“My concern is that ultimately this is going to be the mechanism that’s going to be used to close many hospitals,” Frable said.

Insurers guessing on rates

The transition also continues to challenge Blue Cross Blue Shield of Kansas, the state’s largest health insurer, said Matt All, senior vice president and general counsel. The company had to set premiums for the plans it will offer during the upcoming Obamacare enrollment period before it knew whether it had properly priced plans sold during the first round.

“There is a lot of guesswork going on,” All said. “It’s reasonably educated guesswork. But it’s guesswork all the same.”

The next open enrollment period starts on Nov. 15 and runs through Feb. 15, 2015.

During the first enrollment period, Oct. 1, 2013, to March 31, 2014, more than 57,000 Kansans purchased coverage through the online marketplace at www.healthcare.gov . About 78 percent of them received federal tax credits, meaning their incomes ranged between 100 percent and 400 percent of the federal poverty level. More than half of the almost 45,000 Kansans who received subsidies paid $50 or less per month for their coverage, according to a new report from the Kansas Health Institute.  

The number of Kansans who purchased coverage in the marketplace and previously were uninsured is unknown, but it’s estimated that nationally about 30 percent of those who purchased Obamacare plans previously lacked coverage.

Arkansas Medicaid expansion touted

Many states have significantly reduced their uninsured rates by expanding Medicaid eligibility to 138 percent of the federal poverty level – about $16,104 in annual income for an individual and $32,913 for a family of four.  Arkansas engineered one of the biggest reductions.

“Arkansas had the seventh highest un-insurance rate in the country before this. We have now experienced the largest single percentage reduction in un-insurance in the country,” said Andy Allison, a former Kansas Medicaid official who spearheaded the expansion effort in Arkansas as director of that state’s program.

The Arkansas plan, which provides private coverage to 90 percent of new enrollees and leaves the 10 percent with the most serious health issues in traditional Medicaid, has served as a model for other “red” states where most elected officials are opposed to the ACA.  

The infusion of young and relatively healthy Medicaid recipients into Arkansas’ private insurance market is pushing down rates for everyone else, Allison said.

“We’ve just made private insurance in Arkansas for people above 138 percent (of the federal poverty level) cheaper,” Allison said, estimating that 2015 premiums will average 2 percent less than those charged in 2014.

Bell, of the Kansas Hospital Association, said the organization is drafting a Medicaid expansion proposal for the 2015 legislative session that likely will include some features of the Arkansas plan. He said he hopes that, after the election, the governor – whoever that turns out to be – and lawmakers will be ready to discuss expansion.

Failure to act, Bell said, will leave more than 80,000 low-income adults in a kind of insurance limbo. They make too much for Medicaid but too little to be eligible for subsidies in the Obamacare marketplace.

“To me that’s a head-scratcher,” Bell said. “It raises the question of why we as a state are not having an official conversation about what can we do to help the people out in that bubble.”

However, if Rep. David Crum’s comments are any indication, many conservative Republicans may continue to oppose expansion on the grounds that its cost is not sustainable until Congress reforms entitlement spending.

“The idea that programs funded by the federal government are free has contributed to our $18 trillion federal debt,” said Crum, an Augusta Republican who is not running for re-election. “Until Congress can fix our entitlement system and balance our budget, I worry about expanding the Medicaid program.”

Under the ACA, the federal government has agreed to pay all expansion costs for three years. After that the federal share will gradually decline until it reaches 90 percent, where it will remain.

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