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Budget Crisis Makes Kansas Medicaid Expansion Even Tougher Sell

Kansas’ worsening budget problems are making it harder to generate a legislative discussion about expanding Medicaid.

Rep. Tom Sloan, a moderate Republican from Lawrence, is attempting to piece together an expansion proposal that he hopes Gov. Sam Brownback and GOP conservatives might be willing to consider. He’s borrowing elements from plans crafted by conservative Republican governors in Indiana, Tennessee, Wyoming and other states that have received or are seeking federal approval for more private-sector approaches to expansion.

But adopting a more conservative approach won’t be enough, he said. With state revenues plummeting and lawmakers scrambling to close gaping holes in this and next year’s budgets, any bill also must propose to cover the state’s share of expansion costs for several years.

“If we’re going to put something on the table, there has to be a financing component,” said Sloan, who plans to start working on an expansion bill next week in his committee.

State revenues fell $47.2 million short of already lowered projections in January, increasing this budget year’s projected revenue shortfall to more than $325 million.

The federal government has promised to pay the full cost of a state’s Medicaid expansion through 2016 and at least 90 percent after that. A study commissioned by the Kansas Hospital Association estimated expansion would cost the state an additional $312 million through 2020.

The same study said that savings and tax revenues resulting from expansion would more than offset that cost.

“Our feeling is that this is a program that on its face funds itself,” said Tom Bell, chief executive of the hospital association.

But Sloan said even if the study is correct, the promised benefits will take time to materialize.

“Even if the advocates are right and the expansion of Medicaid, or KanCare, will result in economic growth that the state will partially capture, you still have to have the interim financing,” Sloan said. “You’ve got to match the federal dollars that will come.”

Initially, hospital association officials said they would be willing to increase an assessment on hospital revenues to pay for expansion. But in recent days Bell has said other options also should be on the table.

“We’re willing to talk about all kinds of funding sources, and that is one of them,” he said. “But that’s not the starting point. We first need to agree to have a serious discussion about expansion, and we haven’t done that yet.”

Bell said while it’s encouraging that Sloan’s committee is talking about expansion, neither Brownback nor the conservatives who control the Legislature have given any indication that they are willing to drop their opposition to it. 

Any proposal that emerges from Sloan’s committee would face barriers. For one thing, it is likely to face competition. The hospitals are writing their own bill. And Rep. Dan Hawkins, the Wichita Republican who chairs the House Health and Human Services Committee, is working on what could be a third, more conservative alternative.

Kansas’ privatized Medicaid program, known as KanCare, provides insurance to nearly 370,000 needy and disabled Kansans, but it doesn’t cover able-bodied adults without children no matter how poor they are.

It’s estimated that Medicaid expansion would extend coverage to between 140,000 and 170,000 more Kansans who earn up to 138 percent of the federal poverty level: annually $16,105 for an individual and $32,913 for a family of four. 

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

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