Medicaid expansion in Kansas: What to know before lawmakers convene in January
Kansas is one of 11 states that have not expanded Medicaid eligibility. Will 2023 be the year it passes?
Medicaid expansion is a popular policy among voters, in Kansas and across the country. More than 7 in 10 Kansas voters support expanding Medicaid eligibility, according to a survey from Fort Hays State University.
But that popularity hasn’t been enough to motivate lawmakers to pass Medicaid expansion, despite a decade of trying. Lawmakers introduced dozens of bills over the past 10 years with no success.
No matter the political pressure or bipartisan negotiating from Gov. Laura Kelly to see it passed, Kansas remains among a dwindling few states that have not adopted Medicaid expansion, leaving around 150,000 Kansans without health care, most of them too poor to afford it on their own. Only 11 states nationwide have yet to adopt it; a 12th approved it only in November.
This year, however, the debate takes on a new urgency: A federal public health emergency enacted in 2020 during the COVID-19 pandemic temporarily prevents states from kicking people off Medicaid. That protection may expire in 2023. When that happens, as many as 125,000 Kansans risk losing their Medicaid eligibility.
As lawmakers prepare for another legislative session to begin in January, Kelly has promised to push for Medicaid expansion yet again.
What is Medicaid and why expand it?
Medicaid expansion would allow more people to be eligible for Medicaid benefits. Medicaid is the federal government program through which people who meet certain criteria, including income requirements, can get publicly funded health insurance. In Kansas, Medicaid is administered through KanCare and limited to low-income adults who are seniors, are disabled or have children. Childless adults without disabilities who are under the age of 65 are not eligible for KanCare benefits.
Medicaid expansion would eliminate all KanCare eligibility criteria except income. Under expanded eligibility, anyone with a household income under 138% of the federal poverty level may qualify for Medicaid benefits, including adults without disabilities or dependents. For a family of three, that would be roughly $32,000.
Medicaid expansion was mandatory when it was first enacted as a part of the 2010 Affordable Care Act, also known as Obamacare. States that refused to expand Medicaid eligibility risked all of their federal Medicaid funding being cut, even funding already received.
In 2012, however, the U.S. Supreme Court decided that the government could not withhold funding for a state’s entire Medicaid program if that state decided against expanding Medicaid; only funding for the expanded part of Medicaid could be withheld. This effectively made Medicaid expansion optional. Of the 39 states plus the District of Columbia that have expanded Medicaid eligibility, half of them enacted it Jan. 1, 2014, the first day possible.
What would Medicaid expansion cost Kansas taxpayers?
If Medicaid expansion ever passes in Kansas, the federal government would pay for 90% of the costs, with Kansas on the hook for the remaining 10%. The federal government currently pays more than 90%, because of incentives enacted in response to the COVID-19 pandemic to encourage states to sign up.
Federal funding of already existing Medicaid coverage would remain the same as it is now, around 60%, according to the Kaiser Family Foundation.
Opponents of Medicaid expansion — many of them fiscal conservatives — have cited the cost to taxpayers as a reason to oppose it.
Fiscal estimates earlier in 2022 predict the state would spend around $600 million to pay for Medicaid expansion in its first year in Kansas. But most of that would be offset by federal funding. In the end, the state’s budget director estimates that Kansas would save nearly $70 million by enacting Medicaid expansion.
But a $70 million savings from Medicaid expansion hasn’t been enough to convince lawmakers to pass it.
Why hasn’t Kansas passed Medicaid expansion yet?
Kansas’ failure to adopt Medicaid expansion is not for a lack of trying. It has been a policy priority of lawmakers, health care administrators and advocates for nearly a decade, with dozens of bills introduced in the legislature in that time.
Some of those attempts were almost successful.
In 2020 — the most recent year Medicaid expansion was seriously attempted by the legislature — an early attempt at a bipartisan deal fell apart after Senate Republicans refused to advance the bill unless a proposed amendment that would strip abortion rights from the state constitution passed both chambers. That amendment didn’t get the needed votes until the following year; voters rejected the amendment, called “Value Them Both” by its supporters, in August 2022.
Critics of Medicaid expansion say that in addition to the cost to taxpayers, the added strain of more patients on the existing system and the absence of work requirements are also reasons to oppose it. Critics also question the federal government’s ability to manage the added administrative burden of an expanded program.
But the Kansas Legislature has still opposed Medicaid expansion despite attempts from supporters to address these concerns.
The bipartisan deal that failed and other proposals sought to cover the state’s obligation for the remaining costs for Medicaid expansion. The failed 2020 agreement included a provision supported by Kansas hospitals that would have funded Kansas’ cost share through a hospital surcharge. Kelly proposed in 2021 that the additional costs could be funded through taxes on the sale of medical marijuana, which would have to first be legalized in Kansas. Kelly’s pot proposal was never included in a bill.
Critics who would only support Medicaid expansion with work requirements are unlikely to get what they want as well. Work requirements must be approved by the Centers for Medicare and Medicaid Services, the federal agency in charge of Medicaid, through a waiver. Since the pandemic started, the agency has revoked work requirement waivers it previously granted. Kelly has supported legislation that includes a provision that would refer Medicaid recipients to job resources, but has stopped short of requiring recipients to find jobs.
How would Medicaid expansion impact Kansans and hospitals?
An estimated 150,000 more Kansans would be eligible for Medicaid if eligibility is expanded, the state’s budget director predicted as recently as May. That would include those not eligible under current KanCare rules that exclude single, child-free adults under age 65.
Medicaid expansion could also help save rural hospital systems, proponents have said, at a time when half of rural hospitals in Kansas are at risk of closing. Rural hospitals typically treat a larger share of low-income and elderly patients who rely on government-subsidized health insurance, so adding more patients to Medicaid rolls would allow those hospitals to recoup the costs of treating uninsured patients, proponents have said.
When uninsured people have health insurance, proponents have said, they are more likely to seek medical care earlier, when medical intervention is less expensive, saving rural hospitals the cost of providing more expensive delayed care.
Tom Bell, former chief executive of the Kansas Hospital Association, testified in 2020 that 85% of rural Kansas hospitals were operating at a loss. Since then, operating under the strain of the pandemic, about one-third of rural hospitals nationwide are now at risk of closing in the next year, including 55 in Kansas.
Nearly 75% of rural hospital closures nationwide since 2010 were in states that have not yet enacted Medicaid expansion, or waited too long for it to make a difference, according to a report from the American Hospital Association.
By keeping hospitals open, Medicaid expansion could create jobs at those hospitals, said Don King, chief executive of Ascension via Christi, in testimony to lawmakers in 2020. Kelly’s office forecast as many as 23,000 jobs could be created.
Can Kansans expand Medicaid eligibility without the legislature?
Voters in seven states approved Medicaid expansion by ballot measure, often over the objections or inaction of local politicians. Three of those states border Kansas: Nebraska, Oklahoma and Missouri. The others are Idaho, Maine, Utah and South Dakota, where Medicaid expansion is scheduled to go into effect in July 2023 after voters approved it in November.
Eight of the 11 states that have not adopted Medicaid expansion — including Kansas — don’t have the option to bypass their state legislature, because they have no statewide process by which voters may initiate a ballot measure. In two other states, voters may only initiate constitutional amendments.
In Missouri, voter-approved Medicaid expansion took effect only when the state Supreme Court intervened after lawmakers tried to derail it. After years of it going nowhere in the legislature, advocates put Medicaid expansion on the ballot in 2020. Voters approved it, but were powerless to fund it — lawmakers refused to fund it in the state’s budget the following year, and the governor withdrew from the federal program.
Three Missourians who were newly eligible to enroll in expanded Medicaid sued the state when they couldn’t access the promised benefits. The state Supreme Court agreed with them, and mandated that the state fund Medicaid expansion nearly a year after voters first approved it.
Oklahoma voters passed Medicaid expansion around the same time as Missouri; lawmakers there allowed it to take effect without resistance.