Kentucky and Indiana Medicaid Expansion Impactful (Re-post)

Courier-Journal
With no health insurance and a family  income of about $15,000 a year, William Helton of Shively often delays going to the  doctor because of the expense.But he and roughly 16 million other low-income Americans — including more than 600,000 Kentuckians and Hoosiers — may soon get coverage through Medicaid if governors choose to expand the program in 2014 under the federal health reform law.That’s a big “if.”The Supreme Court’s June 28 decision to uphold the Affordable Care Act forbade the federal government from withholding current Medicaid funds from states that refuse to expand the state and federal health insurance program for the poor and disabled.Neither Kentucky Gov. Steve Beshear, a Democrat, nor Indiana Gov. Mitch Daniels, a Republican, have said whether they plan to expand Medicaid — meaning very different health-care landscapes could emerge in the next few years.

The debate comes down to coverage vs. cost.

Proponents of expansion say it would cover millions of vulnerable Americans, saving money in the long run by avoiding more expensive emergency room care and heading off long-term health problems.

According to a report by the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute, more than 620,000 Kentuckians and Hoosiers would be newly enrolled in Medicaid in 2019 under the expansion, including more than 460,000 who were previously uninsured.

“It’s pretty obvious this is going to result in significant savings across the system. People getting uncompensated care will have their health care paid for,” said U.S. Rep. John Yarmuth, D-Ky. 3rd District. “Then there’s the moral side of this. We have an opportunity to prevent a lot of sickness, suffering and needless deaths.”

Yarmuth and others also point to an unintended consequence of the court decision — that some of the poorest people wouldn’t be eligible to shop for insurance in new marketplaces called exchanges, meaning they would remain uninsured if their states don’t expand Medicaid.But opponents say states can’t afford to expand Medicaid, especially since they must also juggle other financial responsibilities such as education funding. Although the federal government will pay for all of the Medicaid expansion costs at first, that would decline to 90 percent by 2020.Daniels, who is stepping down as Indiana’s governor to lead Purdue University, said expanding Medicaid would add about half amillion Hoosiers to Medicaid — at a cost of about $2 billion between 2012 and 2020. Last week, he asked for input from gubernatorial candidates, saying “the costs and consequences of our decision … willbe borne by the next administration.”Kentucky’s Beshear said he’s still evaluating the potential cost to the state.U.S. Sen. Mitch McConnell, R-Ky. and Senate minority leader, said repealing the entire health-care law will be “the Senate’s first item on the agenda.”

“In the meantime, given Kentucky’s struggles to finance its current Medicaid program and the uncertainty of futurefederal funding, I hope Kentucky’s lawmakers would not expose the commonwealth’s taxpayers to more open-ended expenses they cannot afford,” he said in a statement. “Additionally, a dramatic expansion of Medicaid enrollment would obviously exacerbate the already serious access-to-care problems we face in Kentucky.”

More than 50 of Kentucky’s 120 counties — and almost 100 pockets within counties — are deemed by the federal government to be short on health professionals.

Who gets covered
The stakes are high for people such as Helton, who in better times worked construction but lately does day jobs for a friend’s moving company.A married father of five grown children, he has mild high blood pressure, takes medication for anxiety, and recently was hospitalized for unexplained vomiting. He pays about $15 a visit to get care at the Family Health Centers-Portland clinic — but sometimes finds even that small fee a burden.With Medicaid, “I probably wouldn’t hesitate to go to the doctor anymore. There’s a lot of times I have aches and pains and don’t go,” said Helton, 53.When people forgo care, health experts say, small health problems can become big, costly ones.Expanding Medicaid “is going to help,” Helton said. “People might start taking better care of themselves.” Currently, qualifying for Medicaid varies by state.

In Kentucky, for example, working parents are eligible if their earnings equal 62
percent or less of the federal poverty level — no more than about $9,000 for a family
of two. Childless adults younger than 65 who aren’t disabled are ineligible in most
states.

According to the Kaiser Family Foundation, about 885,000 Kentuckians and 1.15 million Hoosiers are enrolled in Medicaid.

Under the expansion, Medicaid would effectively cover people who earn up to 138 percent of the federal poverty level — currently $15,415 for one person and $31,809 for a family of four.

The Congressional Budget Office has estimated that Medicaid would have 16 million new enrollees under health reform, many of them childless adults. Health-care experts also say people who are currently eligible may choose to sign up after renewed attention to the Medicaid program.States that now have high percentages of uninsured people and more limited Medicaid coverage will see a greater impact from reform, said Robin Rudowitz, associate director for the Kaiser commission.The Kaiser report says Kentucky would see a 57 percent reduction in the number of uninsured, low-income adults under a Medicaid expansion, the largest drop in the nation. Indiana would see a 44 percent reduction.According to the U.S. Census Bureau, 15.5 percent of Kentuckians, or 663,000 residents, lacked health insurance from 2008 to 2010; and 12.8 percent of Hoosiers, or 813,000 people, were uninsured during that period.

Officials in the Kentucky Cabinet for Health and Family Services would not discuss the issues they are weighing as they work with Beshear on the question of expanding Medicaid.

“We are in contact with the appropriate federal agencies, and we are awaiting guidance on how the opinion on the ACA affects Medicaid expansion choices for states,” Beshear said in a statement. “We’re going to take enough time to answer all our questions before we make a determination on expanding the program in Kentucky.”

Yarmuth urged Beshear to expand Medicaid, saying he expects Kentucky will eventually make “the right choice.”

Yarmuth said failing to expand Medicaid would mean turning down $12 billion from the federal government over the first five years. Kentucky’s added cost during 2014-2019 would be $515 million, the Kaiser study said.

Over that same period, the study said, the federal government would spend $9 billion in Indiana; the state, $478 million.

Rudowitz pointed to a July study in the New England Journal of Medicine that compared three states that expanded Medicaid eligibility for adults — New York, Maine and Arizona — with neighboring states that did not.

Researchers found that expanding Medicaid reduced the adult death rate by 6.1 percent in those states, compared with neighboring states.Bill Wagner, executive director of Family Health Centers, which has seven sites in Louisville and serves about 43,000 patients annually, said his clinics would most likely see an influx of people if Medicaid expands. The health law has also provided grants to help his organization expand and serve more people.“We hope (Beshear) makes the right decision. It’s really important for our patients,” he said. “I don’t see how he cannot opt in.”
‘How do you pay for it?’
But the law’s opponents say they see a big reason to opt out.Tom Underwood, state director for the Kentucky chapter of the National Federation of Independent Businesses,
echoed many others. “Our major concern is cost,” he said. “How’s it going to be paid for year after year? We’re all for health care, but how do you pay for it?”Underwood said he’s concerned that Medicaid costs might eventually require new or higher taxes, and he worries how that might affect small businesses.Noting that states are struggling now to meet their obligations, he said: “If they don’t have any money now, how are they going to have money for this?”A July report from the Congressional Budget Office said the high federal share of expansion costs is an incentive to expand the program, but a “significant disincentive … is that states would ultimately have to bear some costs for an expansion …during a period when their budgets are already under pressure, in part from the rising costs of the existing Medicaid program.”

In 2010, the federal share of Medicaid payments in Kentucky was nearly 80 percent; in Indiana, it was 76 percent.

Experts say federal-state breakdowns for current Medicaid recipients would remain the same under health reform. But all of the money, state or federal, comes from taxpayers.

The congressional budget office and the staff of the Joint Committee on Taxation estimate that the insurance coverage provisions of the health-care law, including the Medicaid expansion, will have a net cost of $1.168 trillion from 2012 through 2022.

That’s a reduction from the $1.252 trillion projected before the Supreme Court decision, which authors say is more the result of spending reductions from lower Medicaid enrollment than offsetting cost increases from greater participation in insurance exchanges.

Rudowitz said if states don’t expand Medicaid, some areas would still see changes.

For example, she said a Medicaid program that provides financial assistance to hospitals serving a large number of low-income patients, called the Disproportionate-Share Hospital program, or DSH, is scheduled to reduce payments
under health reform in the anticipation that more Americans gain coverage.

Regardless of whether the state expands Medicaid, facilities such as University Hospital in Louisville would still see those payments drop.

Also, uninsured people earning 138 percent of the federal poverty level or less, who currently aren’t eligible for Medicaid, are likely to remain uninsured if a state doesn’t expand Medicaid.

That’s because they also aren’t eligible to get insurance through exchanges, since the health law’s authors assumed they’d be covered through expanded Medicaid. Yarmuth said Congress “is going to have to address this.”

Wagner agreed, saying: “It makes no sense for the poorest of the poor not to benefit in any way from the law.”

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By the numbers

250,704 — Estimated number of previously uninsured Kentuckians newly enrolled in Medicaid, as of 2019, if the state expands Medicaid
215,803 — Estimated number of previously uninsured Hoosiers newly enrolled in Medicaid, as of 2019, if the state expands Medicaid
57.1 percent — Percentage reduction in uninsured adults in Kentucky with incomes less than 133 percent of the federal poverty level, if the state expands Medicaid
44.2 percent — Percentage reduction in uninsured adults in Indiana with incomes less than 133 percent of the federal poverty level, if the state expands Medicaid
$2 billion — Estimated cost, between 2012 and 2020, of a Medicaid expansion in Indiana
$1.168 trillion — Estimated net cost of the insurance provisions of the health reform law over the 2012-2022 period

Sources: The Kaiser Commission on Medicaid and the Uninsured; Urban Institute; Congressional Budget Office; Joint Committee on Taxation; Indiana Gov. Mitch Daniels’ office; Milliman