Medicaid health insurance to expand under Obamacare in Kentucky

Beshear touts benefits while others question decision’s costs

Written by
Jessie Halladay
The Courier-Journal
Kentucky Gov. Steve Beshear will expand Medicaid: The Medicaid program will be expanded undervthe federal Affordable Care Act

FRANKFORT, KY. — More than 300,000 uninsured Kentuckians will become eligible for Medicaid after Gov. Steve Beshear announced Thursday that the state will expand the health insurance program — taking advantage of President Barack Obama’s controversial Affordable Care Act.

“This is both the single biggest decision affecting the collective health of Kentuckians in our lifetime, and it was also one of the easiest to make,” Beshear said during a news conference at the Capitol.

He cited a study by the Cabinet for Health and Family Services that said expanding Medicaid would benefit hundreds of thousands of Kentucky families, improve the state’s failing health, create nearly 17,000 jobs, and have a $15.6 billion positive economic impact on the state between fiscal 2014 and 2021.

The study also said Kentucky would see an $802.4 million positive impact on the state budget for that period because some expenses would be moved to the federal government. Without expansion, the study says Kentucky would see $38.9 million in additional costs because of changes under the Affordable Care Act, also known as “Obamacare.”

Beshear said the Medicaid expansion, when paired with the Health Benefit Exchange the state is setting up under the health act, will provide an opportunity for every Kentuckian to have access to affordable health insurance.

Under the expansion, parents and low-income adults younger than 65 with incomes up to 138 percent of the federal poverty line — $15,856 for an individual or $32,499 for a family of four — will become eligible for Medicaid.

Medicaid enrollment for those newly eligible would start in October, with coverage beginning Jan. 1.

Bill Wagner, executive director of Family Health Centers in Louisville, said that will “significantly change” people’s lives, including 20,000 patients who visit his clinics.

“The impact of expanded access is simply to … improve the health of Kentuckians and to remove what I think is a significant burden of worry about, ‘How I will pay for my family’s health care in the future?’ ” Wagner said.

Terry Brooks, executive director of Kentucky Youth Advocates, which has lobbied for expansion, said it is a “smart investment for Kentucky” because of the health and economic benefits for children and their parents.

“As health outcomes improve due to more people being insured and receiving needed health services, health care costs are likely to decrease and money will be saved,” Brooks said.

But House Republican Leader Jeff Hoover of Jamestown questioned whether Kentucky can afford the change, saying the “expansion has the potential to have a significant impact on other functions of state government” when the state is “inadequately funding our schools at all levels.”

Under the plan, the federal government will pay 100 percent of the costs of expansion for the first three years, and the state will start paying a portion of the costs in 2017, capped at 10 percent in 2020.

Under the current system, Kentucky pays 30 cents of every dollar spent on Medicaid, while the federal government pays the rest. The state now spends about $1.5 billion annually on Medicaid.

Beshear said the newly covered people should expect benefits equal to those received by current Medicaid recipients.

Audrey Tayse Haynes, secretary of the Cabinet for Health and Family Services, said people being added to the Medicaid system will be covered through managed care companies already operating in Kentucky.

Tracey Hayes, 29, a single mother who works full time at a child-care center that does not provide insurance, said she would be the first in line to enroll under the expansion.

While her two girls have health care through the state’s KCHIP program, she pays out of pocket when she has an ailment serious enough for her to seek medical care. “My bills, they pile up because I can only pay a little at a time,” she said. “It’s very stressful.”

The 2010 Affordable Care Act established parameters that required states to expand Medicaid or lose funding, but a June 2012 Supreme Court decision said the federal government couldn’t use existing Medicaid funds as leverage, which made the expansion optional. Kentucky is among 22 states and the District of Columbia that have said they will expand coverage.

Beshear did not need legislative approval to go forward because Kentucky’s rules for Medicaid eligibility are set in regulation, not in statute, and can be revised by the governor. Legislative committees then review the new or amended regulations and may accept or reject them.

But the governor can implement the regulations regardless of any objections.

Political responses

State Sen. Julie Denton — a Louisville Republican who heads the Senate Health and Welfare Committee and proposed a failed bill to prohibit Beshear from expanding Medicaid without legislative approval — said she is concerned that the long-term costs of expansion will outweigh the benefits, particularly if the federal government changes the terms of the deal and requires a bigger contribution from states.

“There’s no certainty” that the contribution will stay the same given the economy, Denton warned. “This isn’t a small measure. … This is too big of an issue for one person’s discretion.”

U.S. Senate Minority Leader Mitch McConnell of Kentucky issued a statement expressing “surprise” with Beshear’s decision, “given Kentucky’s struggles to finance its current Medicaid program.” The action, McConnell said, could exacerbate “the already serious access-to-care problems we face in Kentucky.”

Tom Underwood, Kentucky state director for the National Federation of Independent Business, said his group is concerned about the cost to the state. “Show us the money, is what we’re asking.”

But U.S. Rep. John Yarmuth, a 3rd District Democrat who supported the Affordable Care Act, called Beshear’s decision “historic.”

“There are thousands of Kentuckians whose lives have already been improved — and some saved — because of the Affordable Care Act,” he said.

House Speaker Greg Stumbo, D-Prestonsburg, said he “would challenge any public official opposing this move to surrender his or her own health care coverage.”

“I think it is hypocritical of those with excellent, taxpayer-supported benefits to criticize others who will now have accessible and affordable health care,” he said.

And Dr. LaQuandra Nesbitt, director of the Louisville Metro Department of Public Health and Wellness, said the expansion “is a great step toward achieving equity in access to health care and that, over time, should help to make our citizens healthier and to lower health costs by getting people to the right place, at the right time, for the right care.”

Statistics released by Beshear’s office show that 101,366 Jefferson County residents lack insurance. Under the Medicaid expansion, 47,451 of those will now qualify for the program.

An additional 44,294 will have access to subsidized insurance through the Health Benefits Exchange.

Most providers and advocates also supported Beshear’s decision.

Thomas Johnson, spokesman for Norton Healthcare, said in a statement: “Given the commonwealth’s poor health status — the nation’s highest mortality rate and rankings among the highest in cancer, cardiovascular disease and obesity — expanded coverage will help eliminate barriers to care.”

Sheila Schuster, an advocate with the Kentucky Mental Health Coalition, said expansion is “absolutely the right thing to do.”

But she said many still want to see concerns and problems with the implementation of Medicaid managed care worked out. In the past year, there have been complaints by some providers about delayed payments and from consumers about changing benefits.

Schuster said she hopes the system can be operational by the Oct. 1 enrollment deadline, as Beshear pledged. “It’s a lot of people to get in the system in a short amount of time.”

Reporter Jessie Halladay can be reached at (502) 582-4081 or on Twitter at CJ_JHalladay. Reporters Laura Ungar and Tom Loftus contributed to this report.

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