How the health reform law will affect senior care


POSTED:   08/17/2013 12:19:05 AM PDT

The Affordable Care Act won’t hurt health care for the baby boomer population, and it will strengthen Medicare, the national insurance program for people age 65 and older.Every day across the nation, 10,000 people are turning 65, said Myron Machula, vice president and CFO of Enloe Medical Center. The total number of people age 65 or older in Butte, Glenn and Tehama counties is 55,000.

“That’s a fair amount of the population,” Machula said. “They count on this Medicare program for the health care that they receive.”

“There has been a misconception that the Affordable Care Act is going to take away benefits from people with Medicare, and it isn’t going to,” said Tatiana Fassieux, program manager at Passages.

Instead of cutting basic Medicare benefits, it improves them, she said.

According to the National Council on Aging, prescription drug costs will lessen because the coverage gap — better known as the “donut hole” — for those with Part D plans will be slowly phased out by 2020.

“Ideally, what’s going to happen is on a general basis nationally people won’t have to spend more than 25 percent for their prescriptions, so that was one aspect of the Affordable Care Act,” Fassieux said.

Medicare beneficiaries will also benefit from more preventative care, such as cancer and diabetes screening, according to the National Council on Aging. A free annual wellness visit allows the beneficiary and doctor to develop a prevention plan to keep the patient healthy. Patients can also get free vaccines.

“Preventative care is what saves money,” Fassieux said.

The law also helps ensure Medicare patients return home successfully from hospital stays, according to the National Council on Aging.

Eighty percent of older American have a least one chronic medical condition such as high blood pressure, heart disease or diabetes.

About 65 percent of Enloe Medical Center’s in-patient care is Medicare beneficiaries, Machula said. About 40 percent of outpatients are on Medicare.

The law also makes it easier to receive and pay for long-term care at home, according to the National Council on Aging. Medicare doesn’t currently cover long-term care, but starting in 2014 the law will increase protection for spouses of individuals who receive Medicaid home care services.

Another benefit is the law allows the Department of Justice to go after individuals or hospitals that have committed Medicare fraud, Fassieux said.

Medicare began paying bonuses of 10 percent to primary care doctors to improve access, according to the National Council on Aging.

The difficulty of getting into a primary physician’s office has already been an issue, but the rising number of people who will soon have insurance through the Affordable Care Act may make it more problematic.

“Why is that occurring?” Machula said. “Well, because again the volume of physicians is shy of what the need is, so the idea is to take the mid-level practitioners to help with what will be this increase for those who need care because they have the card.”

A question still unanswered is what an individual is to do if he or she bought an exchange insurance plan and then becomes eligible for Medicare. Fassieux said it’s unknown if someone can have both Medicare and the exchange plan.

Although there are still many unanswered questions regarding the Affordable Care Act, it appears that it will benefit older Americans.

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Health Insurance Changes Coming Your Way Under the Affordable Care Act

The YouToons Get Ready for Obamacare: Health Insurance Changes Coming Your Way Under the Affordable Care Act

2014 is coming–are you ready for Obamacare? Join the YouToons as they walk through the basic changes in the way Americans will get health coverage and what it will cost starting in 2014, when major parts of the Affordable Care Act, also known as “Obamacare,” go into effect.

This cartoon was written and produced by the Kaiser Family Foundation. Charlie Gibson, former anchor of ABC’s World News with Charlie Gibson and a member of the Foundation’s Board of Trustees, narrated the video. Creative production and animation was provided by Free Range Studios. | #HCR #affordablecareact #uninsured #medicaid #exchange #ACA #healthcarereform

Data mandated for dual eligibles outlined as states move to managed care

McKnight’s Long-Term Care News & AssistedLiving    


June 10, 2013


[Data mandated for dual eligibles outlined as states move to managed care.]

Dual eligible managed care plans involved in an upcoming Centers for Medicare & Medicaid Services demonstration project will need to submit data in a variety of areas, the agency explained in a draft statement last week.

The plans will have requirements pertaining to assessment, care coordination, organizational structure and other areas. One report called for in the “Utilization” section, for example, is on the total number of discharges from a nursing facility, including death, during a report period.

California, Illinois, Ohio, Virginia and Massachusetts will participate in capitated dual eligible models starting in 2014. They will be part of the Medicare-Medicaid Capitated Financial Alignment Demonstration project.

CMS has requested comments by Friday on the demonstration requirements.

In other dual-eligible news, a report from the Congressional Budget Office finds half of those who were full duals in 2009 became eligible for Medicare on the basis of disability or end-stage renal disease — not age. The “Dual-Eligible Beneficiaries of Medicare and Medicaid: Characteristics, Health Care Spending, and Evolving Policies” also found states with higher rates of enrollment in beneficiaries Medicare Advantage plans and Medicaid managed care plans were more likely to apply for the “capitated” model of the Financial Alignment Demonstration Project.

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CMS Easing Rules on Medicaid Changes

By David Pittman, Washington Correspondent, MedPage Today

Published: May 16, 2013

WASHINGTON — The Obama administration is trying to allow states greater flexibility to change their Medicaid programs without asking the federal government for special waivers, a top health official said here Thursday.

For example, the Centers for Medicare and Medicaid Services (CMS) has tried to ease regulations in recent months — beginning last August — to allow states to create integrated delivery models for Medicaid without such waivers, Cindy Mann, JD, said at a meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC).

More recently, CMS allowed states to increase patient cost-sharing for using nonpreferred drugs or making unnecessary emergency department visits, said Mann, who is director of Medicaid and the Children’s Health Insurance Program (CHIP) at CMS.

“Of course, much of this is at the instigation and creativity of states and the changes in the marketplace, saying ‘Wait a minute. We should be doing things a little bit differently,’ ” Mann said. “The program is one that is a living, breathing program. It’s always changing. Congress is making changes. We’re making changes.”

Waivers may still be needed, however, to sidestep statutory requirements of the federal law dictating Medicaid and CHIP, Mann said.

CMS has 65 section 1115 waivers currently in place. The waivers, which have the approval of the Secretary of Health and Human Services, allow states to embark on demonstration projects to redesign and improve their Medicaid programs.

The agency also has 320 section 1915c waivers in place, which give states flexibility in offering long-term-care services.

But too often states are unaware of the changes they can make to their Medicaid programs without going through CMS’ waiver process. “There’s little appreciation sometimes of the flexibility of the Medicaid program,” Mann said.

Commissioner Sara Rosenbaum, JD, founding chair of the department of health policy at George Washington University here, noted that CMS seems to be returning Medicaid to being a flexible federal program, with waivers used as a way to fill the gaps.

She later suggested the commission look into suggesting long-term waivers for states that prove their efforts are worthy of less federal oversight. Today, the waivers are needed every 3 to 5 years.

Mann also said CMS is working toward streamlining its waiver-approval process trying to make it faster to approve waivers similar to those CMS has considered in the past. The agency is doing this through modules of similar waiver applications to provide states with guidance on what CMS is needing for approval.

The agency is also trying to align quality improvement and evaluation plans among Medicare, states, and private insurers, while also simplifying enrollment and eligibility determination.

Most importantly, Mann said, CMS is working to increase the transparency and add public input to its approval process.

For example, the Affordable Care Act (ACA) now mandates that states release their proposals for public comment before submitting them to CMS. The federal government must also publish waivers before it enacts them.

“The waiver process has long been criticized as this inter-working deal that’s cut between the federal government and the executive body at the state level,” Mann said.

A lack of transparency and public input was one problem addressed by the Government Accountability Office (GAO) in the watchdog’s review of CMS’ waiver process, Katherine Iritani, director of health issues at the GAO, told MACPAC Thursday.

“Given the significant federal expenditures governed by these demonstrations, there’s a need for improved accountability and transparency in HHS’ review and approval process,” Iritani said.

The GAO is expected to release next month an updated report on waivers approved since 2007.

The MACPAC panel also heard an update on the use of premium assistance as a mechanism for Medicaid expansion under the ACA.

The update focused on Arkansas. That state is trying to use premium assistance to move its childless adults — who would normally be eligible for Medicaid when that program is expanded — into the state’s health insurance exchange, where they would purchase private insurance instead.

Kentucky Introduces New Health Insurance Exchange

Reported by: Aaron Adelson



Published: 5/15 3:48 pm


Updated: 5/15 7:20 pm


As part of the Affordable Care Act, Governor Beshear announces Kentucky’s new health insurance exchange program. It’s called Kynect.

Governor Beshear says Kentucky ranks at, or near the bottom in most health statistics.  He says too many people are using the emergency room instead of seeing a primary care physician.

“This lack of early care is one reason Kentucky’s heath picture is so horrendous,” said Governor Beshear.

He says a big part of the problem is a lack of health insurance.  The Governor says about 650,000 Kentuckians are uninsured.  He says this hurts the state in a number of ways.

“A kid is not going to do better in school if they’re sick, if they don’t feel good, if they’ve got bad teeth,” said Beshear.

Last week, the Governor announced half of the uninsured will now be eligible for Medicaid.  The other half will be able to purchase health insurance through Kynect.

“There’s always that fear of the unknown.  I would refer you to Massachusetts in 2006, when then Governor Mitt Romney instituted a program very similar,” said Beshear.

You’ll be hearing a lot about Kynect.

“There will be a full scale advertising campaign,” said Beshear.

The state says 5 insurance companies plan to participate in the exchange.  The state hopes to know how much the plans will cost at the end of the month.

To learn more about Kynect, you can go to:



CMS’ dual eligible demo savings sources uncertain

May, 14 2013

By: Anthony Brino | Healthcare Payer News

The Centers for Medicare & Medicaid Services (CMS) is looking to more than a dozen dual eligible demonstrations to fulfill the quality improvement and cost saving aims of the Affordable Care Act, although in the five demonstrations approved so far, the exact sources of projected savings remain largely unclear, according to the Kaiser Family Foundation.

CMS has finalized memoranda of understanding with California, Illinois, Massachusetts and Ohio to test a capitated payment model for Medicare-Medicaid beneficiaries, as well as an MOU with Washington State to test a managed fee-for-service model.

Washington is also proposing to test a capitated payment model, which, along with proposals from 16 other states, is pending CMS approval. The agency plans to limit national enrollment in the three year demonstrations to 2 million patients — out of some 9 million dual eligibles — and so far the five state proposals approved include 843,000, about half of them in California and 200,000 in greater Los Angeles alone.

[See also: Q&A: Primary care models for dual eligibles]

While the federal government and the states are expecting cost-savings from the demonstrations, in addition to better care and less bureaucratic hurdles for patients, a Kaiser Family Foundation issue brief notes that the five MOUs don’t explain how the expected cost savings will be achieved, but largely assume savings from community and home-based care.

Illinois, which has one of the highest rates of potentially avoidable hospital admissions for dual eligible patients nationally and one of the highest proportions of spending on institutional services, is expected to yield a one percent savings in the first year of its demonstration, for about 135,800 patients participating, followed by three percent and five percent savings in years two and three.

The MOUs for Massachusetts and Ohio are expecting savings of one percent, two percent and three percent in years one, two and three. California, which will have about 456,000 patients participating, is expecting to see minimum savings of one percent, two percent and four percent over three years, and maximum savings of 1.5 percent, 3.5 percent and 5.5 percent — the highest in the approved demonstrations, Kaiser’s brief notes.

Washington, meanwhile, will test CMS’s managed fee-for-service model, and any savings will be determined retrospectively.

The demonstrations are focusing on slightly different patient populations. Massachusetts is targeting nonelderly patients with disabilities, Washington, high risk and high cost patients, and California, Illinois and Ohio, elderly and nonelderly in select regions.

Massachusetts is requiring participating health plans to contract with community-based organizations to provide independent living and long-term services and support coordinators. Ohio is requiring health plans to contract with Area Agencies on Aging for home and community-based services for enrollees over age 60.

California is requiring plans to establish MOUs with county behavioral health agencies for specialty mental health services and with county social services agencies to coordinate in home support. Washington’s demonstration will use home care coordination organizations to manage services among existing Medicare and Medicaid providers.

Testing the capitated financial alignment model in California, Illinois, Massachusetts and Ohio, health plans will receive capitated payments from CMS for Medicare services and the state for Medicaid services, with the baseline capitation for Medicare Parts A and B services determined through a blend of the Medicare Advantage benchmarks and the Medicare fee-for-service standardized county rates, weighted by whether patients expected to transition into the demonstration are enrolled in Medicare Advantage or traditional Medicare in the prior year.

Baseline capitation payments for Medicare prescription drug services will be based on the national average monthly bid amount, the average projected low-income cost sharing subsidy and the average projected federal reinsurance amounts. In Illinois and Massachusetts, baseline Medicaid capitation payments will be based on historic state spending, and in California and Ohio Medicaid payments will be based on managed care waiver capitation rates.

As the Kaiser Family Foundation notes, the projected savings from the demonstrations are assumed to come from increased care coordination and the use of home and community-based services, with decreases in the use of institutional settings, emergency room visits and avoidable hospitalizations. Those savings will be deducted up-front from the Medicare and Medicaid contributions to health plans in the capitated model and savings will be determined retrospectively in Washington’s managed FFS model.

The specific details of those savings aren’t specified in the three-way contracts between CMS, the state and the insurers, and still remain to be seen, Kaiser noted. But CMS is preparing to evaluate the demonstrations as a whole and on more granular levels.

The agency has contracted with RTI international, which will visit care sites, study changes in quality, healthcare utilization and costs, and calculate attributable savings, which are set to be reported quarterly after the demonstrations begin later this year and next.

Article Link:

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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Gov. Beshear Expands Health Coverage to over 300,000 Kentuckians

Thursday, 05 09, 2013

Kerri Richardson
Terry Sebastian


Decision means every Kentuckian will have opportunity to obtain affordable health insurance;
Expansion will create nearly 17,000 jobs and $15.6 billion in economic impact

FRANKFORT, Ky. – Calling it “the single-most important decision in our lifetime for improving the health of Kentuckians,” Gov. Steve Beshear today announced the inclusion of 308,000 more Kentuckians in the federal Medicaid health insurance program. The expansion, together with the creation of the Health Benefit Exchange, will ensure that every Kentuckian will have access to affordable health insurance.

The expansion – made in accordance with the federal Affordable Care Act (ACA) – will help hundreds of thousands of Kentucky families, dramatically improve the state’s health, create nearly 17,000 new jobs and have a $15.6 billion positive economic impact on the state between its beginning in Fiscal Year 2014 and full implementation in Fiscal Year 2021, he said.

“I have repeatedly said that I believe it is in the best interest of the Commonwealth and its citizens to provide better access to health care for our people. My only concern was the cost,” said Gov. Beshear. “We have now done the exhaustive research – and our conclusion matched what most other states have found: by expanding Medicaid, Kentucky will come out ahead in terms of both health outcomes and finances. In fact, if we don’t expand Medicaid, we will lose money.”

Several months of internal analysis – as well as outside studies conducted by the University of Louisville and the Price Waterhouse Coopers accounting and actuarial firm – determined that the expansion was a good deal for those families and for taxpayers. The reviews gathered information about possible impacts to citizen health, the state budget, workforce and economic development.

Medicaid currently provides health care for low-income or disabled citizens. After the U.S. Supreme Court upheld the ACA last year, states have the option to expand Medicaid eligibility to individuals who earn up to 138 percent of the Federal Poverty Level (FPL), with the guarantee that the federal government will cover the entire cost for the first three years.

The expansion will be effective January 1, 2014. By expanding, every Kentucky citizen will have access to affordable health care, either through Medicaid or through the Health Benefits Exchange – no one will fall into a coverage gap.

The Governor cited several key reasons for expanding the program, including:

  • drastic improvements to Kentucky’s abysmal health rankings;
  • millions in savings to the state budget and Kentucky taxpayers;
  • billions in economic impact to the state, including nearly 17,000 new jobs;
  • preventing costly penalties to businesses and protecting hospital funding; and
  • broad support from health care advocates, county officials, and medical providers.

Access to Health Care Improves Kentuckians’ Health

About 640,000 Kentuckians are uninsured. By expanding Medicaid eligibility, an estimated 308,000 Kentuckians will qualify for health care coverage –– a population greater than the size of Lexington and Fayette County.

Gov. Beshear pointed to Kentucky’s dismal rankings in multiple health outcomes as one of the reasons to give lower-income Kentucky families access to reliable, quality health care. In 2012, Kentucky’s overall health ranking was 44th. Kentucky is at the bottom of many national health rankings, including 50th in smoking, 40th in obesity, 41st in diabetes, 50th in cancer deaths, 49th in heart disease, 43rd in high cholesterol, 44th in annual dental visits and 48th in heart attacks.

“I, for one, am tired of being at the bottom,” Gov. Beshear said. “Giving every Kentuckian access to affordable health care coverage will help us tackle these abysmal health outcomes. Our poor health has contributed to us being a poor state. Improved health will help improve our education levels and job opportunities.”

Multiple state and national reports show that when someone has or gains health coverage, there are measurable improvements in health status, including a decrease in delayed care and reduction of mortality rate. When larger groups gain health coverage, the workforce improves.

Conversely, if Kentucky chose not to expand eligibility, the state would create a coverage gap for hundreds of thousands of citizens. The Supreme Court ruling on ACA making expansion optional created a coverage gap for those who are not eligible for a state’s existing Medicaid program, but whose income is too low to qualify for premium subsidies through the Health Benefit Exchange. In Kentucky, up to 206,000 citizens would fall into this gap – not eligible for Medicaid benefits, but also unable to get subsidized coverage through the exchange.

“When people don’t have insurance, they skip regular checkups. They go without medicine. They delay examinations for early symptoms. When they do end up in an emergency room, their health problems can be much more advanced, and more difficult and expensive to treat,” said Audrey Tayse Haynes, Secretary of the Cabinet for Health and Family Services. “Expanding Medicaid offers hardworking Kentuckians the security of reliable medical care to keep them on the job and catch serious health threats before they become debilitating or fatal.”

Expanding Health Care Saves Kentucky Taxpayers Millions

The administration’s review of health care expansion included heavy emphasis on both its immediate and long-term financial impact for the state. The following issues emerged: 1) the costs the state will incur from other mandates of ACA; 2) savings the state will realize through shifting current state budget burdens to the federal government; and 3) generation of new state and local revenues.

Regardless of whether or not Kentucky expanded Medicaid, the federal law adds costs to state Medicaid programs, including substance abuse treatment coverage for existing Medicaid recipients, additional administrative costs and a loss of federal Disproportionate Share Hospital (DSH) payments that pay for indigent care.

Adding newly eligible citizens to Medicaid rolls creates an increase in tax receipts and state revenue, and allows the state to move some current state spending to federal spending. Those revenue-generating and cost-shifting steps add up.

However, with the other requirements of the ACA, upon full implementation of the federal law, it would cost the state more if we did not expand Medicaid. Without expansion, analysts estimate Kentucky would see a negative state budget impact of nearly $40 million by full implementation in FY21.

“When we examined expansion purely from a financial standpoint, there was no question that expanding offered much more benefit for our budget,” said state budget director Jane Driskell. “With the federal government covering the full cost of expansion for the first three years, combined with the ability to shift some of our current cost burden to the federal government, expansion will be a very large net positive to our taxpayers’ bottom line – an estimated $802.4 million.”

The federal government will fund 100 percent of the expansion costs for three years starting in 2014, and then will gradually decrease funding to 90 percent in 2020. Additionally, states can change their expansion plan at any time; if circumstances change and expansion is no longer a benefit to Kentucky, the state can pull back the expansion.

Expansion Generates Millions in Recurring Revenue; Creates Nearly 17,000 Jobs

Expanding Medicaid coverage to families at or below 138 percent of the poverty line will have an economic impact of $15.6 billion between FY14 and FY21, the first year of full implementation. Those funds will come from an increase in health care spending, increases in state and local tax receipts, and savings created by moving certain expenditures from the state to the federal government.

The increase in jobs will occur quickly. Kentucky is expected to create about 7,600 new jobs in the first year of Medicaid expansion alone, due largely to the additional $608 million in health care spending generated as a result of expansion. By 2021, expansion is estimated to be responsible for the employment of nearly 17,000 Kentuckians annually, with an annual average salary of more than $43,000.

Expansion Saves Money for Businesses, Maintains Funds for Hospitals

Expanding Medicaid avoids costly penalties for businesses with employees that would have met the 138 percent FPL threshold for Medicaid coverage. Expansion also provides reliable reimbursement for hospitals after the required reduction of DSH payments.

If Medicaid is expanded, companies whose employees qualify for coverage through Medicaid and are between 100 and 138 percent of FPL, face no penalties. However, if Medicaid is not expanded, those employers would be responsible for $3,000 in fines for every employee who instead receives a premium subsidy to purchase insurance elsewhere. These penalties would cost Kentucky employers an estimated $32 million to $48 million every year.

Hospitals use federal DSH payments to help cover the cost of treating low-income, uninsured patients. Because the Affordable Care Act assumed all low-income individuals would have access to coverage either through Medicaid expansion or a Health Benefit Exchange, the law reduces federal DSH payments to the states. For Kentucky, the reduction is an estimated $287.5 million through FY21. If a state expands Medicaid, many of the previously uninsured will be Medicaid-eligible and hospitals will receive reimbursement for their care. Without expansion and with the reductions in DSH payments, hospitals would be forced to find alternative ways to address the sudden drop in their budgets.

Broad Spectrum of Support for Expansion

Dozens of health care organizations, advocacy groups, county and local officials and private citizens have expressed their strong preference for Kentucky to expand Medicaid. These groups also see the financial and health benefits of providing access to health care to every Kentuckian. A list of those groups is attached.

“Expanding Medicaid is a major policy decision with significant long-term economic and health consequences,” said Susan Zepeda, president and CEO of Foundation for a Healthy Kentucky. “Our Kentucky Health Issues Poll shows that a vast majority of Kentuckians – more than 80 percent — favor providing access to affordable, quality health care for all Americans. We applaud the Governor’s decision.”

“Uninsured individuals often utilize emergency rooms for conditions which could be more appropriately and inexpensively treated by a primary care provider,” said Dr. Michael Karpf, executive vice president for health affairs at the University of Kentucky. “Expanding Medicaid coverage will create opportunities to improve access to care and improve the ability of organizations such as UK HealthCare to more effectively manage both acute and chronic conditions for our most vulnerable patient populations.”

“The Governor’s decision to expand Medicaid coverage to uninsured Kentuckians is significant for county governments. Fiscal courts pay a tremendous amount for the medical coverage of jail inmates. This coverage for catastrophic medical needs of inmates will greatly reduce jail medical costs for counties,” said Vince Lange, executive director of the Kentucky County Judge/Executive Association.

“Today, the Governor of Kentucky is making a decision that will provide the largest benefit to low-income Kentuckians in over 40 years,” said Natalie Harris, executive director of the Coalition for the Homeless. “The Coalition for the Homeless strongly supports this decision which will insure health care for over 95 percent of homeless Kentuckians from the present coverage rate of 15 percent.”

The ‘Arkansas Option’ is More Expensive, Costs Outpace Benefits

Arkansas plans to provide health insurance to individuals at 138 percent of FPL or below, but instead of enrolling them in Medicaid, Arkansas plans to purchase private insurance through their Health Benefits Exchange (HBE). While HBE rates are not yet available, preliminary information from the Congressional Budget Office and Massachusetts indicates that this option could be 50 percent to 66 percent more expensive than traditional Medicaid.

If that plan were applied to Kentucky, not only would costs exceed benefits by 2021, but we would likely never make up the loss. Beyond 2021, costs are expected to grow at nearly 4 percent annually, while the combined benefits would only increase at 2 percent, meaning that the gap would continue to expand over time.

Who is Eligible for Kentucky Medicaid

In Kentucky, Medicaid or Kentucky Children’s Health Insurance Program (KCHIP) benefits are currently available to:

  • Adults if they have disability, serve as the caretaker relative for a child who is eligible for Medicaid and on average has income below 43 percent of (FPL), or are pregnant; and
  • Children with family income up to 200 percent of FPL.

Expansion will allow more than 308,000 Kentuckians to access reliable, quality health care. The new threshold of 138 percent of FPL means a single person with no children earning less than $15,856 per year is eligible to sign up for Medicaid. A family of four with an annual income of less than $32,499 is also eligible.

Most of the Kentuckians who will be eligible are the working poor. This includes people who work at minimum wage jobs for fewer than 40 hours per week; individuals who are self-employed; or single parents whose children are covered through KCHIP.

Jana Bailey of Berea is one of the hundreds of thousands of Kentuckians who will have health insurance thanks to the expansion. She and her husband have four children, and while her husband has health coverage through his job, Jana does not. “I work part time, but we cannot afford health care coverage for me,” said Bailey. “I will no longer have the added stress of hoping nothing happens to me because I don’t have health care coverage. This program will greatly benefit my family as well as many others throughout our state who are in the same situation.”

Where to find more information:

A new state website houses information about the expansion, including the CHFS white paper and letters from supporters. Visitors can also explore county-by-county data such as how many citizens will be newly eligible for Medicaid, or how much county jails spent on medical care last year. Visit to learn more.


Link to Press Release

Beshear expected to announce Medicaid expansion

by Associated Press

Posted on May 9, 2013 at 1:24 PM

Updated today at 1:27 PM

FRANKFORT, Ky. (AP) — Gov. Steve Beshear is expected to announce Thursday that Kentucky will expand its Medicaid program to cover hundreds of thousands of additional people, a move that drew both praise and criticism ahead of a scheduled afternoon press conference.

Kentucky’s Medicaid program already provides medical coverage to some 800,000 low-income residents. The Affordable Care Act allows states to expand coverage to some 300,000 additional Kentuckians with incomes up to 138 percent of the federal poverty level, or nearly $15,860 for individuals.

“Despite decades of hard work, too many Kentuckians are one illness or one accident away from financial ruin because they lack access to affordable, adequate health care coverage,” said Cathy Allgood Murphy, a lobbyist for AARP Kentucky. “By accepting federal funds for health care expansion, Kentucky can make a real difference in the lives of thousands of people.”

Tea party activist David Adams predicted the move will result in additional government waste.

“Medicaid provides little more than large opportunities in health care fraud and inefficiency for politicians who can’t do math,” Adams said in a statement.

Nationally, about 15 million people — mostly adults with no children living at home — could eventually be covered if all states expand. But the Supreme Court last year gave states the right to reject the expansion without jeopardizing the rest of their federal Medicaid funds.

Expanded Medicaid will be available starting Jan. 1, and uninsured people can start signing up this fall. So far, 21 states plus Washington, D.C., have accepted the expansion, while 14 states have turned it down. Another 15 states are still weighing options.

Nearly all the states refusing are led by Republicans. Several of the states accepting have Republican governors, but most are led by Democrats. Washington will pick up the entire cost of the expansion for the first three years, and 90 percent over the longer haul. It’s estimated that less than $100 billion in state spending could trigger nearly $1 trillion in federal dollars over a decade.


Beshear says Kentucky will join Obamacare plan to expand Medicaid

By Beth Musgrave —

FRANKFORT — Gov. Steve Beshear announced Thursday that Kentucky will expand the federal and state Medicaid program to provide coverage to an estimated 308,000 Kentuckians currently without health insurance.

At a news conference at the Capitol, Beshear called the decision to expand Medicaid for the poor and disabled “the single most important decision in our lifetime” to improve the health of Kentuckians — who traditionally rank near the bottom nationally in nearly every health indicator.

Expanding Medicaid could add 17,000 jobs and pump more than $15.6 billion into the state’s economy in the next six years by putting more money into the state’s medical infrastructure, Beshear said.

That data came from analysis conducted by University of Louisville and Price Waterhouse Coopers on the potential financial impact of expanding the program that accounts for roughly 14.8 percent of the state’s current two-year budget.

With Beshear’s announcement, Kentucky becomes the 21st state to expand Medicaid, a key provision of the Patient Protection and Affordable Care Act, commonly referred to as Obamacare.

A 2012 U.S. Supreme Court decision left the expansion of Medicaid up to states.Twenty states — mostly with Democratic governors — and the District of Columbia had already opted to expand.

The expansion of Medicaid will now include people whose income is at or below 138 percent of the poverty level. That means someone who makes $15,415 a year or less, or a couple making $20,879 a year or less, would be eligible for Medicaid beginning Jan. 1.

Health care advocates, many hospitals and medical associations have pushed for the expansion, saying it will help the state’s finances and its overall health rankings.

But Kentucky Republicans have repeatedly tried to block key portions of the Affordable Care Act, including the creation of a health benefits exchange, an online insurance marketplace for people who don’t have health insurance.

The Republican-controlled Senate also passed legislation in the most recent legislative session that would have required Beshear to get legislative approval before an expansion could occur. That bill died in the Democratic-controlled House.

Kentucky Republicans have questioned how much the Affordable Care Act will eventually cost the state, which already spends $6 billion in federal and state money on the program.

But Beshear said Thursday that after months of study, he thinks state coffers and Kentucky businesses and hospitals would be hurt if the state does not expand Medicaid.

“We have now done the exhaustive research, and our conclusion matched what most other states have found: By expanding Medicaid, Kentucky will come out ahead in terms of both health outcomes and finances. In fact, if we don’t expand Medicaid, we will lose money.”

Without expansion, the cost to the state could be an estimated $40 million by full implementation in 2021, Beshear said.

Under the Affordable Care Act, the federal government will pick up 100 percent of the tab for the additional 300,000 people for three years beginning in 2014.

The federal contribution rate will be reduced gradually beginning in 2017, eventually dropping to 90 percent in 2020. The state then will pick up the remaining 10 percent.

Currently, the federal government picks up 70 percent of the Medicaid costs, and the state pays for 30 percent.

Beshear said that if Kentucky did not expand Medicaid so more people would have coverage, there would be more than 206,000 people in Kentucky who would not be eligible for subsides to buy health insurance on the health benefit exchanges. That means many people — mostly the working poor, who work minimum-wage jobs but have no insurance benefits — would continue to be without health insurance.

Kentucky companies also could face fines totaling between $32 million and $48 million a year if they employ people who qualify for the Medicaid expansion but don’t offer health insurance, Beshear said Thursday. Kentucky hospitals could lose substantial amounts of money if Medicaid is not expanded, Beshear said.

Hospitals receive payments under the current Medicaid system to care for the uninsured. Those payments will gradually decrease as more people are insured.

If some of Kentucky’s 604,000 uninsured seek treatment at the state’s hospitals, those hospitals will not be able to recover that cost, Beshear said.

“With the federal government covering the full cost of expansion for the first three years, combined with the ability to shift some of our current cost burden to the federal government, expansion will be a very large net positive to our taxpayers’ bottom line — an estimated $606 million,” said Jane Driskell, the state budget director.

To control spiraling costs in the Medicaid program, Kentucky moved roughly 500,000 people to three private managed-care companies in November 2011. Those contracts will have to be amended to include the additional 300,000 people on the state’s Medicaid rolls.

Beshear said that if the cost becomes a burden, the state can opt out of the expansion at any time.

Many social justice groups and health care advocates applauded Beshear’s decision.

“Expanding Medicaid for adults without health insurance is a smart investment for Kentucky,” said Terry Brooks, executive director of Kentucky Youth Advocates. “It creates an opportunity to address the health needs of Kentucky citizens without adding too great a burden on the state budget.”

Dr. Michael Karpf, executive vice president of health affairs at the University of Kentucky, said uninsured patients delay treatment or use emergency rooms for primary care. Expanding Medicaid will improve treatment and decrease costs, he said.

“Uninsured individuals often utilize emergency rooms for conditions which could be more appropriately and inexpensively treated by a primary care provider,” Karpf said. “Expanding Medicaid coverage will create opportunities to improve access to care and improve the ability of organizations such as UK Health Care to more effectively manage both acute and chronic conditions of our most vulnerable patient populations.”

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog: ­