Kansas and Missouri would absorb smaller Medicaid cuts than most other states under health care bills proposed by Republicans in Congress. But they might still hurt, because both states already have fairly lean Medicaid programs.
That’s according to an analysis of state Medicaid programs and an analysis of the proposed Republican changes by policy think tanks.
Medicaid is now an open-ended program jointly funded by the federal government and the states. The more Medicaid money the states put in, the more the federal government matches in percentages that differ based on the strength of each state’s economy. The feds pay about 55 percent of the costs of Kansas Medicaid, or KanCare, and about 65 percent of Missouri Medicaid, or Mo HealthNet.
Republicans in both the U.S. House of Representatives and U.S. Senate have proposed legislation that would change that to hold down costs. They’re offering to pay states either a block grant based on previous spending or per capita payments based on the number of people in their programs.
Those proposals have caused angst, especially among disability groups whose members rely on Medicaid not only for medical care, but for support services that allow them to live at home rather than institutions.
A group of Kansas disability advocates were arrested while protesting in Senate Majority Leader Mitch McConnell’s office, before McConnell decided to delay a vote on the Senate bill.
The Congressional Budget Office estimates the House and Senate bills would reduce Medicaid spending by 25 percent to 35 percent nationwide in the long term. But those cuts would fall more deeply on states that expanded Medicaid under the Affordable Care Act, commonly called Obamacare.
According to an analysis by the Urban Institute, the per capita caps in the House bill would reduce Kansas and Missouri Medicaid by about 3.5 percent, among the smallest reductions in the country. States that expanded, like Colorado (20 percent) and New Jersey (21 percent), would have to absorb much more.
“The cost to the states that didn’t do expansion is not that much,” said U.S. Rep. Andy Harris, a Republican from Maryland and a physician.
But an analysis of state Medicaid programs by the Kaiser Family Foundation found that Kansas and Missouri might have more difficulty absorbing cuts than other states.
‘More with less’
Both states already have fairly restrictive Medicaid programs that mostly serve children, pregnant women, the elderly and people with disabilities. Both rank in the bottom half of states in overall population health, meaning they have sicker, more costly residents to cover. And both rank in the bottom half of states in percentage of physicians that take new Medicaid patients, meaning their reimbursement rates already aren’t enticing to doctors.
Missouri has debated cutting its costs by expanding the use of managed care, which it currently uses for only about half its Medicaid population. But in Kansas nearly everyone on KanCare is already under managed care under the administration of three private insurance companies.
Jim Barnett, a former Republican state senator from Topeka who is also a physician, said the Republican bills would force the state to reduce Medicaid services.
“The net result would be a negative impact on the health of Kansans and more hospital closures, especially in rural areas,” said Barnett, who is running for governor. “This will likely impact nursing home patients and seniors. As a state, we would have to search for ways to do more with less.”
The state just finished doing that. Facing a persistent state budget crisis, Kansas Gov. Sam Brownback cut most KanCare provider rates 4 percent last year. Providers said the cuts were a strain and some specialties like dentistry saw providers drop out of KanCare over it.
Most stayed in the program under the assumption that the cut would be temporary. Legislators voted to restore it this session, and the rates are set to go up July 1.
Sean Gatewood is co-administrator of the KanCare Advocates Network, a group that represents Kansans on Medicaid. He said the Senate Republican bill would reduce Medicaid even more than the House’s 3.5 percent, especially after 2025.
“That’s when the cuts get nasty,” Gatewood said. “It just compounds on itself.”
That’s because the Senate bill ties the per capita caps to the general inflation rate, rather than the inflation of medical care, which rises faster.
Harris he prefers the House position on that and said states will be able to adjust to the Medicaid funding limits because the Republican bills will give them more flexibility in how they spend their federal dollars. By wiping out some federal rules, Harris said states will be able to do more with less.
“We believe the federal government doesn’t deliver it as well as the state can,” Harris said.
Kansas Lt. Gov. Jeff Colyer, a surgeon and one of the architects of the switch to managed care under KanCare, agreed.
Colyer, in a prepared statement, said congressional Republicans should forge ahead.
“I support the continued efforts to repeal and replace Obamacare,” Colyer said, “and encourage the Senate to provide the flexibility needed to empower Kansas solutions to address Kansas problems.”