Study estimates cost of Medicaid expansion in Kansas

Kansas could spend $600 million more than it would otherwise over 10 years if it opts to expand Medicaid, according to an independent analysis requested by the state.

When the Medicaid expansion is in full effect, it could help insure an estimated 151,000 more low-income Kansans.

With the expansion, the state’s general fund would spend a total of $1.1 billion on Medicaid over 10 years, according to a news release from the Kansas Department of Health and Environment. Without an expansion, the study still forecasts a $513.5 million increase, in part because people who are now eligible for Medicaid but not enrolled could sign up.

The state hired Aon Hewitt to conduct the study and released a summary Friday. The full report will be available next week.

The federal Affordable Care Act includes the expansion of state-run Medicaid programs. The Supreme Court, however, ruled that states could opt out of the expansion plan.

Gov. Sam Brownback has said he wants to see if the state can reach a compromise with the federal government regarding the possible expansion. The governor did not include money for the expansion in his proposed budget.

A statement from Brownback’s press secretary Friday said: “For Kansas to expand the Medicaid program as the ACA requires, the state would need more than one billion dollars in new expenditures. This impact would be significant and would directly affect the ability of the state to fund other core responsibilities like K-12 education and public safety. And if the federal government fails to keep its promise to pay for its part of the expansion, the direct impact would be even greater.”

The federal government is offering to pay 100 percent of the cost of expansion for the first three years, dropping to 90 percent after that.

Even without expansion, the study predicts that Medicaid enrollment in Kansas will increase by more than 20,000 people in 2014.

About 380,000 Kansans are now on Medicaid, according to the Kaiser Family Foundation.

House Speaker Ray Merrick, a Republican from Stilwell in Johnson County, said he expects a strong debate over Medicaid expansion, which he opposes.

“I’m not one to trust the federal government to have the money,” he said. “They don’t have the money for a lot of things right now. It’s borrowed money.”

Rep. Jim Ward, a Wichita Democrat, recently introduced legislation to expand Medicaid.

“For about $600 million over the next 10 years, we can cover more than 180,000 more Kansans,” Ward said of the newly released study. “That’s a pretty good deal when you consider the cost of health insurance today.”

With expansion, Ward said, he expects a “multiplier effect” in the health care sector, including more jobs to take care of the larger Medicaid population.

Beyond the economic impact, he also says it’s the right thing to do.

“People with health insurance live longer, have healthier lives and are more productive,” Ward said. “When you look at it, the pros far outweigh the cons.”

Ward said the next step for his bill is a public hearing.

The current Medicaid eligibility threshold for Kansas is annual income that is less than 32 percent of the federal poverty level, which is about $5,900 for a family of four, according to the Kansas Health Institute.

The proposed federal expansion would push the ceiling beyond 130 percent of poverty level.

For example, the cutoff would be about $15,400 in income per year for an individual and about $31,800 for a family of four.

An estimate by the Kansas Policy Institute, a conservative think tank, pegs the cost of expansion at more than $2 billion.