Kelly, Denning reach deal to expand Medicaid in Kansas. But lawmakers must still vote

The prospect of Democratic Gov. Laura Kelly and Senate Republican Leader Jim Denning reaching a grand compromise on Medicaid expansion appeared remote last May, following a legislative session where demonstrators unfurled banners accusing GOP leaders of having “blood on their hands.”

But on Thursday, the sometimes-rivals strode into the Capitol rotunda to announce just such a deal before a rapturous pro-expansion crowd. The extraordinary event marked a rare bipartisan agreement that could ultimately expand health coverage to more than 100,000 Kansans.

“Sen. Denning and I did not end the 2019 legislative session on particularly friendly terms, but we kept at it,” Kelly said as Denning stood nearby. “We kept talking and the result is the proposal you have before you today.”

Despite past disagreements, the two had incentive to find common ground. Denning, expected to face a tough re-election campaign, had vowed to develop an expansion plan. And Kelly’s proposal had passed the House but languished in the Senate, leaving one of her signature goals unaccomplished in 2019.

Their accord came together over the past three months, after Denning publicly rolled out his plan in October. The two first made contact about expansion through an intermediary in early November, according to a person familiar with the negotiations.

Kelly and Denning held two lengthy meetings in in December, in the governor’s office on the second floor of the Capitol. A person familiar with the meetings said one session lasted two-and-a-half hours and the other lasted an hour and a half. By the end of the second session, in the days before Christmas, there was an agreement in concept.

Kelly described the talks as resembling conference committees where lawmakers from the House and Senate reconcile competing versions of the same bills. “There was a lot of back and forth across the table, each of us discussing our position on certain issues and coming to consensus,” she said.

If passed, the measure will bring Medicaid expansion to Kansas nearly a decade after Congress approved the Affordable Care Act, the law that encouraged states to grow the health coverage program. Kansas is just one of 14 states that have not expanded.

Kelly and Denning signaled the strength of their support by announcing that 22 senators -- 11 Republicans and 11 Democrats -- had agreed to co-sponsor the bill. In the Senate, 21 votes are needed to pass legislation.

“We’ll be working with our respective caucuses in the coming days to get their feedback and buy-in,” Denning said. “But all sides can find something in this bill to like. That means it’s probably about as middle of the road as it can get.”

Republican opponents of expansion moved quickly to condemn the plan, however. Senate President Susan Wagle, a Wichita Republican who is also running for U.S. Senate, invoked her status as a cancer survivor in rejecting the proposal.

She said that while no issue is more important to her than healthcare, “expanding a broken system” won’t address “the one problem most Americans face.”

“That is, the escalating cost of health insurance and the ever increasing out of pocket deductibles that prop up Obamacare,” Wagle said in a statement. “Socialized government run healthcare is not the answer for Kansans. Healthcare reform is.”

Sen. Ty Masterson, an Andover Republican, said that if Denning was Patrick Mahomes, the Chiefs quarterback, “he just threw a ‘pick six’ to the opposing team and then celebrated with them in the end zone.”

The plan expands Medicaid eligibility to 138 percent of the federal poverty level ($25,750 for a family of four) and uses a surcharge on Kansas hospitals to help pay for the increased costs. It includes a program to refer Medicaid recipients for work, but doesn’t require work – a provision some Republicans had sought.

If Kansas increases eligibility to 138 percent of the poverty level, the federal government will pay 90 percent of the cost. Supporters say to not expand means leaving federal funding on the table, while critics warn against a costly new entitlement that would be difficult to ever unwind.

The plan also allows Kansas to move forward on creating a re-insurance program (essentially insurance for insurance companies) designed to make healthcare on the federal exchange more affordable. Denning pressed for re-insurance.

And it will create an advisory panel to explore ways to help rural hospitals. Several small-town hospitals across the state have closed in recent years. Supporters say such hospitals will face declining revenue from a shrinking population of uninsured, who often use emergency rooms for their care.

“From an advocates’ perspective, it’s not everything we had hoped for. But I think that it is absolutely a strong proposal and one we hope will able to garner support on both sides of the aisle,” April Holman, director of the pro-expansion Alliance for a Healthy Kansas, said.

The compromise was a stunning turn of events for Denning, who had previously been seen by expansion supporters as an obstacle.

The Overland Park Republican, will likely face Democratic Rep. Cindy Holscher this fall, in what is expected to be a closely contested race. Holscher, who has highlighted Denning’s previous votes against expansion, said in a statement? Thursday that while process appears to be moving in a positive direction, “there is much work left to do and this is far from ‘done.’”

Senate Vice President Jeff Longbine, an Emporia Republican who supports expansion, said Denning has tried to ensure

Kansas can afford the costs of expanded Medicaid and that hospitals are not overly-burdened by taxes and regulations.

“I’ve got to give Sen. Denning all the credit in the world because this has consumed his entire interim (time between sessions) and he is the mastermind that put this together,” Longbine said.

The Kelly-Denning compromise is expected to be formally filed on Thursday. It’s unclear how quickly lawmakers will debate it after session begins on Monday. Senate Minority Leader Anthony Hensley, a Topeka Democrat, said a hearing will probably be held first.

After that, lawmakers have options. But the quickest possible route would be to amend the plan into the expansion bill that already passed the House and is currently sitting in the Senate. If senators approve that bill, the House would only have to hold one vote to send the plan to Kelly.

Rep. Susan Concannon, a Beloit Republican who supports expansion, predicted the bill would pass the House. She said the plan “has enough Republican flair to it” that GOP lawmakers who have previously backed expansion will remain on board.

She said she couldn’t recall a previous bipartisan compromise of this scale in Kansas in recent memory.

“This is my eighth session,” Concannon said. “I’ve never seen it.”

This story was originally published January 9, 2020 at 11:03 AM with the headline "Kelly, Denning reach deal to expand Medicaid in Kansas. But lawmakers must still vote."