Medicaid ‘monster’ keeps growing

Inflation has driven up spending on health care for poor by 30 percent the past two years

Over the past two years, state spending on health care for the poor has increased 30 percent.

“When you spread that over a $1.8 billion Medicaid budget, that’s a big chunk of change,” said Scott Bruner, director of medical policy at the Kansas Department of Social and Rehabilitation Services.

Medicaid spending is expected to go up another 9 percent this year, topping $2.1 billion. The state funds 40 percent of the costs, with the federal government footing the rest.

“This is all about medical inflation,” Bruner said. “We are not immune from the forces that are driving up the private-sector costs as well.”

Lawmakers aren’t sure what to do. If they try to curb growth by limiting access, hundreds of elderly and disabled Kansans will end up on long, unpopular waiting lists for services.

If they cut rates, dozens of doctors and pharmacists will drop out of the system, sending an ever-increasing number of poor people to hospital emergency rooms. If they do nothing, Medicaid will continue to punch giant holes in the state budget, draining dollars that might be spent on other programs such as education.

“This can’t continue. No other part of the budget has gone up this much or this fast,” said Rep. Bob Bethell, R-Alden.

“Pretty soon, it’s going to take over. It’s become a monster,” said Bethell, a member of the House subcommittee that oversees the SRS budget.

Poor, elderly, disabled

State reports show that most of the increase is being driven by more families — single mothers with small children, mostly — becoming poor enough to qualify for Medicaid, and by the disabled and elderly using more services and prescription drugs.

“Utilization among the elderly and disabled has grown fairly fast,” said Bob Day, Gov. Kathleen Sebelius’ top health care adviser.

Though the disabled and elderly make up only 30 percent of the state’s Medicaid population, Day said, they account for 58 percent of the spending.

The disabled and elderly, he said, also use the most prescription drugs.

Last year, Medicaid spending on prescription drugs increased 19.9 percent.

Also in the past year, more than 10,000 children were added to the state’s Medicaid rolls, usually because one or both parents lost their jobs or couldn’t work.

“We see many, many families in which neither parent has a full-time job, but they’ve managed to string together two, three or four part-time jobs,” said Nancy Jorn, director of maternal and child health field services at the Lawrence-Douglas County Health Department. “So they’re working, but they’re still poor and none of their jobs offer health insurance; so to gain access to prenatal care, they turn to Medicaid.”

Medicaid pays for one-third of the state’s births, records show.

Still, Day said, caring for children and pregnant women is cheap compared with the elderly and disabled.

“Kids, on average, cost (Medicaid) between $60 and $70 per month. So when you take on an additional 10,000 kids, there’s significant cost,” Day said. “But the aged-disabled, on average, cost between $5,000 and $8,000 annually. If you add a thousand of them, the costs are about the same.”

Rough road ahead

Day has warned lawmakers that attempts to rein in Medicaid costs will prove excruciatingly difficult.

“First of all, we’re not a generous state. We don’t pay providers as much as we should; our single-adult (Medicaid) eligibility is on par with Mississippi, Alabama and Texas,” he said.

“When push comes to shove on this, a lot of people’s moral values are going to be challenged because, really, what we’re talking about here is kids, the elderly and the disabled,” Day said. “Those aren’t easy choices.”

In recent weeks, Day and Andy Allison, director of health care finance and organization at the Kansas Health Institute, have been advising legislators to look for ways to make the system more efficient rather than cutting costs and raising eligibility.

“Basically, you’re looking at an increasingly limited resource going up against needs and demands that are virtually unlimited,” Allison said. “There are no magic bullets for this.”