In 2000, state welfare officials spent $608 million on health care for the poor.

Before this year ends, they’ll spend more than $1.3 billion. That’s a whopping 121 percent increase in five years.

“We cannot sustain that kind of growth,” said Rep. Brenda Landwehr, a Wichita Republican and chairwoman of the House subcommittee charged with assembling the budget for the state’s Department of Social and Rehabilitation Services.

“We’re going to have to find a way to bring it under control,” she said.

But a key part of Gov. Kathleen Sebelius’ health care reform initiative, the centerpiece of her agenda this year, calls for expanding the state’s Medicaid rolls to include more children and needy adults.

Such an expansion, Sebelius says, would reduce the number of uninsured and slow increases in health care costs.

“What the governor is saying is that it’s pretty clear the federal government isn’t going to address the issues of the uninsured and the drain they put on the system,” said Scott Bruner, director of medical policy at SRS.

“So it’s being left up to the states to reduce the number of uninsured,” he said. “One way to do that is by covering them through Medicaid.”

That option is attractive to the Sebelius administration because the federal government picks up 60 percent of the Medicaid tab. The state covers the remaining 40 percent.

If states allow the numbers of uninsured to increase, Bruner said, health care costs would increase even more than they are now.

“It’ll be cheaper in the long run,” he said.

Up against Bush

But the Sebelius plan could run headlong into a brick wall because it is at odds with moves being taken by the Republican Bush administration in Washington, D.C.

Bush has promised to cut the nation’s deficit by half in five years, and most observers agree there’s no way he can do that without a cap on Medicaid spending.

With expenditures exceeding $300 billion a year, Medicaid spending now surpasses Medicare. Some states — not Kansas — now spend more on Medicaid than on elementary and secondary education.

Federal officials are weighing several measures meant to curb Medicaid spending. Among them:

l Restricting access to prescription drugs.

l Imposing or increasing co-payments for goods and services.

l Varying rates paid for goods and services provided in different parts of the state.

l Tightening eligibility.

l Switching to a block-grant system that would limit states’ access to federal funds.

Nationally, Medicaid spending across the nation has increased 63 percent in the past five years.

In Kansas, Bruner said, most of the increase has been driven by soaring prescription drug costs, more families and senior citizens falling into poverty or near-poverty, and a recent increase in rates paid to hospitals, doctors, dentists and pharmacists.

Bruner said neither SRS nor Gov. Kathleen Sebelius are backing any of the federal cost-cutting initiatives. Instead, they’ve proposed increases in Medicaid eligibility.

In her State of the State address last week, Sebelius vowed to oppose any federal efforts to limit Medicaid spending.

“This is a huge issue,” said Gene Meyer, president and CEO of Lawrence Memorial Hospital.

“We’re expecting dramatic cuts in both Medicaid and Medicare expenditures sometime before the end of President Bush’s term,” Meyer said. “And people need to know that when that happens either our ability to provide services will be significantly curtailed or our costs will significantly increase. There’s no way around it.”

Some hospitals, Meyer said, will likely be forced out of business.

“When 60 to 65 percent of the nation’s hospitals are breaking even or losing money, you can’t cut Medicare and Medicaid without affecting the infrastructure of health care,” he said.

Meyer said Medicare and Medicaid account for 55 and 8 percent of LMH revenues, respectively.

Caught in the middle

Kansas legislators find themselves caught between a governor who wants to expand Medicaid and a president who wants to shrink it.

“I don’t know what we’re going to do,” said state Sen. Dwayne Umbarger, a Thayer Republican and chairman of the Senate Ways and Means Committee. “We’ve got our umbrella extended out pretty far, but that’s because there are a lot of people out there who want it that way.”

He added, “I think we’ve got to do something, but I also know that once you promise people something it’s awful hard to take it back.”