Medicaid expansion would cover thousands in Douglas County

Thousands of Douglas County residents will continue to go without health insurance once the Affordable Care Act goes into effect next year unless Kansas decides to expand Medicaid as called for in the law.

One of the ways “Obamacare” hoped to get America closer to a goal of universal health coverage was by easing the eligibility requirements for Medicaid. But after the U.S. Supreme Court ruled that the federal government couldn’t force states to do so, 20 of them — all of but two of which, including Kansas, have Republican governors — have so far opted not to loosen the requirements; another eight are still weighing their options.

Opponents in Kansas, including Gov. Sam Brownback, say they don’t trust the federal government to follow through on its commitments and that the costs of the program would take away from spending on core services like education.

In Douglas County alone, it’s estimated that the measure could increase coverage to as many as 11,400 of the 16,000 residents who currently don’t have insurance.

“Without the ability to expand Medicaid, that’s going to continue the plight of the uninsured in Douglas County and around the state,” said Lawrence Memorial Hospital CEO Gene Meyer, who estimated that without the expansion as many as 8,000 people in the county will continue to go without coverage.

The broadening of Medicaid would cover practically the entire patient population at Lawrence’s Heartland Community Health Center, enabling the clinic to handle significantly more than the 12,000 to 14,000 visits a year it has the capacity for now. Until then, the practice will, through measures like cost-shifting, continue to pick up the tab for about half of its patients.

Medicaid expansion also would extend coverage to many of the clients at Health Care Access, which treats uninsured Douglas County residents making up to 158 percent of the federal poverty level.

Hospitals in trouble

To help pay for the expanded coverage, the Affordable Care Act reduces Medicare reimbursement to hospitals, on the theory that they would make up the difference from the additional Medicaid patients. But in states that have opted not to expand eligibility, hospitals are going to have to endure significant cuts.

Lawrence Memorial Hospital expects to lose between $2.2 and $4 million in Medicare reimbursements in 2014 without getting any extra Medicaid patients. That’s on top of a $750,000 reduction in federal funding this year due to sequestration cuts. Meyer said the hospital has yet to begin its budgeting process for next year but is confident it can sustain the reductions without resorting to drastic measures such as layoffs.

About 40 percent of the budget at Bert Nash Community Mental Health Center in Lawrence comes from Medicaid. But in the past five-plus years the state has cut the facility’s funding significantly, causing it to reduce staff and programs.

“I believe that expanding Medicaid would mean more for Douglas County than virtually any other county in the state,” CEO David Johnson said, pointing to its higher-than-average poverty rate coupled with the small number of residents who are eligible for Medicaid. “For us, it would be a big deal — we provide services to people regardless of their ability to pay.”

Strict eligibility

As it stands, Kansas has some of the strictest eligibility Medicaid requirements in the nation. To qualify, you can’t earn more than 32 percent of the federal poverty level ($3,677) or have assets worth more than $2,000. Nondisabled childless adults aren’t eligible for the program under any circumstances.

The Affordable Care Act opens up eligibility to all people within 138 percent of the federal poverty level, or $18,154. The law’s online health care exchanges, meanwhile, provide subsidized premiums to Americans who make between 100 and 400 percent of the federal poverty level ($11,490 to $45,960).

But If Kansas doesn’t expand Medicaid, residents whose incomes fall within that 32-to-100-percent range would get nothing. That means a Kansan who earns $45,000 a year would receive government assistance to purchase health insurance while a childless adult making $4,000 would not. On top of that, the law mandates that all Americans have some type of coverage or they will face a tax penalty.

The opposition to the expansion isn’t strictly along party lines. State Rep. Tom Sloan, R-Lawrence, believes Kansas should accept the federal money on the table, estimated at roughly $400 million a year, with Washington covering 100 percent of the costs from 2014 through 2016 before winding down to a 90/10 split by 2020.

Michael Fox, a professor of health policy and management at Kansas University, believes it’s only a matter of time before the holdout states decide to participate, as many are feeling pressured to by their hospital industries and business communities.

“If they follow their fiscal conservatism rather than their strict political ideology I think what they will see will be an enormous financial advantage to Medicaid expansion,” he said. “Medicaid has shown to be a very cost-effective and efficient program.”