Sebelius says Kansas needs to act quickly to expand Medicaid

Former Health and Human Services Secretary and former Gov. Kathleen Sebelius speaks with reporters Monday about the future of the Affordable Care Act. Sebelius was in Topeka to watch the swearing-in of Kansas Supreme Court justices and Court of Appeals judges who were retained in the 2016 elections.

? Former Kansas Gov. Kathleen Sebelius said Monday that Kansas lawmakers will have to act quickly if they hope to expand Medicaid under the Affordable Care Act before Republicans in Congress and the Trump administration dismantle the program.

Sebelius, who served as U.S. Health and Human Services Secretary during President Barack Obama’s first term, was one of the architects of the health care law popularly known as Obamacare.

She was in Topeka Monday to attend swearing-in ceremonies for the Kansas Supreme Court and Kansas Court of Appeals, and during an interview with the Lawrence Journal-World, she was asked whether Kansas had already waited too long to take advantage of the law.

“It’s hard to tell until we know exactly what Congress is proposing, and over what sort of period of time,” Sebelius said. “Right now as we speak, the new North Carolina governor (Democrat Roy Cooper) is moving to expand Medicaid. So theoretically if they wanted to move quickly and get it to this current HHS, it’s likely to be approved. What happens after the new administration is seated and what exactly Congress does, it’s really difficult to tell.”

Republicans in Congress have voted more than 60 times to repeal all or part of the Affordable Care Act, but those efforts were largely blocked by the Obama administration.

This year, however, they still have majorities in both chambers of Congress, but with a new president about to take office Jan. 20 — Republican Donald Trump, who has vowed to repeal all or most of the law.

The idea behind Obamacare was to extend health insurance to virtually all Americans, first by requiring most individuals to have a basic level of coverage, and requiring large employers to offer it to their workers, then by extending coverage to low- and moderate-income people either through Medicaid or through subsidized private insurance policies sold on web-based exchange markets.

The Medicaid expansion would have extended free or low-cost coverage to individuals and families with incomes below 138 percent of the poverty level, or $27,821 in 2016 for a family of three. In Kansas, expansion would have provided coverage to an estimated 141,000 people who are currently uninsured and not eligible for Medicaid.

Under the ACA, the federal government pays 90-95 percent of the cost of adding those newly eligible individuals to the Medicaid rolls.

Expanding Medicaid was originally a requirement under the federal law, but the U.S. Supreme Court later said that was an overreach of federal authority, and it ruled that Congress could only make expansion optional. Since then, Republican Gov. Sam Brownback and the GOP-dominated Legislature have refused to consider it.

But the 2016 elections also produced big changes in the Kansas Legislature, with Democrats and moderate Republicans making big gains in both the House and Senate, and many campaigned on the idea that they wanted to take advantage of Medicaid expansion.

Senate Vice President Jim Denning, R-Overland Park, said the issue will likely be debated this year, although no one yet knows what will be possible in the new Trump administration.

“A lot of folks want to expand Medicaid. I don’t see any reason why they can’t have hearings, and if it passes, that’s the will of the body,” Denning said. “But nobody’s going to know what the end product is until the new Trump administration tells us.”

Since the election, Trump has softened his tone about the Affordable Care Act, suggesting he wants to keep some of its more popular provisions, such as prohibiting insurance companies from denying coverage due to pre-existing conditions, eliminating lifetime caps on policy benefits, and allowing parents to keep their children on their family policies until age 26.

But one of the provisions that Trump and many Republicans say they object to most is the individual mandate. Sebelius, however, said it’s not possible to have the popular provisions without the mandate.

“I think that is very likely to produce what in insurance geek-world is called a death spiral, where you have older, sicker patients staying in the market and younger, healthier patients immediately leaving the market,” Sebelius said.

“Evidence proves pretty definitively that without everybody participating, it’s financially catastrophic to say to insurance companies, you have to write coverage for everybody who wants it, because the people who want it and need it are likely to be seriously ill and older than people who just say ‘I’ll take my chances,'” she said.

One group that is watching closely to what happens both in Washington and Topeka is Kansas hospitals. That’s because one of the ways Obamacare is financed is through reduced Medicare payments to hospitals that previously treated large numbers of uninsured patients, known as “disproportionate share” hospitals.

The Kansas Hospital Association has said it intends to continue lobbying for Medicaid expansion in the Legislature, even as it watches what unfolds in Washington.

The idea was that as the number of uninsured patients went down, so too would the cost that those hospitals bear to provide charity or uncompensated care to people without insurance.

But in states like Kansas that did not expand Medicaid, those hospitals only lost the Medicare payments. They did not see a significant drop in the number of uninsured patients coming through the door.

“I don’t think there’s any question that in states where Medicaid expansion has occurred, hospitals have begun to recoup what was years and years of uncompensated care, and are finding themselves in more solvent positions as more customers come through the doors with the ability to pay for the services they are receiving,” Sebelius said.

GOP leaders in Congress have said they hope to take the first step toward repealing Obamacare as early as this week. Trump and his team officially take control of the White House on Friday, Jan. 20.