At Kansas governor’s council meeting, health policy expert outlines economic benefits of Medicaid expansion

Diane Rowland, executive vice president emerita of the Kaiser Family Foundation, gave a presentation at the third meeting of the Governor’s Council on Medicaid Expansion on Dec. 12, 2019.

TOPEKA — Of the 36 states that have expanded Medicaid coverage, most have seen favorable economic effects, according to a health policy expert.

Diane Rowland, executive vice president emerita of the Kaiser Family Foundation, gave a brief presentation Thursday at the third meeting of the Kansas Governor’s Council on Medicaid Expansion.

Medicaid expansion refers to a provision in the Affordable Care Act that allows states to expand Medicaid eligibility to uninsured people whose incomes are at or below 138% of the federal poverty level. Kansas lawmakers have so far resisted the expansion. In March 2017, then-Gov. Sam Brownback vetoed a bill that would have expanded Medicaid, but lawmakers failed to override the veto.

Prior to the Dec. 12 meeting, the council had seen presentations on the effects of Medicaid expansion in Montana, Ohio and Michigan, which Hemi Tewarson, director of the National Governors Association Health Division, summarized again for the council on Thursday. The effects seen in these three states included reported improvements in health for enrollees, increased tax revenue and the creation of new jobs.

In Michigan, for example, Medicaid expansion increased tax revenue by $145 million and resulted in the creation of 39,000 new jobs. Personal income for new enrollees increased by an estimated $2.2 billion.

In Ohio, more than a third of enrollees quit smoking and gave Medicaid credit for that.

In Montana, where Medicaid expansion covers a ninth of the population, expansion has fueled 9,715 new jobs and $30.5 million in new state tax revenue.

Rowland said the findings of these three states were consistent with the other 33 states and Washington, D.C., all of which have expanded Medicaid. This is based on an August report from the Kaiser Family Foundation, which compiled results from 324 studies of the impact of state Medicaid expansion.

“These statistics you just heard from Hemi are not unique to the three states she heard from but in fact are the common experience of most of the states that have embraced expansion,” Rowland said.

According to the report, multiple studies showed Medicaid expansion offset state costs in other areas such as behavioral health services and the criminal justice system.

Rowland also noted that some states made the mistake of initially directing outreach to metro areas and did not put enough of a concerted effort in rural zones. She highlighted that Medicaid expansion would help support not only the people but also the providers in rural areas, as well as help boost rural economies.

One of the reasons states are hesitant to expand coverage is budgeting concerns, Rowland said.

“One of the arguments we heard over and over was that Medicaid expansion was going to bankrupt states,” she said.

Earlier this year, top Republican senators blocked a Medicaid expansion plan favored by Gov. Laura Kelly, noting that it would prove too costly to the state and that lawmakers needed to spend more time hammering out the details.

During her election campaign, Kelly promised she would expand Medicaid coverage.

According to a March study from the Kansas Health Institute, the total cost of new enrollees over 10 years would be $1.2 billion in state funds, offset to $520.8 million after estimating new revenues from the expansion. The cost for the first full year is estimated to be $47.4 million.

Rowland said states have been able to find ways to hedge concerns by adjusting their budgets.

In October, a Republican-dominated Senate committee endorsed an expansion proposal by Senate Majority Leader Jim Denning.

Denning’s proposal, which would offer coverage to an estimated 150,000 Kansans, would offset debt by raising tobacco and vaping taxes by $50 million, adding a $31 million surcharge on hospitals and $63 million in fees for managed-care organizations serving Medicaid clients.

Denning’s proposal, however, has no work requirement, which some Republicans see as crucial. Medicaid participants would not have to be employed or undergo job training.

Some have criticized Denning’s plan as being too complicated.

In a statement released earlier that same week, Kelly said that lawmakers must create a “simple, effective and sustainable” plan for Kansas.

“Simply expanding the Medicaid-eligible population to include adults who make up to $16,753 per year is the best path forward,” she wrote.

On Thursday, Rowland also recommended a straightforward expansion.

“What you see is the states that went forward with the most straightforward expansions managed to get up and off the ground very quickly and to really connect with people far sooner,” she said.

The council will deliver a final report in January. At the onset of Thursday’s meeting, Kelly asked that they develop three to five guiding principles for Medicaid expansion in Kansas. She also said she has been listening in on their meetings and that she has been “very pleased with how these discussions have unfolded.”


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