The Richmond Register

Local News

May 9, 2013

Gov. Beshear expands Medicaid via Obamacare

Local family cited as example of beneficiaries

FRANKFORT — Gov. Steve Beshear on Thursday announced Kentucky will go along with an expansion of Medicaid to deliver health care coverage to 308,000 currently uninsured citizens through provisions of the Affordable Care Act or Obamacare as it’s sometimes called.

Jana Bailey, 35, a part-time employee of the YMCA in Richmond and mother of four young children, is thrilled.

Her husband, Stephen, 37, has health insurance through his job as associate director at the same YMCA, and their four children are covered by KCHIP (Kentucky Children’s Health Insurance Program), but they can’t afford insurance for her.

“Because I work part-time, I don’t qualify for Medicaid, and with our financial situation I can’t afford health care coverage for myself,” Bailey said during Beshear’s news conference. “This expansion will allow me less stress to concentrate on my family knowing there will be health care available.”

Beshear said the case for expanding Medicaid is “overwhelming. This is both the single biggest decision affecting the collective health of Kentuckians in our lifetime and it was also one of the easiest.”

Beshear displayed charts which indicate Kentucky will see a net positive gain for the state budget of $802.4 million over eight years even after accounting for $473 million in various costs associated with implementation.

State Sen. Julie Denton, R-Louisville, is skeptical, however. Denton chairs the Senate Health and Welfare Committee and sponsored legislation in the 2013 General Assembly to require legislative approval for the expansion. (It passed the Republican-controlled Senate but died in the Democratic-controlled House.)

“I hope it works,” Denton said. “But the economic impact — even if his numbers are right — will take time to play out, but the administrative costs will be up front. Where are those dollars going to come from?”

Under the Affordable Care Act those who are uninsured but with incomes up to 138 percent of the federal poverty level would be enrolled in Medicaid. After passage of the law, the U.S. Supreme Court ruled states couldn’t be compelled to expand Medicaid. So far, counting Kentucky, 21 states have done so.

The federal government will pay 100 percent of the costs for the first three years. Beginning in 2017, costs for the state will kick in over three years until it reaches a maximum of 10 percent in 2020.

The federal government currently picks up 70 percent of Kentucky’s Medicaid costs while the state kicks in 30 percent.

Denton and other critics worry the federal government might in the future reduce its contribution, leaving states with difficult choices.

Beshear said Kentucky is free to withdraw from the expansion if that happens. Denton, however, said the state would have to choose between “taxing the heck out of people or dropping people like flies from the rolls.”

Beshear said the case for expansion is clear and was developed by independent analysis by the University of Louisville and Price Waterhouse Coopers.

“Their findings provide an absolutely overwhelming case for taking this step,” Beshear said.

Critics also have questioned Beshear’s authority to make the decision without legislative approval. Beshear said Medicaid eligibility is determined by the Cabinet for Health and Human Services and set forth in the state health plan. That plan is adopted as an administrative regulation which is implemented by the executive branch.

After Beshear’s announcement Thursday, Senate President Robert Stivers, R-Manchester, said the Senate made clear its belief the move required legislative approval when it passed Denton’s bill.

“I continue to believe this should not be a unilateral decision by the executive branch,” Stivers said

Meanwhile, House Speaker Greg Stumbo, D-Prestonsburg said, “Taking this step is not only the right thing to do, it makes economic sense.”

Beshear said the move will produce a $15.6 billion economic benefit through increased employment of almost 17,000 new jobs and save hospitals money and businesses between $32 million to $48 million in new taxes and penalties if they don’t provide their employees health insurance.

In addition to the 308,000 who will now be eligible for Medicaid, the creation of online health benefit exchanges where people can shop for health insurance will allow another 276,000 Kentuckians to receive subsidies to help buy insurance.

It will offset revenue losses for hospitals who will no longer receive Disproportionate Share Hospital (DSH) payments for indigent care because the federal law assumes those patients will now be covered by Medicaid. The payments will end regardless of a state’s decision on Medicaid, and Beshear said most hospitals support expansion.

Bart Logsdon, marketing liaison for T.J. Samson Hospital in Glasgow, agreed.

“We’re already treating those (indigent) patients,” Logsdon said. “We’re just not getting paid for it,”

Sarah Nicholson of the Kentucky Hospital Association said most Kentucky hospitals support the expansion but are very concerned about late payments by the Managed Care Organizations under Kentucky’s managed-care delivery of Medicaid. The problem could increase with more patients covered by Medicaid.

Beshear said the state is working with providers and the MCOs to resolve those problems to ensure they don’t continue.

Beshear’s decision was applauded by several advocacy groups including Kentucky Youth Advocates (KYA), AARP and mental health advocacy groups.

Terry Brooks of KYA said the decision is “a win for adults, a win for their kids and a win for the state budget.”

For those who say the expansion means Kentucky supports Obamacare, Beshear said: “Well, to them I say get over it. The Affordable Care Act was approved by Congress, sanctioned by the United States Supreme Court and is the law of the land.

“This move makes sense not only for our health but also for our pocketbook,” Beshear said. “But the bottom line is this: it’s the right thing to do.”

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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