(Updated with more reporting, including comments from Democratic and Republican legislators and data show increasing insurance rates on the exchanges. Also contains link to the bill and an analysis showing how the new bill compares to the House bill)
Democratic Gov. Laura Kelly and Senate Majority Leader Jim Denning set aside their differences Thursday as they introduced a Medicaid expansion plan aimed at attracting bipartisan support.
Kelly and Denning announced the legislation after meeting quietly behind the scenes for most of December as they tried to break the gridlock that has stalled Medicaid expansion for several years.
They had been at loggerheads in recent months, especially with Denning’s refusal to consider Medicaid on the Senate floor last year until education funding was resolved in the courts.
Their new plan potentially opens daylight for Kansas to become the 37th state to expand Medicaid as lawmakers prepare to start their 2020 legislative session.
“I want to make it clear we’re not here to declare victory,” Kelly said in announcing the deal to several hundred people at a news conference held in the Capitol rotunda.
“While this announcement does not automatically translate into a bill signing, I am more optimistic than ever that Kansas will reach that point and we will do so in 2020,” she said.
Kelly readily acknowledged the rocky relationship she’s had with Denning over Medicaid expansion.
“Sen. Denning and I did not end the 2019 legislative session on particularly friendly terms,” she said with a few chuckles overhead from the crowd gathered for the news conference.
“We kept at it, kept talking and the result is the proposal before you today,” she said.
Medicaid expansion is expected to dominate the legislative agenda in the first weeks of the session with the goal of passing a bill quickly and moving onto other issues.
The bill has 22 sponsors in the Senate, one more than the required 21 needed for passage.
“This is what governing looks like,” Denning said. “It’s hard, it’s lot easier to get ‘no’ than it is to get to ‘yes.’ Many, many Democrats and Republicans helped us put this bill together to get to ‘yes.'”
While mostly Democratic lawmakers attended the news conference, several Republicans were interspersed in the crowd behind the governor, including Senate Vice President Jeff Longbine and Republicans Sens. Randall Hardy, Ed Berger and John Doll.
However Senate President Susan Wagle, who is now running for the U.S. Senate, criticized the plan. She said “socialized government-run healthcare is not the answer for Kansans.”
The plan announced Thursday is much more expansive than the plan approved by the House last year, but idled in the Senate.
Here’s a look at a legislative analysis of how the two plans compare.
While the new plan is centrally focused on expanding Medicaid, it also includes a number of provisions intended to stabilize rural health care and provide more access to treating mental health.
Kelly and Denning settled on a plan that would expand Medicaid to 138% of the federal poverty level with the possibility of later ratcheting back to 100% if the state can show the federal government that expansion is revenue neutral.
At that point, Medicaid beneficiaries earning over 100% of the federal poverty level would be transitioned back to the exchanges.
The plan calls for expanding Medicaid by Jan. 1, 2021.
They also agreed on a reinsurance program that’s aimed at reducing health insurance premiums on the exchanges by offsetting the costs of large medical claims with payments to health insurers.
Twelve states have adopted reinsurance programs since 2016, including Wisconsin, Montana, Minnesota and Colorado.
One health care consultant that analyzed seven states with reinsurance programs found premiums in the individual marketplaces were about 20% lower on average in the first year of the program.
Data compiled by the Kansas Health Institute show skyrocketing premiums on the exchanges in Kansas in recent years.
The average monthly premium for a single adult who is 27 years old on the silver benchmark plan has soared to about $425 a month in 2020 from about $193 a month in 2015.
The average monthly insurance premium for a family of two 40-year-old parents with two children has escalated to about $1,660 this year from about $705 in 2015.
Meanwhile, KHI reports that out-of-pocket expenses continue to increase as well.
For instance, a family of four with an annual income just above 250 percent of the federal poverty level – or $64,375 in 2019 – could pay up to $16,300 in out-of-pocket expenses in addition to their premiums, according to KHI.
The new plan sets Jan. 1, 2022, as the date for implementing the reinsurance component of the legislation.
The compromise bill does not include a tax on tobacco or vaping products, although it will require hospitals to pay a $35 million surcharge each year.
The new plan sets a $25-a-month premium for individuals, not to exceed $100 per family.
The bill provides for the state to grant exemptions in cases of hardship.
The premium would not apply to anyone who’s at 100% of the federal poverty level or less.
The compromise bill does not lock out beneficiaries who fail to pay their premiums.
However, the state would collect unpaid premiums — through garnishing wages, for example — from anyone 60 days late or more in making their monthly payments.
The bill would shut down expansion if the federal reimbursement for the program falls below 90%.
Expansion would be terminated over a 12-month period with no new enrollments from the time it falls below 90%.
The plan also would include a component encouraging Medicaid beneficiaries to work, but it is not a mandate like the ones being challenged in Arkansas, Kentucky and New Hampshire.
Able-bodied Medicaid beneficiaries will be asked if they work when they sign up for Medicaid.
The questionnaire also would ask unemployed beneficiaries what’s preventing them from working.
The information will be forwarded to the Commerce Department, which will connect beneficiaries to jobs or provide them the resources to get a job.
Completing the questionnaire would be part of the eligibility process. There would be no penalty for not taking a job.
The new plan calls for the state to develop alternative ways to improve the financial stability of rural health care.
The state would launch a pilot program asking the federal government to approve a higher federal reimbursement rate for rural health care services more tailored to community needs.
Currently, rural hospitals qualify for a higher federal reimbursement rate if they have at least 25 beds and an emergency room, even if they might not have that many patients.
The new plan would ask the federal government to approve a higher reimbursement rate even if those hospitals provided scaled-down services more suited for a community’s needs with less overhead.
Also, the plan calls for the state to ask the federal government to approve expanded Medicaid coverage for mental health services.
The state would ask to be exempted from a federal regulation that prohibits using Medicaid to cover mental health treatment in psychiatric institutions and treatment facilities larger than 16 beds.
Last year, Alex Azar, the secretary for the U.S. Department of Health and Human Services, announced that the agency wanted to be more flexible with the law.
The law had been intended to keep states from using federal money to “warehouse” people in facilities.
But in recent years, state officials and social welfare advocates had been urging the federal government to reverse the policy.
In November, Modern Healthcare reported that Washington, D.C., became the first Medicaid program in the country to be approved for using Medicaid funds to treat patients for mental health issues in large facilities.
It was hoped that the Washington, D.C., approval would prompt more states to seek exemptions from the law.
Experts have said that Medicaid funding could ease the financial burdens on states providing mental health treatment in medical facilities.
House Majority Leader Dan Hawkins, an ardent opponent of expansion, said he thought there was little that could be done to stop the legislation in the House.
He noted that Medicaid expansion had 70 votes last year and would likely approach that again. He would said he would reserve judgment until the Senate debates the bill.
Denning wasn’t without critics on both sides of the aisle, including his Democratic rival in this fall’s upcoming election.
State Rep. Cindy Holscher took a not-so-subtle swipe at Denning for opposing Medicaid expansion last year.
“For close to seven years, a number of people – voters, healthcare advocates and legislators like myself who favor Medicaid Expansion – have worked to forward this important program,” she said in email statement sent out after the announcement.
“It is great to see individuals who have worked to prevent expansion throughout that time frame now coming to the table on this topic.”
Regardless of the outcome of that race, University of Kansas political scientist Burdette Loomis said the Medicaid legislation and the 2017 tax bill could write Denning into the Kansas history books.
“Regardless of any future legislative or political developments for him, with his work on 2017 tax bill (and assuming its passage), the 2020 Medicaid expansion, @jimdenning4KS will go down historically important KS state senator,” Loomis tweeted.
Outgoing state Sen. Mary Pilcher-Cook didn’t see Denning’s support for expansion as an act of courage.
“Signing onto a bill with someone from the opposite party is not ‘leadership’ when the bill hurts Kansas citizens, increasing the cost of health care and increasing taxes on Kansans,” she said in a statement.
Republican state Sen. Ty Masterson shared a similar view.
“If the Senate ‘Majority’ Leader was Patrick Mahomes, he just threw a ‘pick six’ to the opposing team and then celebrated with them in the end zone,” said Masterson, chair of Truth Caucus.
“Laura Kelly and her allies wish to grow government and expand the welfare state at all costs,” he said. “Healthcare access is important to all of us, but this is not the answer.
