Legislators wary of commenting on study that says Medicaid expansion will pay for itself by creating jobs and tax revenue

By Al Cross
Kentucky Health News

Kentucky legislators reflected mainly partisan attitudes about the state's implementation of federal health reform in a statewide call-in interview show about the state budget Monday night, but were generally cautious in discussing the financial impact of reform.

The lawmakers on KET's "Kentucky Tonight" were Sens. Chris McDaniel, R-Union, and Robin Webb, D-Grayson; and Reps. Rick Rand, D-Bedford, and Steven Rudy, D-West Paducah. Rand and McDaniel chair the budget-writing committees in the House and Senate.

Kentucky Health News asked the legislators if they thought the predictions of the study that says the state's Medicaid expansion of Medicaid eligibility will pay for itself through 2020 – by expanding health-care jobs and raising income-tax revenue – will be proven accurate.

McDaniel, answering first, noted that the expansion enrolled many more people than expected and their benefits would cost the state about $250 million in the next two-year budget, beginning in July 2016. He did not comment on the state-financed study by Deloitte Consulting LLC, which Republican gubernatorial nominee Matt Bevin has called "nonsense."

Rand replied, "We're talking about real people and real people's health," and noted that the expansion has saved the state money in several ways, such as largely eliminating the state appropriation for charity care at the University of Louisville Hospital. He said "Kentucky is one of the unhealthiest states in the United States," and told the story of a constituent who had never had health insurance but was able to get Medicaid treatment for a serious health episode.

"I think the Medicaid expansion is working" and is "creating jobs and reducing costs," Rand said, but also did not comment on the study.

Later in the discussion, Webb said, "I am concerned any the cost, the potential cost, because the numbers have been very elusive." She also said that expanded Medicaid treatment for the mentally ill and substance abusers was "much needed."

McDaniel steered the discussion away from Medicaid to health reform in general, noting that many people with private insurance are paying higher deductibles and "There has been mixed reviews at best about all that's going on."

Asked by host Bill Goodman how will it turn out in Kentucky, McDaniel said that would depend largely on what happens in the election for governor on Nov 3.

Bevin first said he would abolish the expansion, but recently said he would cut costs by making it more like expansions in some other states such as Indiana, where Medicaid clients can pay premiums to get better coverage and get some of their money back if they don't use the benefits. Conway has said the state must find a way to pay for the expansion, while reserving the right to cut back on it.

McDaniel then jumped to a separate subject, the Kynect insurance exchange where Kentuckians with incomes under 138 percent of the federal poverty level can sign up for free Medicaid and others can get private insurance that is subsidized by the federal government.

Bevin has called for abolishing Kynect and moving Kentuckians to the federal exchange. Critics of that idea note that the federal exchange charges a 3 percent fee on policies while Kynect charges 1 percent, but McDaniel said the latter fee is paid by all Kentucky policyholders, even those who don't use Kynect, so those people would pay less. Subsidized insurance through Kynect is available based on income; a family of four can make $95,400 a year and still get a small subsidy

Rand replied, "I think Kynect by any stretch has been a tremendous success. . . . You're probably talking about people who are working, We need to keep Kynect. It's an important part of making a healthier Kentucky."

Rudy, raising yet another subject, said lawmakers "need to look at how providers are being compensated" by managed-care companies that oversee Medicaid clients. He said the closure of the Fulton hospital, in his district, was partly a result of managed-care payment issues.

Rand noted that Gov. Steve Beshear rebid the managed-care contracts to resolve such problems problems, and said "One hospital in my district is in black earlier in the year than ever." He and Webb noted that hospitals have fewer bad debts to write off because more patients have coverage.