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December 8, 2015 - Kim Moore [see other posts]

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KanCare Expansion - Right on the Money

It's time to do the right thing and open KanCare to our working poor in Kansas.

Today I joined with leaders of the state's other five health foundations in delivering an open letter calling on Governor Brownback and members of the Kansas Legislature to engage in serious consideration and open debate about expansion of KanCare, in light of new research showing potential savings for the Kansas budget.

"The potential benefit to the state budget alone indicates that legislators can no longer afford to simply say 'no' to KanCare expansion. We call upon legislators to give KanCare expansion serious consideration and an open debate, allowing diverse opinions a chance to be heard in committee and on chamber floors," reads the letter signed by the six foundations comprising Kansas Grantmakers in Health (KGIH), an informal group sharing a commitment to improving the health of Kansans.

The letter cited a new analysis by Manatt Health Solutions commissioned by KGIH which found with KanCare expansion and the favorable federal funding match offered, Kansas could expect to save much of what it currently spends for providing critical services to the uninsured, including up to:

  • $75.3 million that Kansas spends annually for mental and behavioral health care.
  • $28.9 million that Kansas spends each year to reimburse hospitals and clinics for uncompensated care they provide.
  • $9.3 million that Kansas spends annually for medical services to prison inmates.
  • $4.1 million that Kansas spends each year for the MediKan program.

The most common argument we hear from state government circles is that Kansas, mired in a deep budget crisis, can't afford the cost. However, in light of the results of the Manett analysis, the potential benefit to the state budget alone (not to mention to our fellow Kansans who would gain health coverage) merits serious consideration of KanCare expansion. "Kansas' severe and growing budget crisis recently prompted legislators to pay a consultant $2.6 million in hopes of finding more savings and efficiencies. Yet for two years, Kansas has ignored a policy decision that could be saving the state millions of dollars right now, while providing more than 150,000 uninsured Kansans health coverage: KanCare expansion," the letter continues. The full text of the letter, along with the related news release, is available here.

The key finding of the Manatt analysis is as follows:

"The cost of KanCare expansion in Kansas is projected to average just over $50 million annually between 2016 and 2020. Based on publicly available data and the experiences of states that expanded in 2014, it appears that Kansas should be able to generate sufficient savings and revenue gains to cover the costs of expansion during this time period - in other words, expansion should be budget neutral. Expansion, in fact, may generate savings and new revenue in excess of the costs of expansion[emphasis added]."

The report adds that for states which have expanded their coverage, the experience has been a win-win. Expansion saves state budget money, injects millions of new funds into state economies, and provides health coverage to thousands of citizens - raising not only quality of life but productivity as well.

More than 150,000 Kansans would benefit from KanCare expansion, and more than three-quarters of these Kansans work at least one job or are in families which do. They are the working poor, working jobs that don't offer health insurance or that pay too little to make insurance affordable.

Currently, a family of four earning $8,003 per year would make too much for the parents to be eligible for coverage through KanCare, but that income level is obviously far too little for the family to afford private health insurance on its own.

Kansas has already given up more than $850 million (and counting) in federal funds by refusing to consider KanCare expansion. Our economy and our state budget could sorely use those funds right now. Continuing down the current path of "NO" will cost the state $8.6 billion over the next ten years, according to the state's own Division of the Budget.

Just to be clear - if Kansas were to expand KanCare, the federal government would in 2016 fund 100% of the expansion costs. In 2017, the federal share decreases to 95% with the state picking up the remaining 5%. The balance between the state and federal share of costs shifts gradually, topping out at 90% federal / 10% state contribution by 2020 and continuing at that balance going forward. These are new federal funds ready to flow into our state's economy. If we had expanded in 2014, we would have enjoyed two years of 100% federal funding share by now. Our refusal to participate in expansion has not lowered our federal taxes. Expanding KanCare would bring federal tax dollars paid by Kansans back to Kansas.

But let's not forget: what really matters here is the people. KanCare expansion will extend much-needed health care coverage to more than 150,000 Kansans who don't have it today. And as the research shows, KanCare expansion should be budget neutral - and would likely generate additional savings and revenue. Why wouldn't we take advantage of that opportunity? You might say it's a solution that's right on the money.

If you care about helping your fellow Kansans, or even if you would just like to see real consideration given to policy that could help improve Kansas' bottom line, please take a few moments to read the open letter, read the Manett analysis, and decide for yourself if this is something you'd be willing to ask your legislators to explore seriously.