Policy Documents

Research & Commentary: Kansas Medicaid Expansion

February 22, 2013

As states begin implementing the federal health care law, many, such as Kansas, are still debating whether to expand their Medicaid programs in order to receive a larger federal subsidy.

If Kansas expands its Medicaid program to individuals at 100 to 138 percent of the federal poverty level, the federal government will provide 100 percent of the additional money for 2014–16, 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020 and beyond. Expansion proponents argue it would be unwise to reject this “free money,” and they say expansion will provide insurance coverage for more Kansans.

Opponents, however, note expansion will lock in even larger Medicaid costs without improving the quality of care. According to the Kansas Policy Institute, more than 13 percent of Kansas’s population already depends on the health care entitlement program, and the Kaiser Family Foundation has found expansion would increase enrollment by 42 percent by 2019. Medicaid is already the second-largest expenditure in the state budget.

In 2010, Kansas spent roughly $713 million on Medicaid, and the Kansas Health Institute anticipates expansion will cost the state an additional $519 million between 2014 and 2020. That would happen because the federal matching rate applies only to newly eligible Medicaid enrollees. Kansas residents who are already eligible but have not enrolled will be forced to do so because of the individual mandate in the federal health care law, and the state will have to bear the cost of those additional enrollees.

When considering whether to absorb these costs, Kansas also should consider the quality of the system it would be adding beneficiaries to. Manhattan Institute Senior Fellow Avik Roy notes a report from The University of Virginia found “Medicaid patients were almost twice as likely to die as those with private insurance; their hospital stays were 42% longer, and cost 26% more. Compared to those without health insurance, Medicaid patients were 13% more likely to die, stayed in the hospital for 50% longer, and cost 20% more. It is hard to see how this problem doesn’t get significantly worse when Obamacare’s expansion of Medicaid is fully phased in.”

Instead of expanding a program that already provides inferior health care, Kansans would be better off rejecting the “free money” and finding alternative ways to expand health care access.

The following documents offer additional information about Medicaid expansion.

Kansas Medicaid Statistics
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/kansas.html

The federal government’s Medicaid Web site offers insight into Kansas’s financial contributions to the health care entitlement program.

Kansas Health Reform
http://statehealthfacts.kff.org/profileind.jsp?cat=17&rgn=18

The Kaiser Family Foundation estimates how Kansas’s Medicaid enrollment would be affected by expansion.

The Effect of Federal Health Care ‘Reform’ on Kansas General Fund Medicaid Expenditures
http://heartland.org/policy-documents/effect-federal-health-care-reform-kansas-general-fund-medicaid-expenditures

The Kansas Policy Institute highlights how Medicaid expansion could affect Kansas’s economy, creating additional costs for a system that already dominates the state’s annual budget.

UVa Study: Surgical Patients on Medicaid Are 13% More Likely to Die than Those Without Insurance
http://www.avikroy.org/2010/07/uva-study-surgical-patients-on-medicaid.html

Manhattan Institute Senior Fellow Avik Roy writes about a University of Virginia report that finds it is better for your health to be uninsured than a Medicaid beneficiary.

Research & Commentary: States Should Avoid Medicaid Expansion
http://heartland.org/policy-documents/research-commentary-states-should-avoid-medicaid-expansion

Kendall Antekeier of The Heartland Institute explains the Supreme Court ruling on Medicaid expansion. “States should think twice about giving up more control of their Medicaid programs only to further expand a system that is already fiscally unsustainable,” she writes.

Ten Principles of Health Care Policy
http://heartland.org/policy-documents/ten-principles-health-care-policy

This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems.

Medicaid: To Expand or Not To Expand
http://americansforprosperity.org/legislativealerts/medicaid-to-expand-or-not-to-expand/#ixzz1zUzEWz00

Nicole Kaeding of Americans for Prosperity argues states should avoid expanding their Medicaid programs because doing so would support the flawed and expensive federal health care law, place heavy financial burdens on the state, and expand an already-broken system.

The End of Federalism: How Obamacare Will Impact States
http://www.heritage.org/research/factsheets/the-end-of-federalism-how-obamacare-will-impact-states\

This brief fact sheet from The Heritage Foundation outlines the consequences of expanding Medicaid programs to meet federal requirements.

Mario Loyola: Challenging the Constitutionality of Obamacare’s Medicaid Expansion
http://heartland.org/podcasts/2011/06/24/mario-loyola-challenging-constitutionality-obamacare%E2%80%99s-medicaid-expansion

In a podcast for Coffee & Markets, Mario Loyola describes why he and many other analysts consider the federal health care law’s Medicaid expansion to be unconstitutional.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at http://news.heartland.org/health, The Heartland Institute’s Web site at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.

If you have any questions about this issue or the Heartland Web site, contact Heartland Institute Government Relations Director John Nothdurft at jnothdurft@heartland.org or 312/377-4000.