Kansas Seeks Free-Market Health Care Reform

Published June 1, 2007

A free-market health care plan promising less government interference and no new taxes could be on the horizon in Kansas.

KanCare, created by newly elected state Rep. Jeff Colyer (R-Overland Park), is billed as an alternative to the traditional big-government, complicated plans already in existence. Colyer is a medical doctor and member of the state’s House Health and Human Services Committee.

The plan is made up of a series of bills that will take several years to pass. In March, the House passed by voice vote H.R. 6009, which charges the state bank commissioner with educating state-chartered banks about health savings accounts (HSAs).

This is only one aspect of the plan; the legislature did not have time to consider any other parts before the session ended in April.

“Right now the health care system in Kansas is like a wobbly, three-legged stool–divided unevenly between growing government programs (23 percent), shrinking private health insurance coverage (65 percent), and the uninsured (10.9 percent),” Colyer explained in a statement on his Web site. “We strengthen the wobbly three-legged stool [in]to a table with four sturdy legs.”

Addressing Issues

KanCare is a four-part program that seeks to capitalize on the private insurance market, steer away from dependence on Medicaid, target government programs to those most in need, and increase the quality and availability of charity care. Each of KanCare’s parts is uniquely designed to work with the others to comprise the platform, with the goals of making health insurance more affordable, reforming Medicaid, and expanding consumer choice.

KanCare’s four parts are:

  • Combine tax credits with market competition to automatically reduce costs.
  • Shift Kansans from Medicaid to private insurance plans, with comparable affordability.
  • Allow consumers to set aside money for health-related expenses in savings accounts, and offer wellness incentives.
  • Improve charity care through free or low-cost clinics.

Using Market Competition

“KanCare’s approach to the private market is distinctive because it takes advantage of market competition,” said Christie Herrera, director of the Health and Human Services Task Force at the American Legislative Exchange Council. “Increasing competition between insurance companies will drive down costs. It would also increase quality, as consumers who are dissatisfied with their existing plan can ‘vote with their feet’ and purchase elsewhere.”

Health care plans and insurance companies are highly regulated by both the state and federal governments, which makes the process of buying and maintaining health care plans inflexible and at times difficult.

According to the Kaiser Family Foundation, 11 percent Kansans are uninsured (293,220 people). In addition, 10 percent of Kansas residents are on Medicaid (272,210). And while those numbers rank Kansas below the national averages of 16 percent uninsured and 13 percent on Medicaid, KanCare can help the state reduce those numbers even more, said Herrera.

Learning Quickly

Herrera said Kansas Medicaid spending represents a large share of the state’s budget. Currently the state spends $1.9 billion on Medicaid, and Medicaid rolls grow by 10 percent annually. KanCare, she said, is “the ‘non-plan’ plan” and a positive approach.

“The trend toward universal health care leaves many lawmakers wanting a slightly-less-big-government plan to bring to the table,” Herrera explained. “This plan is attractive to conservatives because it strives to lessen government involvement in the health care system.

“KanCare’s Medicaid reform components, including Medicaid health savings accounts, Medicaid ‘opt-out,’ and enhanced benefits for healthy living will help to make Kansas’s Medicaid program more personalized, while eliminating unnecessary care and saving taxpayer dollars,” Herrera added.

In creating KanCare, Colyer said he learned from others’ mistakes–finding out what worked and what didn’t elsewhere. Compared to other states’ plans, KanCare is much more streamlined, providing quality access to more citizens with less government control.

The plan could take several years to come to full fruition. Rather than vote on the plan as one large package, legislators will analyze and vote on pieces of legislation over the next several sessions.

“This sets the foundation for larger reforms next year,” Colyer said told The Capital-Journal newspaper for a March 6 story.

Erica Schatz ([email protected]) is a legislative assistant at the American Legislative Exchange Council’s Health and Human Services Task Force.

For more information …

“House Republican Health Care Plan,” by Jeff Colyer, http://www.jckansas.com/health-reform/house-republican-health-care-plan/