Kansas governor unveils revenue neutral Medicaid expansion plan with work requirement

HOLTON — Gov. Laura Kelly unveiled Thursday her proposal for a Medicaid expansion package that includes a work requirement, revenue streams to offset the state’s cost, abortion restrictions, and other provisions to address concerns raised by opponents.

By expanding Medicaid, an estimated 150,000 Kansans with low incomes would gain access to medical care. About $700 million in annual federal funding would flow into the state, offering a lifeline to 59 rural hospitals at risk of closing.

The Democratic governor has toured the state since September to rally support for Medicaid expansion. GOP leaders in the Legislature have stonewalled Medicaid expansion for years, but polling shows 80% of Kansans, including a majority of Republicans, support the idea. She announced her proposal at Holton Community Hospital, where she was joined by lawmakers, medical professionals, faith leaders and law enforcement.

“By expanding Medicaid with this bill, we will inject millions of dollars into rural hospitals just like this one in Holton,” Kelly said. “Since 2014, eight of our rural hospitals have closed — including one just two months ago — and right now, 59 of the remaining 102 rural hospitals across Kansas are in danger of closing. Some of my colleagues in Topeka are ready to give up on those hospitals, but I am not.”

Kelly said she will introduce a bill in the upcoming legislative session that is revenue neutral. The state’s cost of expanded services would be offset by federal funding, drug rebates and fees assessed to hospitals that provide Medicaid services.

In addition to cost concerns, the legislation addresses other objections that have surfaced in Medicaid expansion debates. The program would be discontinued if the federal government ever reduces funding below the current level of 90% of costs. Abortions are only covered in cases of rape, incest, or to save a woman’s life.

Under the work requirement, people would have to prove they are employed in order to sign up for services and renew them each year. The state health secretary would develop exceptions to allow enrollment by full-time students, caretakers, veterans and those with medical conditions.

“We have taken every effort to put together a proposal that addresses every concern Republican leadership has brought up, to meet in the middle of the road,” Kelly said. “I truly hope that the legislative leadership will not stand in the way of doing what’s right for Kansas and what everyday Kansans overwhelmingly say they want — which is for Medicaid to be expanded across the state.

“At this point, every legislator standing in the way of Medicaid expansion is going against a commonsense, fiscally responsible proposal that benefits their constituents. This is the moment to get this done.”

Kelly’s proposal would allow those who earn between 100-138% of the federal poverty level to remain on private insurance and receive assistance from the state, or switch to Medicaid. This would apply to a family of four earning between $30,000-$41,400 or an individual earning between $14,580-$20,120.

A new provision in her plan, added at the request of law enforcement, would provide Medicaid coverage for those who are incarcerated in county jails.

“For too long, county jails have been shouldering the burden of providing medical care to inmates at their own expense,” Kelly said. “They have faced the catch-22 that, while providing that coverage is painfully expensive, it also contributes significantly to reducing recidivism.”

The legislation also establishes a rural health advisory committee and requires the Kansas Department of Health and Environment to provide annual financial reports.

The program would be fully implemented by Jan. 1, 2025.

The Affordable Care Act, also known as Obamacare, allows states to expand eligibility to those who earn 138% of the federal poverty level. Otherwise, residents are caught in a coverage gap where they earn too much to qualify for Medicaid but too little to purchase health insurance. Only about half of the state’s residents get health insurance through their employer, and a single mother working a minimum wage job currently earns too much to qualify for government assistance.

The governor’s announcement follows a weeklong series by Kansas Reflector that examines the impact of the state’s failure to expand Medicaid. Stories in that series looked at the lives of the uninsured, struggling rural hospitals and the impact on county jails. An opinion column analyzed the number of people whose deaths can be blamed on church and state officials who blocked Medicaid expansion.

“It makes no sense to me that, while 40 other states have expanded Medicaid, we have not,” said Rep. Dave Younger, a Ulysses Republican. “Our tax dollars are going to every one of our neighboring states, while health care costs rise and hospitals close here in Kansas. By including a work requirement and making sure Kansas taxpayers won’t foot the bill for Medicaid expansion, this proposal addresses many of the concerns my Republican colleagues have had. Now, those in leadership positions need to let this topic be debated and voted on.”

Senate President Ty Masterson and House Speaker Dan Hawkins remain opposed Medicaid expansion. The two issued a statement in September in which they described the governor’s advocacy for Medicaid expansion as a “welfare express tour.” They have repeatedly made inaccurate claims about the cost of Medicaid expansion and the Kansans who would gain access to medical care.

Sen. John Doll, a Garden City Republican who appeared with Kelly in Holton, said he found the opposition by GOP leadership to be disturbing. He said the governor’s proposal addresses a lot of the concerns he has heard from GOP colleagues.

“I urge my Republican colleagues to join me in supporting this bill to ensure our rural hospitals stay open, to cut health care costs and lower taxes, and to get affordable health care to more working Kansans,” Doll said.