Op-ed: Gov. Bevin, don't mess with Medicaid

Posted at 5:00 AM, Jan 25, 2016
and last updated 2016-01-25 07:37:24-05

Col Owens is a recently retired attorney from the Legal Aid Society of Southwest Ohio and chair of the Kenton County Democratic Party. He lives in Fort Mitchell. 

Kentucky Gov. Steve Beshear achieved historic breakthroughs for the state’s health and economy by adopting the Medicaid expansion. In doing so, he brought health care to more than 400,000 uninsured Kentuckians, reducing Kentucky’s uninsured rate more than any other state in the nation.

Col Owens

Newly-elected Gov. Matt Bevin promised during his campaign that he would end Kentucky’s Medicaid expansion, arguing the state could not afford it. After taking office he has changed his approach. Presumably, he came to terms with these facts, as well as with the obvious political difficulty in taking health care away from an average of 4,000 constituents for each House member in the legislature. He now proposes not to end the program, but to “reform” it to operate like Indiana’s, which under a federal waiver, charges premiums to enrollees.

Medicaid Expansion is a Net Gain

But the Medicaid expansion is not a net loss to the state, but a substantial net gain. A 2015 study by Deloitte Consulting and the University of Louisville commissioned by the state showed that added taxes, revenue and cost savings would generate a net budget gain of almost $820 million for state and local governments over the next six years. 

It is a huge net gain for providers. According to the study, hospital uncompensated care visits fell 55 percent over the prior year. Hospitals and doctors received $1.16 billion in new payments. Primary care revenues increased 52 percent and hospital revenues increased 27 percent. Many new enrollees used their coverage to obtain preventive care for the first time.

A Help for Low-Wage Workers

People with jobs made up a majority of the newly-eligible adults -- 73,800 out of 137,220, found a recent study of Census data by the Kentucky Center for Economic Policy. These Kentuckians work at low-wage jobs, at restaurants, construction sites, temp agencies and retail stores that do not provide health care. The share of Kentucky workers receiving health insurance through their employers has declined over time, from 70 percent in 1980-82, to 53.7 percent in 2011-13.

Expanded Medicaid coverage allows workers and their families to obtain greater economic stability and better health status. Everybody benefits.

The plan currently put forward by Gov. Bevin, modeled on Indiana’s, would charge enrollees a premium of about 2 percent of their income. While this may not sound like much, ranging from $1 to $27 per month, experience shows that low-income families already struggle to pay their basic bills, like housing, food, utilities and transportation. Many cannot afford this additional burden.

Bevin's Plan is a Step Backward

A 2015 Families USA analysis shows that imposing cost-sharing like premiums results in many eligible enrollees either dropping coverage or never obtaining it. When consumers fail to obtain or maintain coverage, their health care consumption reverts to pre-expansion patterns, using emergency rooms for primary care and failing to seek appropriate preventive care until conditions become acute and much more expensive to treat. It is a penny wise but pound foolish approach to providing care.

Costs, which have started to come down because of the expansion, will escalate once again because of disruptions in continuity of care.

Administrative costs will also increase under Bevin's plan. Medicaid, despite its size, is a reasonably simple health care financing plan. Private providers perform a service, bill Medicaid, and get paid. Introducing a premium requiring consumers to make a monthly payment, however modest, is a guarantee for confusion, instability, and loss. Low-income people, especially workers, face numerous unstable circumstances in their lives that affect their ability to pay even small amounts on a month-to -month basis.

If Gov. Bevin would undertake an objective cost-benefit analysis of the Medicaid expansion, he would conclude that it is good for Kentucky and for Kentuckians. He should do so, allow the expansion to remain in place, and allow our state to continue to reap the benefits in our improved health status and our stronger economy.