State won’t estimate cost of greater-than-expected Medicaid expansion for ‘a few additional months’ – after Nov. election

By Al Cross
Kentucky Health News

The Republican-controlled state Senate’s budget committee chair wants to know how much Democratic Gov. Steve Beshear’s expansion of the Medicaid program will cost, since enrollment in the federal-state program has exceeded the administration’s expectations.

Medicaid Commissioner Lawrence Kissner told Sen. Bob Leeper of Paducah in a letter Sept. 8 that the administration won’t be able to update the estimates “until a few additional months have passed and more data [are] collected” and “after the newly insured population has stabilized.”

That pushes the date for new estimates past the Nov. 4 election, in which Republicans are making issues of the expansion’s cost and the federal health-reform law that allowed it. U.S. Sen. Mitch McConnell has mentioned it in attacking “Obamacare,” and Republicans trying to take over the state House have done likewise.

When Beshear announced in May 2013 that he would expand Medicaid eligibility to people with incomes up to 138 percent of the federal poverty level, using entirely federal money for the first three calendar years, he said it would cost the state $30 million in the 2016-17 fiscal year and $70 million in the 2017-18 fiscal year.

Those figures were based on an estimate by the Price Waterhouse Coopers accounting firm that 308,000 Kentuckians would become eligible for Medicaid but only 188,000 would enroll by 2017, based on calculations by the Congressional Budget Office. But so far, about 320,000 people have enrolled, more than double the 148,000 that the firm estimated would sign up by June 30.

At last report, about 521,000 people had obtained coverage through the state’s Kynect health-insurance exchange. About 80,000 of them bought private insurance, and 120,000 qualified for what state officials call “old Medicaid” for a variety of reasons: they were children, blind, disabled or had income less than 69 percent of the federal poverty level, the old limit for the program.

The federal government pays about 71 percent of “old Medicaid” costs and, until the end of 2016, 100 percent of the newly eligibles’ coverage. In 2017, it will pay 95 percent of the new costs, falling to the reform law’s floor of 90 percent in 2020.

Kissner told Leeper that the administration needed more experience with the new enrollees, and better estimates of projected employment in 2017-18, other “key economic indicators” and how many Kentucky households will have incomes above or below 138 percent of the federal poverty level.

Leeper could not be reached for comment. For a copy of Kissner’s letter and related materials, click here.

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