Kansas will save under both plans


January 26, 2010 - 12:00 AM

If a federal health care initiative does come to pass, the Kansas Health Policy Authority will be ready. One of the assignments for the Authority is to dovetail state health care functions with the new federal programs, whatever they may be.
Under either the House or Senate version, Kansas could save money while serving more people better.
Medicaid is the main health care program managed by the states. Medicaid is a jointly funded federal mandate. Under current law, the states pay about 40 percent and the feds, 60 percent. The federal share was increased to 69 percent temporarily as part of the stimulus program.
Under both the House and Senate programs Medicaid would be greatly expanded to bring in low-income families and individuals who make up a large percentage of those without health insurance. Both would cover childless adults, a category not now covered by Kansas Medicaid. The additional cost will be covered by the federal government for the first few years. The states’ share would then drop to about 8 percent permanently.
Under the House bill, the State Children’s Health Insurance Program (SCHIP) would be repealed and care would become a federal responsibility.
Kansas would see its Medicaid costs drop sharply when all of these changes took place. Under the laws as passed,  that would not occur un-til 2013 or 2014. Changes can be expected as the final bill is moderated to overcome objections.
One of the savings that is very difficult to calculate will be the reduction in hospital costs and charges due to the reduction in non-covered costs that will occur when the number of uninsured is reduced by 30 million or more across the nation.
Under changes proposed in the children’s program, for example, all children in low-income families would be covered by Medicaid or through a federally subsidized insurance policy issued by a state insurance exchange. The coverage would be total, prescription drugs included along with physician’s care and hospital charges. One of the consequences would be that hospitals and other providers would no longer be required to raise other charges and fees to make up for uncompensated care.
At present, that cost-shift results in higher patient charges which, in turn, increase demands on health insurance, pushing premiums higher.
Because of the increased federal share of Medicaid costs under both programs, Kansas would save anywhere from $25 million-to-$50 million a year, the KHPA estimates.
The number of additional Kansas residents who would be brought under health care coverage, public or private, is estimated at 140,000.
Additional savings would come to the states because both the House and Senate bills require pharmaceutical manufacturers to reduce the cost of drugs sold to state providers. KHPA estimates those cost reductions will amount to between $6 million and $8 million a year; savings that would begin in 2010, or when legislation passes.

WHILE DRUG savings would start flowing as soon as the ink dries on a reform bill, most of the benefits would not begin until 2013 or 2014 and some will take even longer to phase in.
Perhaps the long waiting period explains some of the frustration the public feels and expressed Tuesday in the Massachusetts vote. It will take four years or more to provide 30 million more Americans health care because the challenge is so immense. Expanding Medicaid in Kansas by 140,000 would crowd clinic waiting rooms to overflowing and warn communities like Iola to review plans for a new hospital very carefully — and the Medicaid expansion provides for less than half the uninsured in the state.
Planning for health care facilities and the providers required to staff them should be done with the expectation that the whole population will have access to them, if not this year, then well before the decade is out.
It would be a mistake to conclude from today’s poisonous political scene that the American people were just fooling when they elected a president and a Congress that pledged to expand health care coverage and bring down health care costs before they consumed even more than the 17 percent of the country’s domestic economy that they do today.
Iola and every other Kansas community should take a leaf from the KHPA’s book and get ready to do its part to bring every Kansan under one health care umbrella or another.

— Emerson Lynn, jr.

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