Kentucky ranks 4th in study of which states benefit most under health law

bestep@herald-leader.comDecember 31, 2013 

Kentucky's health exchange call center opened last August to answer questions leading up to the start of enrollment in Kynect, Kentucky's health insurance option under the nationwide Affordable Care Act.

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Kentucky will benefit more than most states under the federal health-care law, receiving $3 to cover more people under Medicaid for every additional $1 of taxes residents pay, according to estimates on a personal-finance website.

Kentucky ranked fourth in the nation in a study by WalletHub.com of which states benefit most under the Patient Protection and Affordable Care Act, commonly called Obamacare.

One key reason is that Kentucky embraced an expansion of Medicaid to cover more poor people, a change that will be funded mostly by the federal government for several years.

In contrast, more than 20 states decided not to expand Medicaid under the law. That means their residents will still pay federal taxes that go toward supporting the law, but none of the money will come back to the states, according to the study.

"Taxpayers across the country are on the hook for Medicaid expansion costs no matter what, as federal income taxes are used to fund the program," Odysseas Papadimitriou, chief officer of WalletHub, said in a statement. "The only question is whether or not they get anything in return."

The Affordable Care Act has been one of the most controversial laws in the nation's history. Supporters laud provisions that provide health-insurance coverage for more people and bar insurance companies from refusing to cover people with pre-existing conditions, while opponents savage the law as government run amok, resulting in higher premiums and coverage disruptions for many people.

WalletHub, an Internet-based financial services firm, said its study was designed to be an unbiased assessment of how states would fare under the act, though, arguably, the factors chosen for analysis colored the results.

The study used 11 factors to assess the effect of the law, such as the cost-benefit ratio of expanding Medicaid, changes in average premium prices, the number of people with pre-existing health conditions and reductions in free care provided by hospitals.

Kentucky ranked high in several categories.

For instance, the analysis found that Kentucky would see per-capita savings of $235 on health care that hospitals receive no money for providing. That was tops in the nation.

Uncompensated care is expected to decline with the expansion of Medicaid under the health law because it will provide coverage to people who couldn't afford insurance or couldn't pay for emergency-room visits, the study said.

In another measure, Kentucky ranked second, behind neighboring West Virginia, in the percentage of residents younger than 65 with pre-existing health conditions, the study said. That was used as a measure of how states would benefit because those people now will be eligible for insurance coverage under the law.

Kentucky ranked poorly in the number of small businesses eligible for subsidies to provide insurance for employees. The state ranked 48th of 51; the analysis included the District of Columbia.

The study ranked Kentucky 35th in the average increase in insurance premium, which it calculated at 46.9 percent. Predicted average premium changes ranged from a 40.4 percent decline in New York to an increase of 178.75 percent in Nevada.

The study examined historical premium rates for men and women ages 27, 40 and 64, and compared them to the average premiums of plans available on state and federal health-care exchanges.

Other studies have said it is very difficult to figure out how much premiums will go up for any given individual.

For instance, the Kaiser Family Foundation said in September that it could not accurately predict how the law would change premiums for individual insurance plans because so many variables were involved.

In addition, many consumers qualify for subsidies and tax breaks that significantly lower the cost of insurance.

"I just don't think the data exists publicly to do the calculations without having to make some very speculative assumptions," Larry Levitt, a senior vice president at the Kaiser Family Foundation, said at the time during a conference call with reporters.

In a measure of how much people will save on out-of-pocket medical expenses under the law, which caps such costs, Kentucky fared better. The state ranked 16th, at $1,743 saved per person, the WalletHub study estimated.

In a measure of access to care, Kentucky was 32nd out of 51. That ranking took into account the number of licensed doctors per capita, the analysis said.

Kentucky had a shortage of 3,700 doctors even before the expected influx of additional people with health coverage under the law, Republican U.S. Sen. Mitch McConnell said in a commentary provided by his office.

But overall the study concluded Kentucky would benefit more from the federal health-care overhaul than all states except New York, West Virginia and Vermont.

The state also ranked fourth when measuring how much federal funding it gets under the health law for each $1 of tax burden on residents.

On the other side of that scale, states that did not opt to expand Medicaid ranked poorly. Mississippi, for instance, will leave $8.03 on the table for each dollar its residents are spending to finance the Medicaid expansion in other states, the study said.

In a news release, WalletHub referred to the Medi caid subsidy states can get as "free federal funding."

That description rankles opponents of the law.

"The big spenders in Frankfort and Washington are spinning this as 'free' health care. But there's no such thing as a 'free' government program," McConnell wrote this month. "One hundred percent of these costs will be picked up by the taxpayer — and that means you."

Kentucky residents are seeing higher premiums and fewer provider choices under the law, and 280,000 residents lost their existing health plans, said McConnell, a harsh critic of the law.

Gov. Steve Beshear, a Democrat, is on the other side of the deep divide over the law. He pushed the expansion in Medicaid and has been a high-profile advocate of the federal law.

Beshear's office said 640,000 uninsured state residents will be eligible for health coverage through the state's insurance exchange, some through Medicaid and others through private plans. And Beshear said studies he commissioned concluded the Medicaid expansion would result in a positive economic impact of $15.6 billion and create 17,000 jobs.

The governor's office announced Monday that more than 116,000 state residents had enrolled in health coverage through the state's exchange.

"There is a huge demand for affordable insurance here," Beshear wrote. "The bottom line is that, despite some challenges implementing it on the federal level, the core principles of the Affordable Care Act are strong, and they will make Kentucky and America a better place over the next generation."

Bill Estep: (606) 678-4655. Twitter: @billestep1.

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