Detour on way to remaking Ky. Medicaid

The problem is not so much that too many Kentuckians are on Medicaid as too many Kentuckians are poor and can’t afford medical care without Medicaid.

Cutting back health care does not ease poverty; it worsens it. Kentuckians suffering from untreated diseases or injuries will not contribute more to the economy; they will become sicker and more dependent.

That reality should guide Gov. Matt Bevin’s promised transformation of Medicaid, the federal-state program that has grown to cover 1.3 million Kentuckians.

Kentucky faces enormous health challenges, including the nation’s highest cancer death rate, the fastest rise in Hepatitis C, worst ranking for preventable hospitalizations and fifth-lowest per capita income. More grim statistics upon request.

Considering the real problems, it’s a pity the new governor’s people must expend so much effort on a non-problem. Carrying out Bevin’s vow to dismantle Kynect, the state’s acclaimed health insurance exchange, will be no small task, as was made clear in a letter from Andrew M. Slavitt, acting administrator of the Centers for Medicare & Medicaid Services.

At a legislative hearing last week, Health and Family Services Secretary Vickie Yates Brown Glisson and Medicaid Commissioner Stephen Miller labored mightily to defend the indefensible. Regrettably, their mischaracterizations undermined their credibility. Contrary to what lawmakers heard:

▪  Kynect is sustainable. A 1 percent fee on state-regulated health-insurance policies pays its operating costs. The fee, which has been in effect for 15 years and once supported a health insurance high-risk pool, could be be raised if the $28 million a year it now generates falls short of need. Even at a higher rate, Kentuckians would get great value in the form of access to affordable insurance even if they become sick or hurt or lose their jobs. Kentuckians forced onto the national exchange by dismantling Kynect would pay a 3.5 percent fee.

▪ The $330 million that Glisson said the federal government invested in Kynect paid off handsomely: Kentuckians without health insurance have dropped from 20.4 percent to 7.5 percent, the nation’s biggest gain. The investment by taxpayers is wasted only if Kynect is dismantled.

▪ Kynect is more than “just a web site.” It’s a health insurance marketplace that includes a web site and a statewide network of agents and Kynectors who help Kentuckians navigate the process and figure out whether they qualify for tax credits to pay for health insurance or for Medicaid, which is free. Since Kynect’s advent, competition has blossomed in the small-group and individual health-insurance market. Insurance Commissioner Brian Maynard cited “strong” competition as one of the reasons he approved the Humana-Aetna merger without a public hearing.

▪  Kentucky had 13,000 more jobs in health care and social assistance at the end of 2015 than at the beginning of 2014 when Kynect went online and the Medicaid expansion, which has brought $3 billion to Kentucky medical providers, began.

Curbing the huge bite that health-care costs take from public and private budgets should be an urgent priority. But when the state puts up $3.7 billion to secure $21.6 billion in health care for Kentuckians through federal support for Medicaid, that’s also a big opportunity.

The health-care community is responding to the Affordable Care Act’s incentives by improving quality, working to prevent hospital re-admissions and to keep people healthy. The University of Kentucky said last week that it is joining with Western Kentucky and Morehead State universities to train more doctors.

Bevin has talked only of emulating Indiana by bringing cost sharing to Medicaid. But Medicaid co-pays are not transformative, they’re not even new. The Fletcher administration got a waiver to charge Medicaid co-pays; the state’s Medicaid managed-care organizations already have the option of requiring co-pays. But many providers would rather absorb the cost than bear the expense of trying to collect amounts that are insignificant to all but those who would have to pay them.

Capitalizing on Medicaid to drastically improve Kentuckians’ health would be transformational. But expending so much energy and credibility on dismantling a successful health insurance exchange is a needless distraction from the quest for a healthier Kentucky.

This story was originally published February 20, 2016 at 3:26 PM with the headline "Detour on way to remaking Ky. Medicaid."