By Dave Ranney, Sarah Green and Mike Shields
KHI News Service
TOPEKA, July 9
Able-bodied adults in Kansas must be among the poorest of the poor to qualify for
Medicaid
the government”s health insurance program.
Only those living at or below 37 percent of the
federal poverty level
are eligible. That means gross earnings of no more than $72 a week, or about $3,800 a year for a single adult.
Kansas policymakers long ago made the decision to focus the program on children, pregnant women, the disabled and the elderly. Children in low-income families often qualify for services, but their parents don”t.
“It”s been an embarrassment for a number of years,” said Robert Harder, a former secretary of the Kansas Department of Social and Rehabilitation Services who now lobbies on behalf of the United Methodist Church of Kansas. “I”ve always thought being at 37 percent of poverty went against the true nature of most Kansans. We tend to be neighborly.”
“I think all states should have at least 100 percent of poverty. Kansas has 37 percent, which puts us in the bottom five states,” said Kansas Insurance Commissioner Sandy Praeger.
In a reversal of the long-standing policy of not insuring most adults, lawmakers have directed the
Kansas Health Policy Authority
to come up with a four-year plan for providing premium assistance or health insurance subsidies to cover the parents of children who are eligible for Medicaid. In Kansas, children on Medicaid are enrolled in
HealthWave
, the state”s insurance program for children in lower-income families.
In the new program, which is still very much on the drawing board and in a best-case scenario at least five years from full enactment, coverage would be limited to care-giving adults of Medicaid-eligible children. It could, for example, include grandparents or other close relatives or guardians, if their incomes are at or below 100 percent of the federal poverty level, which is $330 a week for a family of three or about $17,100 a year.
Why not me?
“I’ve never understood why they’ll insure my (two) kids but they won’t insure me,” said Brenda Edwards, an out-of-work nurse”s aide from Topeka who is scheduled to start a new job soon. “That’s never made sense to me. I mean, I’m between jobs right now, but when I’m working I can’t afford health insurance. I’ll be making $9.50 an hour.”
If
the new premium-assistance plan is funded by the 2008 Legislature, care-giving adults
such as Edwards who earn 50 percent or less of the federal poverty level would be eligible for coverage after Jan. 1, 2009. A year later, coverage would be extended to include those earning 75 percent or less of poverty. After another year, those under 100 percent of poverty would be eligible.
If successful, according to health policy authority estimates, the program would enroll 24,000 adults, costing $77 million annually, of which the state”s portion would be $31 million.
Taking shape
Legislators and those at the health policy authority who are crafting the premium assistance plan expect it will be two-pronged:
*
For adults who cannot afford the insurance offered by their employers, the state would pay or help pay their premiums. That is the so-called “buy-in” portion of the plan.
*
But for the estimated 90 to 95 percent of those eligible who don”t have access to insurance because their employers don”t offer it or because they”re unemployed, the state would pay a private company to insure them with a so-called “state-procured” plan.
Plans call for the health policy authority to solicit by late September formal interest from insurance companies that might bid on providing the state-procured plan. Successful bidders must offer a benefit package at least equal to the state employees” health plan. As with the traditional Medicaid program, the federal government
is expected to pay 60 percent of the cost of the premium assistance program, the state would cover the rest.
The plan
the most significant health reform measure passed by the 2007 Legislature
is the result of a political compromise between Democratic Gov. Kathleen Sebelius and others who favor an expansion of Medicaid and Republican legislative leaders who advocate private-sector solutions over the expansion of government programs.
What benefit plans might emerge from the negotiations remains unclear or unknown.
“I can”t comment on which benefits will ultimately end up in the plans,” said Kansas Medicaid Director Andy Allison, also deputy director at the health policy authority. “That”s something we”re going to have to wait and see.”
How many
if any
insurance companies will bid on offering coverage plans also is uncertain. Spokeswomen for the contractors that currently administer managed care plans for the HealthWave program
Children”s Mercy Family Health Partners and UniCare Health Plan of Kansas
each declined comment on their company”s interest in bidding.
“The great unknown in all this is how much the state is willing to pay,” said Graham Bailey, vice president of corporate communications and public relations at Blue Cross Blue Shield of Kansas.
“The thing to keep in mind here is that neither Blue Cross nor any other company is going to knowingly insure somebody at a loss because that doesn”t line up with the mission of those who have to make up for that loss in their premiums,” he said. “We would not be good stewards of our beneficiaries” money if we went out and did that.”
Bailey said the company is eager to participate if there “are solutions out there that can be obtained through creativity and private-public partnerships and everybody being able to sacrifice for the betterment of everybody else.”
But “on the other hand,” he said. “We went out a couple years ago and created ValueBlue, a comprehensive health insurance product at
a really attractive rate and we don”t have very many people willing to pay for it we”ve got around 300 people in the state of Kansas covered. If you”d told me that I could go out and create a network and offer a BCBS policy for half the rate and only 300 people would be on it, I”d have been amazed. We have some stipulations
like not being covered for a year, so maybe that”s holding down some of the numbers
but at some point you have to ask yourself: Will some of these uninsured people purchase insurance at any price?”
What next?
Currently the health policy authority is working to hire a project manager to help pull together the premium-assistance program. Meanwhile, Allison and others from the agency have been meeting informally with insurance company representatives.
“Through individual meetings and collective meetings with insurers, we have laid out the vision for premium assistance and some of the technical questions about that program,” Allison said. “We have received those responses and will continue to look at that process for the better part of the summer. They have raised a number of operational questions and we”re working through those questions. I really could not comment on their specific interest on bidding. We will know that when it happens. I do know that there are a number of insurers listening and participating in this conversation right now.”
Key legislators also are watching with interest as the plan takes shape in tandem with the health policy authority”s development of a
more sweeping health-care reform package to be considered by the 2008 Legislature. That broader plan is meant to take Kansas closer to “universal coverage.” In recent discussions, health policy authority board members have shown willingness to consider subsidized health insurance for the working poor, those earning up to 250 percent of federal poverty guidelines.
Some lawmakers fear the premium assistance program will turn out to be a thinly disguised expansion of Medicaid, lacking components they consider essential if it is to dovetail with a broader reform.
“I”m not sure it”s going where the Legislature thought it was going,” said House Speaker Melvin Neufeld of the health policy authority”s planning for premium assistance. “It”s a little disconcerting to think we might be following a model proven to fail.
“You have to understand that you can”t have a pure Medicaid plan. You need the private-sector model,” Neufeld said. “You have to set up a plan that will (also) work for those earning more (than 100 percent of poverty.) If you exclude the options, you”ve got a non-starter for expansion.”
Allison said the agency”s aim isn”t a mere expansion of government insurance
“I”m not sure why we would ever simply assume that we”d want to expand a public program rather than looking at the private market or the alternatives or the advantages the private market has to offer,” Allison said. “We didn”t begin with the presumption that the public program would be best.”
“Fair question”
But will the dollars in the Medicaid pot be enough to buy adequate coverage on the private market for the state”s poorest people? Private insurers typically reimburse health care providers at higher rates than the government does its Medicaid providers.
What reimbursement rates would exist under a government-paid, but privately managed plan is a core question left to be answered.
“It”s a fair question,” said Marcia Nielsen, executive director of the health policy authority. The answer to it “is one we strongly think the market will help to drive. For example, when we procure plans through the state and insurance companies are making a decision on how they want to bid for this businessnetwork adequacy is going to be a question that they”re going to have to answer. Do they think they can build a network by paying providers what Medicaid pays? Or, do they think they”ll have a better opportunity to build a network by paying more closely to what the private sector does? I don”t have the answer. But I think it”s one of opportunities that having a private-sector, market-driven initiative allows for.”
-Dave Ranney, Sarah Green and Mike Shields are staff writers for KHI News Service, which specializes in coverage of health issues facing Kansans. They can be reached at 785-233-5443.